continue to move higher. >> somebody is lobbying to try to get back on "overtime", i think. steve weiss? >> you don't need me >> just to analyze look, the stock is cheap based on on what they're going to earn going forward. i think traffic is going to pick up, and december cession, if i'm wrong, own delta >> thanks, guys. see you in ot. the exchange is now. thank you very much. hi, everybody. happy monday and welcome to "the exchange". it's getting ugly for bonds as we close out the quarter this week the two-year treasury option went horribly. since march 1st the yield on the ten-year is up about eighty basis points the 530 is inverted for the first time since 2006. who do bonds know and not know and what do investors do >> president biden is speaking soon about the budget plan including a minimum 20% tax on households over $100 million can it happen?

and would it work? and if workers have so much leverage, why is unionizing seeing a big resurgence. all that and more coming up this hour let's start with stocks. dom is way over there with the numbers. >> interesting i am way over here, and the numbers are interesting only because we are seeing a mixed market, and actually to the downside for some parts. despite the fact that we see treasury yields dropping we'll get to more on that. however, if you look at the major indexes right now, the indices, the dow industrials down 185 points. 34,6 7 at the lows of the day we were down 309 points. at the highs down about 28 tilting toward the middle end of the trading range. the s&p 500, 4534. and the nasdaq composite 14,180. the outperformer just about 10 points to the up side relatively flat on the day if you look at the crypto currency side of things, just over the course of the last month, month and a half or so, would you believe it if i told you that bitcoin prices are up

roughly 38% since the day before russia's invasion of ukraine that's the right hand side of the screen you're seeing here. the reason why it's important, bitcoin prices are up 5% today we are now above a key technical level that some traders watch, the 200-day long-term average price of that bitcoin. that's around 45,7 00. keep an eye on bitcoin prices. ether, all the smaller coins and tokens catching a big wave to the up side. and then check out tesla, because we are seeing positivity there. we took a break from a multi-day winning streak on friday we're about 7.5 points to the up side a plethora of headlines. first, elon musks tweets he thinks he has covid again. then they're going to shut down production at a shanghai facility because of the lockdowns there, and then tesla says in a regulatory filing it's seeking an authorization from shareholders at the annual meeting to expand the number of

authorized shares and what paves the way for what could be another stock split. that's giving the positivity there. watch tesla. it was just 2020 they did the last one we'll see if the positivity continues. >> it is firmly back in the trillion dollar stock club d dom, thank you let's look at what's been happening with bonds the losses are piling up fast as yields continue to surge and investors bail out of the space. the ten-year yield has jumped more than 79 basis points just this month take a look at the moves since the start of the year. we closed down 2021 around 1.5%. today we hit 2.55% earlier on. and to dom's point, today we're down ten basis points. this has been an incredible acceleration since the fed's meeting mid march about here we saw it going into the meeting. it's picked up steam coming out of it as well. it's not just the ten-year you can see similar moves in

two-year government bonds on government bonds overall are now on pace for the first year since 1949 2.3% on the two-year is it a historic sea change in bonds or is it a bump in the road joining me now is president of srikumar global strat egstrategs >> good to be with you i think the first point i would make is this is not a bump in the road there is much more increase in the ten-year yield coming ahead. i moved up my expectation from the 2 % mark i was keeping to 27 5. we are still below the level once we keep 2.75, i may have to up the target further. in terms of what the investors should do. there are few avenues open

i think because of the fact that we have high inflation combined with moving toward a recession, which is what the inversion that you talked about on the five to 30 and then what is coming soon, the two to ten, because the two to ten yield curve on friday was 22 basis points positive and today it is 13 it is going toward inversion in a hurry. and keep in mind that at the beginning of this year, we were at 80 basis points on the two to ten, so we are moving fast forward inversion. if you have a recession and high inflation, the investors cannot seek refuge in bonds because the bond yields are rising they cannot seek refuge in equities because equity prices get hit by earnings being hit. so they have to find other ways. they have to look at commodities. they have to look perhaps at

