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 americans

kelly? >> thank you stocks are waivering we're down 169 nasdaq up. investors watch treasuries with huge moves yield on the 2-year up at almost 2.56 this morning. closing out 2021 at 1.5% bank stocks are falling. maybe on some intraday pressure. morgan stanley bearish on the group. >> it is setting up or the a big week for investors with lots of data to hit. housing, gdp and the all-important jobs report on friday it is april already, folks all that after stocks rallied the second straight week and the fed hawkish. what are the key things to watch? let's talk to stephanie link at

hightower advisers >> hi. >> hi. how are you? you're tilting more to growth as a sort of tactical play right now. why is that? even though value has been outperforming. is its play over >> well, i do not think that value -- it is overplayed. i think that you want to have more of a balanced portfolio in this environment because there are just so many unknowns right? we've been talking about the war with russia and ukraine. inflation. and the fed and the fed is behind the curve of course they are how aggressive will they be? we are not going to get resolution on these things maybe on the war but on inflation it is here, here to stay and really important. a lot of investors haven't seen

this kind of inflation in many, many years if the fed raises eight times this year i don't think you see a slowing of inflation it's massive so this week actually we will get some interesting data on inflation. 5.5% the fed looks at that. you mentioned the nonfarm payroll numbers. wages are important. 5.5% analyzed is the number to keep a eye on. in this environment with the uncertain you don't want to be over the skis and i was leading on value and cyclicals and now transitioning a little bit more on the growth side. >> i just want to you, were you surprised given chair powell's speech last week to tilt hawkish and then other fed governors did

the same were you surprised the equity market as resilient as it was and given the fact you and many others say we will have eight rate hikes that stocks are hanging in there as well as they are? >> there is no alternative really right? last week was a great week for the bulls. markets went up on good news and not down on bad news we are still down 6% on the year i think we are in a trading range. i think we are just churning until we get resolution on the issues. >> look at the names you like beginning with micron. >> micron, this one tempts me trading so cheaply at 8.5 times. stock down 16 times year to date i'm more interested what they say. they have a great color. on the front line. so they will talk about supply

chain issues and key because there's no supply being added. the market for memory is very tight so it's more color commentary on what they say but they are in a sweet spot in terms of 5g, ai, pcs >> and steph, that's the one name micron that you watch this week other one is paychecks i can imagine why but why is it in focus >> you know what we talked about accenture. same thing for paychecks right? only down 6% but it trades at 35 times earnings and will benefit from higher interest rates and of course outsourcing on fire by the way the stock down on the news because i think it's the valuation call

should it pull back this is one to put on the list. >> maybe a good soo inthat paychecks are doing well right? >> that's right. look we had great initial claims number last week best since 1969. that was forward looking indicator. so i think there's some pretty good things ahead for the company. >> stephanie, thank you. all that economic data this week will be very important for fed watchers to figure out the state of the economy our next guest said not only taken flight but flying high ethan, am i butchering this analogy? he is the first one to call for seven rate hikes back in january. now he thinks two half-point hikes in june and july followed

by quarter-point hikes at the following meetings it is great to have you. a nuance to point out. you are a meeting later than others why is that? >> yeah. i wouldn't dispute the idea of the fed going 50 in the may meeting. i think it is poshsible. likely to hike 25 and announce quantitative tightening and we think it's a pretty aggressive tightening program to announce two together are equivalent to doing a 50-basis point hike and then the fed going 50 at each of the next two meetings. it is a subtle difference. >> we spoke last time on the program when you said the fed could be a little back end loaded now they look front end loaded or at least that's what economists think what's changed >> the rhetoric. this has been an amazing pivot

from the fed they were very far behind the curve and did a series of pivots last one to acknowledge that they could go 50 if you look at the fed a month and a half ago saying no way to do 50 at the march meeting did 25 they seem to be signaling they needed more evidence to do a 50-base i point hike and then powell said we can do 50 and others say we can do 50. if they say they could do it i think they will do it. they need to get moving and only thing stopping them is their own rhetoric. >> where do these kinds of rate hikes take inflation by say the end of the year and what kind of effect do you think the rate hikes will have, a, on the bond market, and b, on stocks >> i am amazed earlier guest asked about the

