>> computer science phd doesn't hurt great stuff. thank you so much. that does it for "the exchange," everybody "power lunch" picks things up right now. thank you. see you in a couple seconds. welcome to "power lunch. here's what we got for you on a friday afternoon peak employment. jobless rate closing in on a 50-year low. wages continue to climb. is this as good as it gets for the job market and why doesn't this economy seem to get any respect? plus, the great rotation as the economy shifts our market pro will tell us we are on the cusp of a move back to growth and far better valuations. where he is finding opportunity. kelly? >> thank you quick check on markets stocks fighting back into

positive territory dow up by a point. down 119 at the lows s&p down 7 nasdaq down 45 we have seen nervousness in the industrials. they are the worst former in the s&p with jb and norfolk southern especially hard hit. why? you could say it goes back to the drop in ism new orders the 2/10 spread invertinging down 7 basis points negative that's a firm inversion. short term rates rising. hawkish with high average hourly earnings >> how can anything be down 273% >> i know. >> good question you need a math phd for that yield curve inversions, i haven't spent so much time

talking and thinking about yield curve inversions in a long time. many say it is not a guarantee that's the topic of an op-ed written by the next guest saying the realtime data changing the forecasting game ron insana is a senior friend. ron, welcome >> indeed. more so after yesterday. >> that's right. walk us through this yield curve conundrum here and what it tells us and doesn't tell us and why one yield curve, 2 to 10s, might be inverted a little bit but the 3-motto 10-year bills is anything but inverted. >> you and i -- i don't know how many times we talked about this over the last several decades but the work done by arturo

astrella was really focused on the 3-motto the 10-year relationship and the 3-month yield is significantly below that of the 10-year spread arturro told me it is not the spread most closely watched by the federal reserve. and yet, given that the fed is expected to raise rates by a half point next meeting we could see a significant flattening of the curve and getting to the point where it's flashing a yellow or red warning sign about the imminence of a recession the time is between nine to 15 months arch is 12 could speed up with fed policy moves but i don't think we're fully envert jd the spread is at

least a yellow warning sign that the economy is slowing now or will slow in the immediate future. >> a point you make in your op-ed is that it used to be that there was a long delay or a longish delay between qul it is the yield curve inverse or the fed raising rates and economic affects but you say that this is a different era. i agree with you about speed now and the fed is far more transparent. one can question whether that's helpful. it is more so than volker or miller or greenspan. >> gosh yeah we go back to the era as do a couple colleagues where not only did we not know what the fed was doing day-to-day, but back in the '80s the fed wouldn't tell

us it changed interest rates until after the fact it is long after something transpired the fed watchers watched the daily interactions and the thursday afternoon money supply and now telling us what they're doing and what they will do. looking at mortgage rates, they move in realtime when we were young every they every based on the 11th district cost of funds, an interest rate that moved monthly so the notion that the fed operates with a lag is archaic and the speed with which the fed is moving may have a pronounced impact on the economy and why the curve is flattening so quickly. >> a point that's definitely worth pondering is we need more

workers. >> more people. >> and yes, there's still a number of workers on the sidelines but we are overheating. >> yeah. for all the wrong reasons. not because we used up a supply of workers that is well in excess of the number of available jobs we have more jobs thannen employed individuals constrictive immigration policies a baby bust. as we discussed recently, last year the u.s. population grew at the slowest pace in the history of the nation so the old economic equation that you need population or labor force growth and produck tyty growth is gdp growth we need both and don't have them. the fed raising rates will not increase the supply of workers or the cars or homes which we are short of these days so i get

nervous about the fed not just getting aggressive but reducing the size of the balance sheet when the moves to lo not alleviate the pressures of today. >> well said good to see you. have a great weekend. >> you as well. the s&p is up about 8% from the mid-march lows next guest said whether it's in this, in, in opportunities are emerging let's bring in the guest jeff, what usually is the path as an expansion plays out? is this normal or atypical >> i think that we are seeing is normal we saw value do really well off the bottom with a rising tide lifting all boats scenarios and when growth slows down investors look for growth. we talked about the yield curve.