real estate which is globally diversified. they have to do more searching >> in my mind that dieferentuats you from others. you are more bearish about equities why don't you think equities are a decent hedge the average of the s&p is only about 4.5% since january 1st that's pretty good so far. why duke that's all the sudden going to take a turn for the worst? >> that's a great question look back. i think the great recession tells you what happened. there was an inversion of the two to ten-yield curve toward the end of 2006. that led me to say in october of 200 7 we are headed to a recession. the s&p hit a high they continued to rise suggesting a strong economy. and then came the collapse in the final quarter of 2008. so do not be misled by high

equity prices. they do not give you a good signal as far as the recession is concerned when the recession hit, it's only then that the equities react. >> why are you convinced we're going to have a recession when the shorter curves are steepening they're at risk highs and there are other signs that the economy is stronger than what we've seen in the past. everything from commodities prices to the labor market you know, other parts that tell us it's not necessarily the same kind of signals that we saw just prior to the last major recession. >> the reason is if you look at two or three-month yield and compare it with the longer time like a five-year, that is not a good comparison. the short end, nobody seeks refuge and puts 30% of their portfolio in overnight treasury bills. you have to ask the question, where can equity holders go to

or even a 5 to 30 is a reasonable alternative, if you can put away your money for two or five years, but you're not going to change your allocation every three months in treasury bills. that's why i think it is erroneous to bring the short end into this comparison it gives you absolutely no indication about the outlook for the economy. >> final question. what would you do with dividend paying stocks? some of the materials names, other areas where people could tactically think about exposure, even energy, which i know you like the commodities aspect of this what would you do with those parts of the market? >> i like the dividend paying companies a lot more than growth equities i think if you are guaranteed the dividends are likely to continue over the period of time it could be a good safe haven. you could stay there until the storm passes but do not go into a big way to

growth equities. they are going to be hit, especially technology stocks where i think you're going to be discounting with a far higher interest rate than you have been doing with the last two or three years. it's a major difference. final point, do not take into account the fact that chairman powell said that 1994 rate increase didn't result in a recession. the situation is very different. in february of 1994, the cpi inflation rate year on year was 2 .5%. february of this year, it is 7.9% the federal reserve balance sheet was very small now it is over 10 to 12 times as large as 1994 with no corresponding growth to account for it so the michgs is very different. the balance sheet has to be cut back the inflation rate has to be

brought down which is why the fed is boxed in. >> it's worth highlighting your perspective as someone who is sort of in the low rate camp for so long, and now as you've said, this is a very different environment, and you see yoelds going a lot higher great to have you on today thank you. >> sri-kumar >> i mentioned the two of year auction we had this morning. the five-year was top of the% hour rick santelli joins us with the results. >> yes we basically go from a d to a b plus b plus is the grade for the 51 billion five-year notes jeust auctioned off. the yield 2 .543%, below the 2.5 5. lower yield, higher price. if you want to sell something, it' it's better to sell it at a higher price all the other metrics were close or shiegtly above average except for one.

indirect bidders were on the light side i think what's fascinating with the auctions, of course, is that the investors ultimately are having a very difficult time to try to interact with the shorter maturities i fully expect that the seven-year we'll have tomorrow may go better. the longer maturity and yield curves are making life confusing. but let's not lose sight of several issues no matter what recession signal you're look agent, there seems to be a lot of pent up demand in the service sector as some of the numbers change post covid, at least in the u.s., and there could be a head of steam that could really put many of the weak strategies out of the reality of possibility, maybe 2023 is when some of these signals for recession ought to be taken more seriously. kelly, back to you >> rick, thank you rick santelli. let's get another perspective on stocks, a mixed bag. we're coming off two straight

weeks of gains for all of the major averages the dow right now down about 197 points my next guest warns we're not going to see the returns we enjoyed in stocks in the past decade but we have to be in the market and where he recommends exposure may surprise you. for more let's welcome in mark tenner, the founder and strategic partner of strategic wealth partners. you're going to say long growth stocks on top of everything. for investors conditioned by the plooefs discussion, make your case >> yes look, i mean the value versus growth trade, that's gotten all the headlines since i think it was right around thanksgiving. and from my perspective, i think it's too late to be chasing value. we are stock investors i don't think there's a lot of value to be had in bonds, unfortunately, when you look at investing over a longer time horizon. so i'm kind of watching that value versus growth trade. as it's starting to reverse course, which it has started