strength of the stock market i am surprised of the strength with the market pricing in more than 200 basis points of hikes this year, six months basically none and the equity market has basically flat it is a pretty remarkable outcome. the only way to explain the ability of this teflon coated margt is t-- market is the fed hasn't gone all the way. trying to go back to neutral they haven't taken the big step which is to say, we have to hurt the economy. we have an inflation problem that will not be contained without actually slowing the economy down deliberately and we can't just count on supply chains to rescue us so we think that by year end there will be enough of a drop in inflation that the fed can slow down but our forecast for three and a

quarter is peak rate that's a conservative forecast the fed could go beyond that. >> that's interesting because we have seen people say 5% if you're john taylor and very few think that's a possibility larry lindsay is an economist to warn we will be in inflation in second quarter because it is hard to get real gdp to outpace inflation here what would your response be to those warnings >> the u.s. has tremendous momentum we'll get another blowout payroll number on friday we have 525,000 and another drop in the unemployment rate the household sector's never been this wealthy and liquid even in low income households they don't have the big wealth gains but they have very high income growth are wanls particularly growing in the low esz wage parts of the economy so the economy has resilience in

the next six to 12 months. i do worry going into 2023 if the fed decides they are losing the war against inflation, which very well they could decide, then instead of three and a quarter they go higher and do what it takes to get that big slowdown in the economy. when the fed's truly fighting inflation and not just normalizing you have to start to talk about the "r" word. 2023 recession is definitely possible >> yeah. it is the recession from overheating and having to catch up not from what they do right now. it is an important distinction ethan, great do have you. >> thank you. >> as he said there, you have rising interest rates and what he described as more aggressive than maybe discounting quantitative tightening. >> exactly. >> and budget deficits and

federal spending. >> compressing. >> you have three sources of liquidity not there right now. >> give me a stock market down 4.5% i take it. >> still just off 5% for the year i'll look at the portfolio to see where the numbers were they were bruising a month ago. >> imagine what people think seeing the bonds down this quarter. coming up, is russia's invasion of ukraine a watershed moment for the cyber security industry we'll talk to michael rogers he's seen a thing or two. plus, the brazil etf up more than 30% this year easily outperforming the s&p we'll look at the risks tied to what's been a winning trade. more "power lunch" is straight ahead.

quickbooks can help. an easy way to get paid, pay your staff, and know where your business stands. new business? no problem. success starts with intuit quickbooks. what if you were a global bank who wanted to supercharge your audit system? so you tap ibm to un-silo your data. and start crunching a year's worth of transactions against thousands of compliance controls with the help of ai. now you're making smarter decisions faster. operating costs are lower. and everyone from your auditors to your bankers feels like a million bucks. let's create smarter ways of putting your data to work. ibm. let's create you're a one-man stitchwork master. but your staffing plan needs to go up a size. 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

welcome back to "power lunch. dow down 150 we juan to check on what's happening with several notable cyber security stocks outperforming on the day so far with cloudflare, zscaler and

verisign among others. okta confirmed last week it was hit by hackers, said that the impact on the customers is very limited and affected a small portion of overall clients but shares up 6%, down on the month. back to you. >> thank you next guest said the russia-ukraine conflict is a watershed event and this cyber war is unfolding in new ways admiral michael rongers is with the brunswick group. admiral rogers, welcome. we were together a month ago and you said at that time that if the situation on the ground in ukraine is roughly static with where it was at this time and perhaps it is that you would

expect the outbreak over the beginning of a more vigorous cyber warfare front within four to six weeks we're still within this window but why hasn't it happened are you surprised? >> i think initially because the russians didn't want to expand the focus. they wanted to focus on ukraine. i believe they miscalculated they thought the war in ukraine would be over quick len wanted access to the infrastructure of ukraine once they assumed control. they didn't want to damage the infrastructure but i think as they fall into this period where they are behind schedule in terms of objectives on the ground i think putin is turning to himself and

