today. see you at 5:00. will be great. kinross gold love it. september 6th calls i bought as well. >> do not miss "fast money" tonight at 5:00. mean time, stay tuned. "the exchange" begins right now. >> thank you very much, melissa. hi, everybody. welcome to "the exchange." i'm kelly evans and here's what's ahead markets feeling nervous as the fed get more aggressive tightening vix up, transports down. markets continue sell-off broadly and a wrinkle investors have to digest here to talk more about that, our guest. and mortgage rates hitting all things housing, even lows. down more than 20% talk to the analysts nailed it downgrading them's in late 2021. today is opening day major league baseball and pouring here here, anyway means debut of the mlb games to

apple. will that be a home run or strikeout? first dom chu as stocks head lower. >> no yanksee/red sox here for opening day. postponed by wasn't, you pointed out. rain poured on markets now multi-day losing streak for major indices. dow, s&p 500 and nasdaq. in the red today dow jones industrial's down, not off highs of the session off the lows generally speaking, mixed earlier on s&p 500 4456 down 23 points nasdaq, 13,727 drifting further below that 14,000 mark. down over a percent now. kelly mentioned transportation stocks one big etf, dow jones transportation index, this ticker iyt down 1.75% now. more importantly, if you look at this leg lower this is a seven-day losing streak lost roughly 13% of value in just those six to seven

trading days transportation stock, big focus. some traders and investors looked at this particular industry group possibly a leading indicator for overall economy and markets as well. keep an i on the transportation stocks two stocks on the food processing consumer staples moving in opgz diposite directi. a change conagra, and frozen potatoes and vegetables, upbeat guidance in outlook saying grow above longer-term projections. shares higher. lamb weweston and transportation costs here, food processors and end with one, kelly i know resonates with us both. a gold star. costco up over 68% over the last year sitting a at record high of $604 per share and lows of the

pandemic roughly $262, $270. an idea how far costco has run march same store s.e-store sale much better. buying in bulk like costco, sam's club and walmart something to watch consumer dynamic when comes to inflation. >> glad you highlighted lamb weston, too. amazing crispy fries come out good good product, pricing power. str true on staples side. >> won't know you're eating them not branded that way. >> or eating elsewhere dom, thank you. markets overall acting defe defensively. what about the two year, ten-year yield curve steepening the last several days

as the fed turns much more hawkish. st. louis fed proceed james bullard saying the fed is behind the curve. needs to rein in inflation my next guest agrees joining me with a playbook to weather it. sneed capital management and portfolio manager of the sneed value fund a question theme of this entire hour used car prices dropping people are wondering if we just wait this out a little bit, can inflation normalize? fed doesn't have to be so aggressive don't have to be so alarmed. what does bill sneed say >> first off, you have to believe the progressive commercial most all investors have trained themselves over the last search, eight years believe millennials ar completely different group. that they won't want to get married. they won't want to have kids they won't want to own homes, et cetera so as soon as any difficulty

arises they run to the things that benefit from them being different than in the past, and discard the things that the progressive commercial telling you you should buy. >> okay. i know exactly when commercials you're talking about the only one i like. all turning into our parents fair enough. you could say the most controversial sector pick of yours is housing talk to laura in a moment, downgraded home depot, lowe's and housing stocks in the fall brilliant timing horrible performers. multiples terrible, loan stocks a disaster why do you still like the home builders and continue to believe that housing can perform well in the difficult couple of years to come >> yeah. we have a different job than research analysts, paid by people that try to guess six-month swings we have no ability to guess six-month swings but can look at five to ten years out. let me give you a couple sticks.

there were 236 million people in the united states in 1983. we built 627,000 new homes and they averaged, the mortgage rate 13.25% per year now 334 million people last year built 773,000 homes. and the market share of the five largest builders tripled during that time period, and if you look at the prior 10, 12 years we massively underbuilt homes. talk to any executive of a home builder right now, they'll tell you they can sell every home they build, but supply chain issues and labor kept them away from exploding to the up side, which is going to elongate the next five to ten-year cycle for home builders. if you asked me how will they do next two weeks probably go low per's ask me what do i think will do well