the fed is hiking in a different environment than 2015 and 2018 pmis went from 47 to 60 so we had a rapidly accelerating economy. you can make a good argument that we have the opposite now heading into a slowdown. investors look for companies to maintain earnings growth so that's why i think there's opportunity in some growth names that lagged a lot this year so you eptder at a bet every valuation. >> netflix rh down 40%. cyber stocks give us some examples. >> i'll start with facebook because it is a stock everyone loves to hate and i think the choices recently even make me question things with the company long term but talking about making money in 2022 i think facebook is an interesting stock. down 40% trading at a below market pe

it is a company with high margins. this is the type of company investors for. the stock held the 00 level. important technical level and facebook's out importanted the qqq by 700 basis points and starting to see investors look for companies like that though everybody likes to rail against facebook. >> including a guest yesterday and netflix. do you think facebook's earnings and for that matter netflix's earnings are not secure. but are they going to be strong enough to justify the prices and translate into higher growth for the prices >> we can take netflix as an example. everybody wonders can they produce content and continue to grow reasonable questions i think stability at the price

levels interesting. pre-covid high i don't think it's stalling on the donside by coincidence and looking at the valuation relative to growth it is 2008 levels and the forward looking growth portfolio is different but i don't think it's over. long way from market satch wags. the company is talking about 30% earnings growth to 2023. you have a good performer here. >> as we back out to the big picture again what is it as you watch the fed to do to change the nstment strategy what would happen with the economy to make you want different leadership right now >> i think the goldilocks scenario is that inflation starts to come down and the fed is able to back off in a way to explain. then you see an economy that

doesn't slow down as much as i expect and maybe the leadership portfolio doesn't shift from value to growth but i think the fed is playing with fire rolling the dice relative to growth and because inflation is persistent they have to tighten until something breaks inflation or economic growth or the market it would be that inflation coming down giving the fed flexibility to change my thesis. >> goldilocks is worst-case scenario for the growth stocks makes sense. we appreciate it. all right. one block down about five or six to go. mortgage lenders coming off a difficult quarter why the stocks are slammed. is there more pain ahead jd named a top pick. wynn upgraded. and chinese ev startup neo sees

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welcome back to "power lunch. i'm dominic chu. shares of liquefied natural gas company telluriah was upgraded the equivalent of a buy rating

europe aims to move from the russian oil and gas trade. the stock up 100%. doubling this year analysts expect the prices to be high for the future. tellurian, one big ecosystem i'll send back to you. >> thank you. rising rates continue to take a toll on the housing market with mortgage data showing the brunt of the hit volumes down 10% refinance applications down 60%. 30-year fixed rate near 5% been taking a toll on the lender stocks our next guest said pain is here to stay and some names are positioned to weather did damage let's bring in kevin barker

piper sandler. i think the data said less than 2 million refinancing candidates left in this country what other options do they have? >> yeah. they're under pressure with higher rates margins are squeezed value youm's coming down you have some offsets that aren't apparent with mortgage origination volume the companies operate mortgage servicing businesses with an extension of cash flow when mortgage rates go up and duration extends so a couple names including penny mack financial and mr. cooper group with large servicing portfolios to benefit from this environment with a rising interest rate. >> we spoke with mr. cooper, not the man, the company, about that very thing where he was arguing similarly that it's a bet every story or segment of the market

to be in you have an overweight on them and penny mack what about loan depot? overweight there >> yeah. we like loan depot with valuation and more efficient than it was pre-pandemic the company did lose money back in 2018 when the market is very competitive similar to now but the company is more efficient and pricing in some pretty dire scenarios. i think that the downside's fairly protected >> this is maybe an off the wall question but when you see this kind of decline i always begin to wonder is there consolidation around the corner? are they buyout candidates if so who would be the seller? who might be a buyer >> you could see a consolidation in the space