doing, only two weeks ago so far. i want to begin picking off growth names now, i want to focus on durable growth companies durable growers. not the speculative corner of the market like the arc innovation etf my goal for the next two years as the fed is undergoing this massive hiking course, is just to keep the ball in the fairway. don't get cute don't try to swing out of your shoes. take a nice, easy swing. leave those stocks that are trading at ten, 20 times sales in the bag stick with durable growers defensive growth one of the names i like is medtronic. consistent growth. great company. >> so and let me again preface this by seeing we've seen growth outperform in the past couple weeks. you mentioned medtronic, but is this the good kind of growth outperformance or the bad kind the bad kind was the pandemic, meaning growth is scarce elsewhere, so stick with what's working. the good kind is no, we have

growth everywhere so high valuation tech can collapse. what are we in with this market right now? >> you raise an excellent point. because all of the sudden it -- you remember the yolo trade from i don't know if it was last year or the year before, game stop, amc, those stocks have been substantially outperforming the market over the course of the last two weeks so things are pretty crazy the market's behaving irrationally the million dollar question that i'm asking myself is the next 10% move higher or lower so what do we see first? 5,000 on the s&p or 4,000? while i'm a long-term bull and patiently waiting to employ some of our cash in good durable growers, i got to tell you, i think we approach 4,000 before we actually resume the bull market >> that's helpful context. maybe it's not such a different story than what we heard then. let's close with medtronic and

why this stock of all stocks jumps out as the kind of defensive growth name people should look at right now >> it's the kind of company where you can still see high single low double digit earnings growth and obviously look, we're living in a world where people are living longer. it's a great thing and when you look at the demographics of our society, we have to deal with an aging population and medtronic, they are just a med-tech giant one of the biggest ones out there. lots of focus on heart valves and things like that they are there to make sure we can all enjoy our lives for as long as possible and remain as healthy as possible. >> this is getting too grim. we have to leave it there as we ponder mortality thank you very much for both macro and micro thoughts we appreciate it >> thank you coming up, my next guest says the housing market is in the beginning of a downturn.

he joins me next to make his case as mortgage rates close in on 5%. there is a billionaire tax battle on capitol hill with the white house proposing a new tax on high income households. the details ahead of president biden's remarks next hour. "the exchange" back right after "the exchange" back right after this (vo) verizon business unlimited is going ultra! get more. like manny. event planning with our best plan ever. (manny) yeah, that's what i do. with 5g ultra wideband in many more cities,ing with our best plan ever. you get up to 10 times the speed at no extra cost. verizon is going ultra, so your business can get more. your record label is taking off. but so is your sound engineer. 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 flexshares etfs are built with advanced modeling. to fill portfolio gaps and target specific goals.

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welcome back to "the exchaj". m mortgage rates have surged the rate on a 30-year jumped to just under 5%. it's up 50% from a year ago. my next guests warns that's a huge impact on the housing market he says he's expecting a 25% drop this summer let's welcome in the chief economist at pantheon economics. i guess the only thing i wonder is about pent up demand from buyers trying to get into this market could that help bolster sales in the months to come eve within higher rates and so forth? >> yeah. there's not much sign of that at the moment we've seen mortgage applications falling for three straight months i'm pretty sure april will be the fourth it's a response to the massive rise in rates.

back in september the 30 of year rate was just over 3%. now it's approaching 5%. plus house prices have gone up since last september so affordability astaken a hammering. and people aren't dumb they can see this rise in rates. they can see the impact on their projected monthly payments so they're stepping away from the market at quite a rapid pace. i don't see any bottom to it just yet sales will follow where the mortgage applications tell us. >> the stocks are telling us the builders are trading at six times forward earnings it's more or less what we saw in 2006 the lending stocks have been terrible as refinancings have dried up even some of the stocks like home depot have hit a softer patch. where are we going to be in 12 months this feels different from the housing bust that was one directional plunge. this time around, people need real estate as an inflation hedge. they have families and real demand work from home has changed