asking the people around him, what can we do to change this dynamic? how could we impact the nations that are sarnctioning us how can we attack the economies gist as they do with us in the sanctions? i think cyber is an increasingly attractive tool. >> would you expect then an attack from government on government or from government on private sector infrastructure? or from criminal groups of maybe affiliated sanctioned by government to attack >> the sad thing is you outlined three scenarios and most likely is a combination of all three. i think it will be directed to government and military capabilities and the economic targts of the russians are largely in it private sector

poir, finance, transportation, energy and petroleum distribution those are not -- those systems aren't run by governments. the largest economic sectors in the private sector. >> are we up to the task and offensive capabilities in cyber up to the task what point does a cyber attack become an act of war that requires the united states or nato for that matter to retaliate against the perpetrators >> three big questions let's start with the third one first. an act of war in cyber is somewhat undefined there's no global standard nato and the united states have both said that that significant cyber event may trip the article

v, being that component of nato an attack against one is an attack against all only invoked once in the aftermath of attacks on 9/11 what would constitute an act of war? it depends on the nature of the target and effect or impact. it is going to be very situational. >> will a cyber attack occasion merely -- i don't mean to minimize it, but merely a cyber response or could a cyber attack occasion a kinetic response? >> the short answer is, yes. it could trigger a response that's not just tied solely to cyber. i think that's something when i was in government and we would discuss this at the white house

one of the points to try to make in the internal discussions just because someone comes at us the united states in cyber or an ally doesn't mean we have to respond in the similar methodology using the same technique. rather, think about the economic advantages, our diplomatic and poli political advantages >> but you're not suggesting, are you, the possibility of a very strong cyber attack on domestic infrastructure or military we would not retaliate with conventional weapons, missiles and things? >> i'm not saying i would rule it out but we would -- situational. a challenge is the u.s. objective is for this not to

expand for it to not to escalate. >> right. >> not to go into new dimensions of conflict if you will. over and above what's happening in ukraine and so you're always mindful of that. what's the objective >> thank you great to see you again, sir. >> thank you. coming up, an emerging opportunity in brazil and latin america. plus, a clean start. we talk about renewable energy a company working to develop more renewable drenging water. will smith slapping -- we have an angle for this slapping chris rock on stage at the oscars could the moment have an impact on his brand that story next.

-oh dad, the twins are now... -vegan. i know. i got 'em some of those plant burgers. -nice. -yeah. voya provides guidance for the right investments, and helps me be prepared for unexpected events. they make me feel like i've got it all under control. [crowd cheers] because i do. okay, that was awesome. voya. be confident to and through retirement.

[ laughter ] oh wow wow! >> that was one of the most shocking moments in oscars history. will smith slapping chris rock in the face after making a joke

about jada pinkett smith does this hurt his hollywood b bankability or the opposite? julia boorstin joins us now with more julia? >> it is too soon to say how it impacts smith's career smith drew applause walking into the "vanity fair" party after the show and some people telling me that nothing will happen now and hearing some academy members pushing for smith to apologize to chris rock. no word from the academy saying last night it doesn't condone violence of any form smith is known as a bankable global movie star. they have built a media empire westbrook entertainment sold a 10% take to the blackstone backed candle media in january

the company made a wide range of content from king richard, warper brothers to netflix and facebook and a snapchat series will from home apple tv plus spent a reported $100 million for "emancipation" with smith and set to be released this year reputation expert mark paul said the right thing to do is to make a very humble, sincere apology to chris rock and noting many contracts have a morality clause to prohibit certain behavior we have reached out to a range of studios with content deals with smith and not got up any response. >> is chris rock heard from on this >> he spoke after the slap

i haven't seen an official response there's a question that he will press charges. >> can you imagine this is -- >> two of the highest profile guys in entertainment. >> everyone is if it's scripted. lady gaga didn't show up for something. what about the ratings this did a lot to boost them, didn't it? >> no. i would say that this happened way too late in the show to actually impact the ratings. this is in the last half hour of the show and the show over three hours long so too late to have an impact and did have an impact in terms of how much people are talking today. the ratings last nigh -- >> saying that 15 million number we saw up 50% from the previous year is earned going into that