i think it has to happen the mortgage market is shrinking by 35% this wyear and likely to continue i don't see many of these larger non-bank originators selling at this point but you could see some banks coming in to potentially buy things on the cheap on a price to tangible book we saw citizens buy franklin american in 2018 we saw western alliance purchase ameri-home last year so there's potential banks that may look to buy it but tough to see the larger ones sell like robert >> right is rocket the largest mortgage originator in the country? >> yes, it is. >> that's amazing. >> neutral on wit a $14 price

target where does rocket go they only ipo'd a year or so ago. when you look at how -- we spoke about this earlier this week and bearish on home sales and thinks nothing like 2006, 2007 where we collapsed and took a decade to cover. could the companies ride this out? >> yeah. i do think these companies can ride it out. rocket is not levered. it has a very efficient and profitable franchise the company produced over 30% return on equity for five years straight prior to the pandemic probably best brand in the mortgage market today. they will be a winner and matter of timing and when they turn. >> bottom line, is this going to be all about the rate hike cycle

we have heard people say you can't buy the builders until rates peak is there a correlation for your space? >> there is some correlation there but starting to see the yield curve invert it is a very, very good time to buy the stocks and i would argue with the prices where they are the downside is fairly protected. >> wow that's the headline then good time to buy this portion of the market thank you. appreciate it. >> thank you. all right. ahead on the program, to go with the flow what does that say >> e-s-go. >> oh! oh okay. >> go with the flow. >> we'll talk about esg fund, especially with controversial names like metta despite this fund flows are strong and we will dive deeper plus it is friday.

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welcome back time now for the etf tracker looking at the first quarter no surprise the winners are energy etfs with $5.5 billion of inflows. the russia-ukraine war creating fears of supply disruptions helped increase energy prices. huge spikes. and the top 20 u.s. listed etfs focused on the energy sector the best of the best the united states natural gas fund up 60% vaneck oil services up 56% s&p oil and gas equipment up 55% so strong and consistent gains for the top three. on the flip side it was a rough quarter for tech and especially for cathie wood the ark innovation etf, the ark w, those are among the worst performing major etfs this year. ark innovation down 29%.

all of this data comes from the partners at track insight. and now to frank holland for the cnbc news update frank? >> here's what's happening house of representatives voted to decriminalize marijuana at the federal level. states can set their own policies why three republicans voted for the bill and two democrats voted against. it is not expected to win senate approval. an alabama man parking a pickup truck full of weapons is sentenced to nearly four years in prison. his pickup had components of molotov crocktails the judge said she has not heard an explanation he said he never planned to hurt anybody. an event that's no joke pledging to give away 7,000

gallons of gas people started to line up laths night for april fuels. not my pun that's the title the gas was gone in under two hours. he expected to give away to cost 30 grand gas prices up 45% in the last year. >> i'm glad that's not a joke. >> thank you ahead on "power lunch," have we hit peak employment? can the damage never be repaired we'll discuss it with the head of the urban league. this is the new world of work. each day looks different than the last. but whatever work becomes,

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seen both sides of the flat line today. it is a muted trade. a jobs friday. for the broader s&p 500 up 18% at the lows down 23 or so or close to a half a percent. from a sector standpoint real estate and consumer staples among the best on the day. industrials, tech and financials are laggards there stock headlines is shares of wynn resorts on the rise after an upgrade citing clarity over the regulations helping others with operations higher the meme stocks are a roller coaster ride remember that pop of gamestop into the regular season after laying the groundwork for a possible stock split the gains are gone

it was up around 14% at the highs. now down watching the u.s. listed chinese stock names. all four of those are part of the large cap nasdaq 100 helped along by chinese regulators who tell cnbc in a statement that they have convened a meeting this week with the big accounting firms and told them to consider prepping for joint inspections from the u.s. and them to ease at least for now the possible delisting of the names. the chinese tech stocks taken a beating over did last year. >> absolutely. thank you. now to the bond market where once again everyone is looking for inversion. road signs they dangerous curves that's with rick santelli. >> it is inverse friday. let's look at one thing that's

changed. new highest yield against all maturities on the curve, 3-year notes. trading 2.61 last year at 96. less than 1% now 2. 61 up 165 basis points. 20s versus 30s inverted in october. october 27 to be exact of last year oif a question for you how many curve inversions on the treasury curve right now today >> right now today how many inversions are there right now three. >> i'll tell you what. i'll give you the answer 13. >> 13! >> all right >> only off by ten >> 1-3 yep. 3s against everything.