things a lot i can't figure out what it's going to look like in 12 months. >> yeah. that's a really interesting point. we certainly have seen this massive surge in demand for suburban single family homes inventory is the lowest i've seen it's less than two-month supply. that's low that's why prices have gone so crazy, but the problem is there's an enormous barrier in the form of these high interest rates which haven't peaked perhaps when they peak, and i don't think that's until the end of the year, we might see some people coming back in. but the thing is nobody wants to catch a falling knife. and nobody wants to be the last guy to buy into a market that's about to peak. then that's risy you lock into an expensive mortgage and may have bought at the top of the market. having said that, i don't think prices are going to roll over. just to be clear i'm talking about a drop in home sales. it's already started we've seen that in new and existing home sales already. they have further to fall. but because the inventory is so short, i'm not expecting prices to roll over

this is not 2006, 2008, we don't have a crazy leverage boom or crazy adjustable rate mortgages resetting like they did back then it's nothing like that at all. but we do have to unwind from this period of quite high demand, especially for existing homes. and that means we have to see a period of adjustment i don't think it will last forever. i don't see a multi-year correction like we saw back in the 2000s. but i do think we need to adjust in the face of what's been quite a big spike in rates it really hasn't peaked yet. >> it's kind of the case study for what the fed is doing here they more or less want activity to slow. housing affordability has gotten so bad so put your point differently, we're going to see home sales plunge anyway either because there were so few of them and the price was out of reach or in this case because they're trying to kind of break the market and you mentioned this is -- it will be a drag on gdp is this a healthy correction is there a sense in which by slowing the market now, we could

have it sustained its expansion cycle for the next five or eight years to come? >> yeah. i think that's right we cannot possibly continue running with home price increases running at 16%, 18%. that's not sustainable we need to see demand soften and inventory rise as more people decide this is the time to sell. in order to slow the price increases, that probably means lower volumes and will feed through to bids like home depot. all the stuff that goes with housing is going to weaken, but it's not going to collapse like in the mid 2000s i don't think it signals a broader allover in the economy the other thing that happens is as house price inflation slows, they can worry less about rent rent is the biggest thing in the index by miles so when house prices are rising at 15% a year, the fed gets nervous about what will happen to rent down the road.

now, they're already picking up somewhat from the covid lows but if we can expect home inflation to moderate to normal to 5% or 6%, the fed could breathe a sigh of relief this doesn't break the economy, but it's going to be painful in the housing market specifically and the bit of the economy that depend on it the rest of the economy, i don't think needs to roll over and just to reiterate, i'm not looking for an 2007 catastrophe in the housing market, but it's so far out of whack, the shortage of inventory is astonishing. the price increases are crazy. it is vulnerable to a rise in rates and when rates go up by nearly 2 % in six months, there has to be a reaction you can see it in the data now it's just a question of how far it goes. >> and if you're right, it's going to be a very different feeling this selling season from recent years ian, great to have you thank you so much. still ahead, the unionizing efforts sweeping the nation. we'll look at why now and which

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like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq welcome back dow down 309 points. half a percent with the s&p only down a tenth of a percent the nasdaq up by 49 points let's get to tyler for a cnbc news update. >> thank you very much former president trump probably committed a felony by trying to stop congress from counting the electoral votes from the 2020 election that's what a federal judge says in a ruling that requires a lawyer to give a key document to the house committee investigating the january 6th attack on capitol hill john eastman had argued it is

covered by attorney/client privilege. but under a legal principle known as the crime/fraud exception, the judge ruled that that privilege doesn't apply because trump and easeman were trying to conceal or commit a crime. because the ruling is part of a noncriminal case, it does not mean anyone has been convicted of a crime even indicted the mayor of a town outside of kyiv says ukrainian forces have retaken control. the mayor of irpin says russian forces have been pushed out, although there probably will be more attacks his claim has not been independently verified russia's delegation arrived for peace talks in ukraine it's the first face to face meeting in more than two weeks ukraine's president said he's prepared to talk about making his country neutral if it will lead to a quick end to the war tonight on the news, more

workers try to unionize, will consumers avoid brands they see as anti-labor? that's at 7:00 p.m. eastern time kelly, i'll see you in a half hour >> see you then, tyler still ahead, president biden zeroing in on wall street and the all ma wealthy we have the latest on his new proposed billionaire tax and new restrictions on stock buybacks who it impacts and the likelihood of it passing that's nec this is the new world of work.