moment >> yes last night 15.3 million people tuned in up from 10.5 million the year before but the year before was a weird year where not many releases. held not in the typical theater with the same celebrities. it is actually last night's ratings second lowest of all time and second time to dip below 20 million so yes it was up from the very bizarre year but way down. >> i think the oscars lost the fizz because people watch on streaming. gut instinct, does this make will smith less bankable, yes or no >> i think that he is going to apologize or do something, on red table talk with his wife epa have it be there but i think there's some conversation. i can't imagine it dies the way

it is right now. >> thank you, julia. let's get to frank holland with a news up date. >> good afternoon why florida's governor signed a controversial bill into law. republican ron desantis said parents can send the kids to school for an education. opponents called it the don't say gay. disney announced said they will fight for the bill to be struck down in the courts. employees criticized the ceo not opposing the bill. house panel invest gatding the attack on the capitol is leaning to call jenny thomas to the committee and will discuss it tonight the panel has copies of text

messages from thomas urging the white house to fight strongly to keep then president trump in office and offering suggestions. she is married to justice thomas. >> thank you. ahead, the white house to unveil the 2023 budget proposal. including a new tax targeting the wealthiest americans president biden set to discuss this hour on the details of the budget we'll inbrg it to you live when we'll inbrg it to you live when he appears each day looks different than the last. but whatever work becomes, the servicenow platform will make it just, flow. whether it's finding new ways to help you serve your customers, orchestrating a safe return to the office... wherever the new world of work takes your business, the world works with servicenow.

welcome back 90 minutes left in the trading day. stocks, bonds, commodities and the president's budget proposal. let's begin with bob pisani in the stock market today bob? >> 3 to 2 declining to advancing stocks normally when oil is down as today on demandconcerns in china usually the rest of the market gets a lift take a look at the commodity stocks when oil is down the commodity stocks typically are to the downside not just oil stocks but some

material names what's unusual is the response to the market. normally getting a lift from the tech names for example but intel is not doing too much today. looking at 3m not doing anything jpmorgan, banks not doing anything for a while the only thing on the upside is defensive stocks what's moving in consumer discretionary group are two stocks 50 stocks that are consumer discretionary group and top two $3 trillion in market cap if they're up the whole sector is up tesla of course on talks of a dividend to do the splits in the form of a dividend amazon having a nice day finally point out, everybody, three days left in the first quarter. down 4%. a remarkable run considering the problems the market is dealing with >> absolutely. thank you. bond market, the losses have

probably been larger year to date let's get to rick santelli with the latest rick >> only losses if you're positioned for yields to go down if you're positioned to go up they are not losses but kelly is right. aggressive selling every maturity from 2s to 30s made a new cycle intraday high 30-year by a whisker 2.64 look at an intra of 2s 2.41% after a crummy auction 2s, 3, 5s higher on yield. look at a 2-day of 10s up to 2.55% before revesing. but here's an interesting chart. chart of december. 22d fed fund futures tightening

a new low price. which implies a new more aggressive fed watching 3-month bills they were auctioned today at the highest yield in two years >> wow thank you. some headlines from the oil market today we see big losses there as china shuts down parts of shanghai pippa? >> that's exactly right. oil is declining as shanghai goes into shutdown it's the largest oil importer in the world. the country uses around 15 million barrels a day of oil, 15% of worldwide demand and imports 10.3 million barrels a day day. also weighing on prices is peace talks with ukraine and russia slated this week in turkey

wti down at $106.21. brent crude at $112.62 energy stocks are following lower. all down about 4%. >> thank you president biden is scheduled to speak in a couple minutes of time about his budget which is expected to include a new way to tax the wealthiest americans we have robert frank to explain and we'll have steve rosenthal if this can happen robert, let's start with you. >> it is called the billionaire minimum income tax and apply to people with $100 million or more in income and this is a minimum tax of 20% on any both realized and unrealized gains and taxpayers ten years to pay the first payment and then five