then you have 2s to 10s, 2s to 30s. 5s against 10s, against 30s. 7 and the old guy 20 versus 30s. 13 inverses. back to you. >> lucky 13. thank you. oil closing for the day under $100 a barrel. hi, pippa. >> oil is on pace for a worst week since april 2020 after president biden yesterday announced the historic emergency oil release and then today said members of the international energy agency will tap the reserves biden saying he coordinated this release and failed to give an exact number and also saying this is denying putin the ability to weaponize energy against american families. yesterday he referred to rising gas prices as putin's price hike

at the pump. wti down at $99.60 earlier below the 50-day moving average for the first time since january 4. brent crude down to $104.347 back to you. >> thank you. money flowing into esg funds. kristina partsinevelos has the details for us k-part >> inconsistent and the trillions keep flowing into these esg funds. even with the russian invasion of ukraine the inflows held up with net globalinflows on pace to surpass february levels showing there's a relicense on rating providers but, but new research question it is reliability.

providers sift through the variables like dealing with corruption they crunch those numbers and come up with a single esg rating score and you can see how skoefrs vary this is for phillip morris 62 and 84 and shouldn't fluctuate from week to week unless there is a documented reason and yet, mit sloan researchers found over a six-week period 85% of firms changed without any public announcements the change in score is a big deal because when they score people get interested and invest money influencing performance and may not be warranted speaking of performance, let's take a look at the esg etfs

all down at least 5% and this mit study highlight it is incentive the reason to say look at the great returns and useful for investinging but may not really be the case right, guys? >> a question. would the esg scores be affected by change in share price, a commodity price, board makeup or only change if the committees change them? >> no. two different questions. a change in boefrd yes female versus male and minority representation and if it's change in stock price no that should not affect an esg score. >> right it wouldn't have a way to automatically changing it. no. >> no. it doesn't automatically because the scores are -- there's a math

to them that the rating provide everies choose they decide which elements go in there and they are constantly crunches the numbers but the point is that the skoefrs are changing so often and none of us are aware this is happening and sometimes upside i will invest and maybe it is not warranted. >> esg fomo is a no-no kristina partsinevelos, thank you. americans are definitely returning to work and coming 'ldiusith demands. wel scs that next. ♪♪ at cdw we get your teams work in different places, in different ways and across countless different networks. so how do you get everyone on the same page? microsoft surface devices, orchestrated by cdw.

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labor market remains red hot. unemployment rate fell to 3.6%, near the pre-pandemic low. added 431,000 jobs participation rate ticked up wages jumped more than 5% to the highest level since may of 2020 but some warn that rising inflation and higher interest rates will slow the momentum

is this peak employment? are we there peak wages let's ask mark morial, president and ceo of national urban league i don't know that we can say this is peak job growth when we are more than a million jobs below the pre-pandemic level of jobs >> you hit the nail right on its head we are not at peak job growth. not only a million jobs below where we were before the pandemic 5.7 million people who want jobs but not in the labor force and another 2.5 million people who are not working because the employers shut down in covid they're many, many more americans who want to work and i think many, many employers looking for high-quality employees and we are not at peak job growth, not at peak levels

and the disparities between blacks and whites remains 2 to 1 disparity with the unemployment rate so we have a long way to go this is a strong report. and it continues a trend of a much faster comeback in connection with the covid recession than we had with the recession of about a decade and a half ago due to the if you will blow-ups in the financial servicing industry. >> there was a lot of liquidity and tonnage put in the economy by the federal government. >> significant. >> that's helped the economy go where it is. one of the things i think is concerning is wage growth is high it is good never, never look that gift horse in the mouth but it is not as high as inflation. people are still not improving

necessarily the living standard. >> this remains one of the systemic issues in the american economy and that is for too many americans. this is a trend of multiple decades. their wages are not growing as fast as inflation. even though we see wage growth, it is not as fast as inflation it remains the point that it would be helpful if congress would get off its haunch and pass a national $15 minimum wage to create a basic floor. this is long overdue many states have stepped into the breach and passed their own minimum wage laws but the best way is a national standard so that's one public policy measure i think that congress could take to try to create some significant, real meaningful growth in wages to keep pace with inflation