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welcome back @biden unviling his budget proposal for 2023 and taking aim at billionaires and some businesses we have details. >> reporter: the white house wants to raise taxes by $2.5 trillion over the next decade to pay for new domestic spending programs and reduce the deficit. about half the money comes from raising the corporate tax rate to 28 %. the white house would also get rid of tax brakes for the oil and gas industry and tighten international tax rules. the administration is going after the ultra rich with a new proposal for a 20% minimum tax on those worth $100 million or

more that covers both regular income and unrealized gains. it would also tax capital gains at the same rate of those of ordinary income. it was offset costs in education, housing and combat and crime. overall, the president's budget requests a 9.8% increase in defense spending a 27% increase for health and human services, education spending would go up by 20.9%. the sva would get 21% more and the budget for the department of transportation would rise by 6%. the white house says it had three priorities in putting together this budget fiscal responsibility, safety and security and investing in america. kelly, this is really just a wish list if you can't get through congress >> always is thank you very much. let's dig more into these proposals with my next guest who says while the wealth tax may not pass, some other forms of new taxes are likely on the table. joining me is dan clifton, head

of policy research at strategis. let's start with things people need to start thinking about >> first, thank you for having me i think we've been in a three-month break from tax policy since senator manchin said build back better is dead in december. now we're in a period as the supreme court pick goes through and gets approved in the senate, there will be a big shift to tax and spending policy in the second quarter of this year. and with russia/ukraine and everything else going on, i don't think this has been top of mind for investors and you're starting to see these negotiations begin to come back. investors should be focussed on where we are now, let's think about what the democrats are trying to do they're trying to cast renewable energy spending at 600 billion they're looking at health care provisions like expanding medicare or medicaid if you put those two together, you need about $900 billion of revenue over the next ten years and senator manchin is asking for even more tax increases for

deficit reduction. there is some level of agreement on some of the tax increases that have gone through one in the bill that passed in november in the house of representatives. in that bill, you had provisions in there like taxing u.s. multinationals extremely controversial. europe would also have to make similar damages. but it could go through. i think it's interesting that the president's budget put out a 28% corporate tax rate that proposal was completely lambasted by a senator last year, instead, they looked at a 15% corporate tax rate on the individual side, i think that congress really settled around a wealth sure tax as a portion of raising taxes on individuals. that would vkd capital gains and dividends. what the president put out today is that on steroids. an unrealized capital gains tax on income over $100 million. that's probably too far. you say why would the president do this? he's trying to show he's

reducing the deficit so he can win senator manchin's support for a deal, but he doesn't want to raise marginal tax rates, the red line for other senators. this is a very fine line that the president is walking i would say this is aspirational what he put there and we'll probably see more traditional tax increases if the democrats are able to get a deal that's a big if given how high inflation is >> i like the way you described the tight rope they're walking and what they're trying to do here my sort of followup question would be how are these proposals likely to go down with the public, that is really frustrated with inflation? >> right >> is this likely to be seen as more of the same that got us into this mess, or as solutions that could potentially get us out or as irrelevant to that issue altogether >> kelly, this is my 26-year working in politics. i've never seen polling data so lop sided to one issue and one

issue only voters want congress to deal with inflation as much as the administration would like to say these provisions are going to help inflation, voters know it's not going to do anything in the short-term and so what's happening here is that senators that are in very tight senate races, let's say georgia and arizona right now, they'd rather cut the gas tax or take provisions out there. i don't think it's a 50% probability the reconciliation bill can get through they may try and it may not work and then you could see a pivot toward relief for consumers. i've been arguing to clients pay attention to what's going on in the states i got 22 governors right now pushing for some sort of state gasoline tax or rebeat for consumers. mississippi cut taxes this weekend in three other states. a gasoline tax in the last ten days that's the pulse of the voters that's ultimately where congress is going to be

it may have to be separate, but voters are demanding a change on their cost of living going up so fast, and this bill does little to address that. >> that's what i wanted to know. that's it. dan, thank you so much appreciate you helping us comb through this dan clifton joining us still ahead from starbucks to amazon, workers are organizing in ways we haven't seen in decades. the question is why now andwha impact will this have on business business we'll tacklehane tt xt you aren't about to let any cyberattacks slow you down. so you partner with ibm to build a security architecture to keep your data, network, and applications now you can tackle threats so they don't bring you to a grinding halt. and everyone's going places, including you. let's create cybersecurity that keeps your business on track. ibm. let's create ♪ ♪