years. zuckerberg, would have paid $25 billion as a one-time tax and going forward this year down 41 billion so he gets a credit of $8 billion 17 billion there and then the rules also apply to ill liquid assets and private companies and they would also be subject to the tax the white house says the plan would raise $360 billion over 10 years. about half that revenue from america's 720 billionaires so this is a tact that called a brake light their tax but $360 billion over 10 years with a handful of people. musk himself would pay $50 billion that first year. kelly? >> $50 billion i'm sure it's in the bank. no problem how feasible is the proposal

joining us is steve rosenthal at the tax policy center. is this legal? >> depends on whether congress passes a new law and whether the courts uphold the law. and so, a lot of this billionaire tax stop is novel, untested there are good arguments to pass it for the courts to sustain it and good arguments against the tax being constitutional we have to see how things play out. >> what would the argument against constitutionality be >> our constitution generally prevents tax on property or on wealth that's actually what led us to the 16th amendment to allow taxing on income which at one time was viewed as tax on property until the 16th amendment made clear a tax on income and was allowable but we

don't really know about taxing unrealized gains as to whether that would be income that would fit under the 16th amendment or more generally is a billionaire's income tax in effect a tax on wealth because you have to be -- not a billionaire but $100 million of assets and so if the tax is turned on or off by ownership of property is that in effect an unconstitutional tax on property but taxed on the unrealized gain others protect -- argue it is not. >> for a country not supposed to be taxed on property i feel like i'm very taxed i don't understand it. let's say i'm the founder of a

startup company and i have a lot of stock at an extraordinarily low basis and then worth $500 million. would i be taxed on the difference between the low basis and the 500 million in year 1? okay and then what happens in year two? am i still taxed again from the low basis to the 500 million or from 500 million to whatever it is in the next year? >> sure. by the way i should correct. federal government is limited on property tax. >> oh. >> they can tax you up as much as they want on property. >> and they do. >> okay. with respect to your hypothetical, one of the interesting things about the biden's billionaire minimum income tax is it is not really on bill theirs, not a minimum tax. it is actually not an income

tax. but it's a deposit against tax liability. it's a prepayment. and so the government will collect the first year 20% of your unrealized gains. $100 million in your case of taxes is an stallment plan where the taxes paid over nine years at the start of the new proposal and then five yearings later into the proposal. an installment plan of writing checks but it's a prepayment of ultimate tax liability when you sell the stock or separately biden wants to tax unrealized gains on that and the credit allowed against any tax at death now in your example the stock appreciated a little more and so there's further appreciation and an installment tax on the increment. if your stock disappeared in value you get a refund with

respect to the fact that your stock plunged in value so it's a peculiar thing this minimum tax really isn't a billionaire's tax or a tax at all and not really on income it's peculiar. >> why do we only tax realized gains right now? >> we tax realized gains principally for administrative convenience. when you tax unrealized gains there's problems two in particular. we don't know how much tax to pay because we don't know the price of the property would actually be sold for we have to guess at that. >> yeah. >> you don't have the money. there's no real sale and so you don't have the money biden's proposal to tax unrealized gains tries to accommodate the two limitations. he tries to allow some favorable

valuation rules and also tries to allow some installment payments to afford taxpayers the ability to come up with the money later but that's typically why we don't tax unrealized gains. it is hard to know the value of the property and gains might be and hard to come up with the money. >> musk could pay $50 billion in installments. >> like all of us. >> exactly. >> steve, thank you. what happens with your art work? i buy a painting and that van gogh that i luckily spent $10 million for is worth $200 million. >> nfts? >> i don't have that many millions in the bank. >> 28-year-old bought an nft in the pandemic worth let's say $100 million and come up with a few million to pay that off.