>> mayor, on that note amazon is a highest paying major employer and not insulated them from union pressure that peaks today and amazon to taking a hard tack to fight this maybe hinting that the nlrb tried to rig the rulgts what would your advice be to amazon with the challenge of the labor market >> i think sometimes finding peace with your own workers is better than decades of contention i strongly believe that in a democratic system workers should have a right to organize and the employers can resist and the rules should be fair many times today labor organizing is about benefits working conditions requirements issues, yes wages at the core of

it but a range. businesses, you have very large businesses at&t for example, for the most part had peace with the communication workers many decades. i think amazon is a growing business might be better off to find a way to have peace with their workers. you have got to do what you have to do as a business to resist their right to organize but so far they have been successful in winning or in effect defeating organizing elections but i think workers have the right to try and organize should have the right to speak collectively on their own behalf. >> you are a southern gentleman. we don't get to hear the word haunch often on "power lunch." you are a polite man. >> thank you. >> you got it, man

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welcome back it is time for our three-stock lunch. we are today taking a sip of some international selections. specifically china exposed stocks moving higher today after a volatile couple weeks. let's bring in todd gordon he will give us our verdicts we shall say on these names welcome. we start with wynn upgraded to a buy at citi. it's a 18-month low amid the china lockdowns but saying there's pent-up demand what do you say? >> the wynn stock has not fared well with the spike in covid cases. hong kong up to 70,000 cases a day and has come off data i saw about 7,000 inflation, disposable income is not bad. up 1%. gross revenue in macaw down 56%.

probably locked down for two major holidays coming up and shouldn't open up until may. earnings under pressure. they are expected to make a recovery in '23. analysts look for share. 24 times earnings, not bad if you look at the chart, it's kind of a big old mess we have been in a consolidation. not generating a lot of returns. if the chart can get up through $87, maybe the target could be reached, but i would proceed cautiously here. >> shares are at $80 you would like see them up to $87 before you take a sip, we'll say. >> let's go to jd.com. it's moving higher along with other chinese listed firms why? first bernstein named jd.com a top pick, saying they expect the com company's growth to remain resilient. it's also had positive reports

regarding u.s. audits of chinese firms. what do you think here >> i like jk it's actually the most interesting name on the list here the second largest company behind alibaba they have built their own sort of nationwide fulfillment infrastructure they're doing this last-mile delivery network they're a $100 billion company, reasonably valued, i think 30 times earnings the chinese, the covid numbers we mentioned should be a tailwind for online shopping even though the alibaba chart which looks horrible, absolute destruction there, i think it's going to be hard for them to get market share they have about 570 million users. baba has close to a billion. jd has shown relative strength they're growing top line revenue pretty consistently. they are sort of losing some rate of change with momentum they did grow 23% revenue, alibaba has only grown 10% they run thin margins.

they really try to focus on authentic products to the customer they run only 3%, 4% margebes, trying to cut cost like costco and amazon if the char can get up through 46.5 with support, if we can get up through 48, 50, area, then i think you could maybe nibble on jd >> jd around $59 right now it's come back >> sorry, that's support, kelly. i'm sorry, that's support. we need to get up around $70 i think is the breakout there. >> so i think it's fair to say on these you could be more optimistic if they start performing just a little better than what we have seen from the lows already we'll see if that extents to nio, the ev company. they're hitting a quarterly record they have their suv debuting next month the other major chinese ev firms also seeing some healthy increase in delivery numbers