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can help you build a complete financial plan. visit letsmakeaplan.org to find your cfp® professional. ♪♪ welcome back since 2019 union membership has declined in bolte the private and public sectors this year the trend could be changing as workers across the country campaign to unionize kate rogers as more on the spreading movement >> high profile union drives and strikes are on from amazon to starbucks and rei to push for better pay and conditions. some want to improve things for

themselves and co-workers for years to come by organizing even if they don't necessarily stay in the jobs for the next decade. here's a 20-year-old working at amazon who feels confident in the union shop there >> what drew me to this campaign was just this feeling that i needed to be a part of real change in the united states. i believe that in order to bring about the change that i want to see, i have to be really involved in it and i am a huge pro-labor person, and when i saw this opportunity come about, and i knew that it would impact my co-workers and my own life very positively -- >> and while it might seem like union membership rates are higher than they've been, due to some of the campaigns, data tells a different story. in 2021 the union membership was 10.5%. down from 10.8 % in 2020 it was due in part to a decrease

in nonunion workers tied to the pandemic in the public sector is rate is five times higher at 33.9% versus 6 .1 %. even though it may feel much higher because all we're doing lately is talking about unionizing >> exactly the data makes it clear it's not changing for the companies involved are some of the drives more likely to succeed and have a bigger impact at the corporate level than others? >> yeah. that worker i spoke to in alabama said there are 6,000 workers set to vote. this is their second election. if you look at starbucks, some of the union drives and votes are over within 30 or 40 minutes, the hearings. they have maybe two dozen workers vote the seattle hometown vote, nine workers voted there. much smaller a little bit easier perhaps for the organizers to get in, make sure everyone is on the same page with amazon, much, much bigger group. so it's unclear what's going to happen, and it's going to take way longer to count the votes. >> absolutely, and this whole

trend is probably going to take a couple years to figure out >> but the collect i minds of young people was fascinating to me it's not the union drive that your grandfather was a part of so different today but they want things to be better collectively. and i think that's unique. >> kate, thank you we appreciate it good to see you. why are we seeing workers push for unionizing right now? joining me is steve, the ceo of the conference board steve, it's good to have you back and you know, on the one hand it makes sense to me because workers have bargaining power. they're collectively bargaining. on the other hand you could say aren't they -- can they do this on their own what do you think is driving this move? >> i think we're -- you're right. we're at an historic period of time we're essentially at full employment even with about 2 million workers still out of the work force versus prepandemic you have worker shortages in virtually every industry, and so even though we have a 7.25

federal minimum wage, it varies by locality, you're seeing the average wage in these retail locations and in warehouse locations quite a bit higher 15 to $20 an hour. so it is a buyer's environment they have the power right now. and so you see especially the two examples amazon and starbucks, where predominantly very young people are looking for higher wages and they're trying for all the leverage that they can get out of this now, we're concerned about this at the conference board from a wage price spiral standpoint you also have a 40-year high in inflation and so people are seeing their real pwages go dow as they're trying to afford food and energy increases it's all that pressure at the same time that's coming to the fore but you said it. it's only 6 % prevalence from a union standpoint here in the private sector >> yeah. and as you say, this could be driven by cost of living squeeze. kind of the misery index that we

talk about, and the sense of -- for that to happen, is it going to change the big picture trend which has been toward a smaller and smaller percentage of the country unionized over the years? >> well, i think look, unions have played an important historic role in this country. you know, moving toward wetter safety, a higher standards of work and benefits a enso forth but most of the employers today are pretty enlightened even at amazon, you have a situation here where they're paying between 16 there are and $17 an hour. they have full benefits, financial accounting, pto. they even have career choice where they're trying to bring people in and take unskilled labor and train them to be aircraft mechanics, nurses and so forth there's a whole education element to this. this is not the same situation that it was back in the 30s. so you have a very enlightened relatively enlightened corporate world today.