>> yeah. seems tricky and a great thing for appraise everies. >> and the irs. emerging opportunities outperforming the s&p this year. we'll break down those moves tesla asking investors to allow another stock split and climbing there you see it up 8% today and we are awaiting president biden's comments on the budget which those tax changes are a part of. we'll bring them to you when he begins we'll be right back.

one of the hottest trades in the world this year has been brazil the i shares etf that tracks that country's market up 33% similar numbers across latin america but can the numbers hold seema mody looking at the markets for us hi, seema. >> hi. dump russia, buy brazil is a go-to strategy this year and the most popular way to invest is i shares brazil etf that saw its best week since november of 2020 gaining about

8% on trading at a discount. the top holders of this etf are asset managers morgan stanley, ubs tennessee pension retirement system in light of china's issues and investors continue to pivot away from russia, bank of america's latin america team says this specific region is ripe for outperformance it's worth noting the gains in this broader region are not confined to brazil argentina, mexico, peru, higher on the year. double digit dpans for some of these markets. a foreseeable challenge will likely be inflation, interest rates in countries like brazil already above 11%, and that specific economy is so reliant on agriculture, the recent soaring fertilizer prices continue to cut into margins that will likely be a concern for the foreseeable future for a lot of those markets, they're heavily tied to the move in commodities >> bingo, seema, thank you very

much >> after the break, we'll highlight one company working to create renewable water sources our clean start series continues next my best friend sophie says you've been a huge help. at ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us. our neighbors the garcia's, love working with you. because the advice we give is personalized. hey john reese, jr. how's your father doing? to help reach your goals with confidence. my sister told me so much about you. that's why it's more than advice worth listening to. it's advice worth talking about. ameriprise financial.

welcome back you heard of solar panels. what about hidropanels they create water out of air diana olick joins us with details in her continuic look at climate startups >> infounder of source global said it's doing for water what solar did for electricity. as parpts of the world and the u.s. experience a drought, it couldn't have come at a better time >> we take sunlight and can produce water anywhere on the planet >> cody has been studying water for decades. where else in the arizona desert at asu he founded source global in 2015 with a unique technology designed to address a potentially catastrophic climate issue, drought >> the world health organization has pointed out by 2025, three years from now, half the world's population will be in water stressed areas

>> source hydro panels use fans to suck in water and hold it in a concentrated form, about 10,000 times more concentrated that in the atmosphere using the warmth of the sun, the system converts the water molecules into liquid water which is collected in a reservoir inside the panel and released as pure water >> we can now make perfect water at your home, in your school, in your community in a way that is bringing it into the 21st century. >> source panels are now installed in 52 countries in 450 separate projects. it's backed by bill gates brak through energy adventures, black rock, material impact funt, and 3 x 5 partners total funding, $150 million. while technology like this is desperately needed in places like india, here in the u.s., there are 1.5 million miles of lead pipes still in the ground and about 750 water main breaks

a day. so the business opportunity here is pretty huge guys, back to you. >> we're just starting to warm up to solar panels on people's homes. weight has always been a concern. reliability, obviously cost. what about those factors for hydro panels hydro panels are slightly cheaper than solar they're about $2,000 a panel and the experts at source global say you need about four or five to get enough water for one home. about $10,000 investment >> wow, all right. diana, thank you very much >> more "power lunch" is next.

♪ (jazz music) ♪ (thank you, have a nice day.) ♪ (trumpet solo) ♪ (bell dings) (pages slipping) ♪ ♪ ♪ (trumpet solo) ♪ ♪ ♪ (typing) (bell dings) ♪ ♪ (cheering ♪ ♪ (typing) ♪ ♪ ♪(trumpet solo) ♪

tesla wants to split its stock again. president biden. >> a busy couple days. for all of you let me begin by saying, thanking director young you know, you have heard me say this before over the years my dad had an expression he said don't tell me what you value. show me your budget, i'll tell you what you value don't tell me what your value. show me your budget and i'll show you what your value am budget i'm releasing sends a clear message of what we value first, fiscal responsibility.

second, safety and security. thirdly, investments needed to build a better america the first value is fiscal responsibility the previous administration, as you all know, ran up record budget deficits. in fact, the deficit went up every year under my predecessor. my administration is turning that around. last year, we cut the deficit by more than $350 billion this year, we're on track to cut the deficit by more than $1.3 trillion $1.3 trillion. that would be the largest one-year reduction in the deficit in u.s. history. and here's how we're achieving it, this record deficit reduction. first, we're growing the economy. we created a record $6.7 million jobs since i took office and generated a gdp growth of 5.7%, the best economic growth we have seen in this country in over 40 years. this has led to substantial increase i