what about this stock? >> yeah, to your point earlier, chinese stocks have been underperforming the u.s. for such a long time you really want to let the fundamental story sort of be taking you in when you do start to break some resistance neo is, you know, it's a solid brand. it's a luxury car company, but from what i read, chinese customers actually have a little bit of a distrust for domestic automakers they prefer tesla. they are spending a lot outside of china they're doing a lot of r&d, making moves in europe they're gaining some traction in germany, the netherlands, sweden, denmark, so they're getting some room there. they do these six and seven-seaters. so it's had sort of an amazing run in 2020. went from $1 to $60. it's pulled back stock is above $19.50, the downtrend is still in play let it take you into the trade they reported earnings last week supply chain issues like

everyone else. their revenues are growing 50% year over year they're delivering about 25,000 cars a quarter, so certainly a long ways away from ever being able to compete with tesla you know, again, i would just prefer to own tesla. >> a bottle of wine question here are chinese stocks safe? is this where i should be putting some money or is it money that i can literally afford to say bye-bye to >> i'm going to cite jim cramer who i think his headline if i'm quoting him correctly is they're basically uninvestable i love they're opening the books. the s.e.c. is coming in and opening their books to audits. i have very little chinese exposure in our portfolio, and look at the chronic underperformance >> we just wasted four minutes, todd >> unless they become investable >> add least it's -- tyler, at least it's going to be happy

hour just in this kind of market, to generate return, you have to let, again, the technicals and the charts start to pull you into the fundamental story might be coming back, but from my point of view, i haven't touched them in a long time. >> i don't mean to be the skunk at the picnic, but you know what i'm saying thanks >> up next, what happens to new york city's economy if office e sw mhtote dreturn to work thanerig n basire as you think we'll be right back. [sound of helicopter blades] ugh... they found me. ♪ ♪ nice suits, you guys blend right in. the world needs you back. i'm retired greg, you know this. people have their money just sitting around doing nothing... that's bad, they shouldn't do that. they're getting crushed by inflation. well, i feel for them. they're taking financial advice from memes. [baby spits out milk] i'll get my onesies®. ♪ “baby one more time” by britney spears ♪

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new yorkers plan to cut time spent in the office by half. that's according to a new survey which is leading to questions about the future of the city's economy, real estate dom chu has more >> guys, this story resonated with me a lot. because we as a country have been talking so much more about these days the changing paradigms around work and office, at home, full time, hybrid and because two of the cities that are the most impacted are near and dear to me, anyway, i'm a san francisco bay area native, i live in the new york metro area now so here we go. stanford economics professor nicolas blum spoke at a fed event that dressed charting an equitable recovery for all in the wake of the pandemic during the presentation, blum

revealed results he did from a survey that culted and asked roughly about 5,000 workers and w 1,000 companies what they would do, and the survey indicated the average worker in new york city plans to spend about $5800 a year compared to over $12,500 a year pre-pandemic. that's a big change. a lot of what's driving that is that phenomenon you were talking about in metro areas across the country. workers plan to spend a lot less time in the office new york city workers plan to cut their days in the office by 59%, and san francisco, meanwhile, those workers top the nation in terms of wanting reduced days in the office they plan on cutting their office present by about 53%. so new york, san fran, but phoenix, dallas, l.a., washington, it's kind of the same story >> the spending numbers discretionary spend sng. >> yes, how much they would spend going to lunch, a hotdog, whatever it is

this resonated with me because back in november, we did a workforce executive council summit you do a lot of these cnbc events professor blum was actually on the panel i did speaking about how hybrid work is here to stay. >> all right domchu, have a great weekend hit the links, man >> we'll be back here every day next week. thanks for watching "power lunch. >> "closing bell" right now. >> stocks have mostly turned higher here on this first day of the second quarter the most important hour of trading starts now welcome to "closing bell," everyone happy friday i'm sara eisen here's where we stand this hour. s&p 500 looks like it wants to go positive. most of the seconders are stronger in the s&p. real estate leads the charge along with materials, industrials, tech, and financials are lower, and so is the nasdaq the dow is up almost 100 points. about 85 points or so. we're still a little weaker on the week higher for the nasdaq. here are my top takeaways on some of the biggest stories. transports are hit hard, down 4% it's the latest group to signal