it is not shareholder centric. it's a multi-stake holder world with employees being very important part of this thing so it's not the same and when you put a third party between hourly workers and nonhourly workers, it is more difficult to communicate and drive individual performance so there are pros and cons here. it's not to be negative toward unions, but i think that a lot of the things that these people are seeking are happening anyway just due to market pressures >> you think they might have unionizing remorse >> they're going to have to pay 2 % to 5% of their pay in union dues when you have a union, you're representing all workers they have to so, therefore, people who are high performers don't get the extra bonuses or the extra promotions and so forth. it's a seniority system. there are some pros and cons it depends on what kind of

environment they want. but all of this is contributing, i think, to the potential of a wage price spiral which would be really a very difficult situation, and it's something else that the fed is thinking about. the fed is trying to react quickly to the inflation situation. but this whole wages go up, prices go up and where does it end? and kelly, i think that's the challenge here where does it end? >> absolutely. you're right economists, wall streed, the fed, they're watching to see how it pans out. up next, oil sliding on demand concerns as rising covid cases prompt a shanghai shutdown what does it mean r sonefogali here here we'll get that in a moment [zoom call] ...pivot...

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national average falling to $4.37 but still almost $1.40 more than a year ago. this bio tech name is volatile and dropping fast. we'll reveal the name and the pontl llt.teiafaou

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the world works with servicenow. welcome back check out shares of amylyx pharmaceuticals that's dropping. the meeting important both for the company and for the agency meg tirrell has more of what's at stake meg? >> hey, kelly. it is a small company. before today about $1.5 billion market value company and down today on the news. developing a drug for als which

is an awful disease. a disorder that doesn't have a cure and very few good treatment options. it has a drug in a physical two clinical trial and asking the fda for approval there is an advisory meeting on wednesday and the outside advisers vote on the drug. now based on the stock reaction people watching the story closely are disappointed with the fda's take on the documents essentially suggesting that the evidence is not necessarily super compelling but seeing the stock rebounding as folks on the street are speculating the fda may still go ahead and approve this and harkens back the big disease on the alzheimer's drug of last year very controversial the fda showing flexibility

there and then krcriticized for putting the drug on the market set setting ourselves for a similar battle. >> there are ore als treatments on the market? >> there are they don't cure the disease and only provide a few months for benefit. the community is desperate for anything to help. >> thank you. the sector overall is bouncing back. this was after a slow start to the year but they're seeing double digits climbs in march. let's ask michael ye do you have an opinion on the fda to do here >> great to be here with you i think like meg suggested this is a tough call. i think people are grasping at the straws hoping that the fda

makes a surprise decision. i think that's a tough call. we are not making a strong call on there but that's hope that fda is under pressure. >> i know at the time you were hopeful but seen a bad aftertaste from the decision, wouldn't you say >> absolutely. so again i think we are under the view that fda does want to do these things for patients and patient advocate groups. it is a difficult time. >> you think okay this is not exactly a breakout moment but suddenly and brian reynolds flagged this to us an area of the mark to see breakout behavior lately. what would you attribute that to >> it is really interesting. if you go back six to 12 months it is terrible for bio tech. i would like to say we had the punishment and seeing the growth

sectors sell off bio tech has taken a lot of that brunt. number one, there's short term traders believing to get a bounce here. i think people believe m&a is still in the cards from big pharma, pfizer making comments on m&a and hopeful thoughts on the oversold conditions. >> for those to side step the covid pipeline, people want to bet on that and people awhat's going on with the rest of the industry where are your favorite plays? >> i'd like to believe that as much as the sector sold off and the names if you look at a 12-month chart, moderna, they have huge sell-offs and we believe not a lot changes. vertex which we called out stock's up i think 16% year to

date and still think that can move higher. fate which has had more on the a 50% pullback that stock can bounce back and zylab and china stocks had a huge pullback. >> anything to specifically avoid before we go >> look. i think what we are seeing is moderna still hold rated still can have a pullback and saying that it does start to get interesting at 50 billion cap. moderna will start to get interesting. stuff there. still so many people focus on covid. >> absolutely. michael, thank you so much. >> thank you. speaking of bio tech, cnbc's healthy returns summit continues on wednesday there's the sharpest minds in

health care. head to cnbc events.com. that does it for "the exchange." just stay right there. "power lunch" begins right now yes. please stay exactly where you are because we have a big hour of power i'm tyler. kelly will join me in a sec. 50 times 2 banlg of america calling for two interest rate hikes in june and july we'll talk to the economist behind that aggressive call. inside the invisible war being fought online. the former head of the national security agency retired admiral mike rogers to discuss the cyber battle against russia with a warning to all