by the way, the most controversial thing we're doing is way overweighted in oil and clobbered the index last quarter, because we're way over weighted in oil. >> i don't think that's controversial. i think -- i think everyone wants to be long energy and long oil, but i think your point about housing gets to a really important point about the economy overall as you see it. if you could dwell on this a moment right now there is more talk about recession than heard in quite some time and only debate seems to be about when the middle of 23next yearbecause of tightening or before? do you actually think or worry we're headed into recession? i can't imagine you'd want to stay long things like housing in that case? >> we looked back at '94 an extremely aggressive fed tightening year. it was kind of a crumb dummy year in the market and it affected things but, remember, kelly i talked to you a lot about this the last couple of years

we are putting to bed a financial euphoria episode that carol charlie munger described wildest in his 75 years in the investment world look, we don't talk much about the 80% in tech, spacs, ipos, that stuff because we focus in on the faangs an old adage in investment business when the generals are marching forward and troops aren't coming with them, guess what bes to the generals eventually? that's where we're heading they're not going to let all of these growth stocks get away with high multiples as interest rates rise and inflation maintains itself. >> right, but you're not worried about the broader economy. if people, a lot of people are coming around to your point of view on inflation, bill, we understand more persistent, now the fed's reacting are you concerned and positions for a broad economic slowdown as

a result >> extremely wealthy people are afraid they're not going to get the game handed to them as they have the last 10, 15 years and people that make $15 an hour that are going to $20 or $25 will do better in the economy. labor is going to win, and real estate and commodities are going to win and price earnings ratios will contract, and if your portfolio isn't organized around that in the next five years you'll suffer stock market failure. >> final quick word. give us a couple examples. for sure i know you're in oxy, like continental d.r. horton. others to be exposed to? >> yes the -- amgen and merck have been trading way below pe multiples compared to the s&p and making a nice curb right now and mall reits are suffering another

collapse of economic competence. there's 90 million millennials replacing 65 million genx-ers. a lot of people to give shopping experiences to. >> and all things people hate and bill smead giving a case for them appreciate it. good to see you today. >> thank you. on that note turn to the bear case. rising rates definitely spoiled the run of the once hot housing play especially home improvements pandemic darlings. lowe's and home depot down 20% is the fix-it boom really over jer names to hold back in october, my next guest, end of stimulus checks and rising material costs would lead to a slowdown and it absolutely has welcome back director of research at a capital group. great to see you, laura. i don't know whether we price in bearishness or are things looking worse on the horizon. thanks for having me, kelly.

a couple things i did not contemplate when i down graded the stocks late last year, as you mentioned. i did not compensate inflation being this tough on necessities. i also was not thinking at that time of this massive swing back into events and travel so we got a bifurcated economy right now where people on the lower end of the income spectrum are so challenged. they're not thinking about big ticket expenditures. folks who have money are thinking about their next vacation, or dressing up to go to weddings again this summer. once again, headed outside of the home so lots of pressures that i wasn't expecting also this mess in ukraine just distracts the consumer big-ticket home purchases typically, the woman of the household is a big decision-maker, and i think she's nervous, not feeling great not having those stimulus checks probably more down side to come

in this group. >> seen similar commentary at rh, a multitude of factors contributing here a hold on home depot and lowe's right now i would have thought if you asked me last year they would have a longer tail wind from the housing boom we bought our house four and a half years ago spent the next couple of years doing home improvement projects. shouldn't we expect that from the cohort that just bought houses and continue to fix them up same demographic bill smead was making for housing in the long run. will that come back to the forefront at some point? >> probably not wrong. i think multiples are contracting. one thing you'll hear home depot and lowe's say over and over again, they're not as well correlated with interest rates, but multiples sure are may not be their fundamentals but you'll see people discounting them at a higher rate than think otherwise would. we think home depot was probably

smart to set conservative guidance when they came into this year. because their business is a little more pro based they have more of a backlog to work off. maybe you get another decent quarter. my guess is that the future tone will not be strong, and that you'll see numbers coming in and multiples contract at the same time which is a pretty messy setup. >> that extends your arguments out. sounds for another three to six months and accelerating on wayfair, another big downgrade similar halo housing and costco, could you put in context struggling of the housing market with what you think is going on with the consumer more broadly? >> sure. costco, half priced sister bj's wholesale club really big inflation beneficiaries. especially this pop in gas prices gets people to the pumps at costco and bj p. i recently did a west coast tour in san diego to seattle, and was

seeing gas prices at costco $1 below where they were at other gas stations that means more memberships bought at costco more consumers trading up into higher tier memberships at costco and very, very, very little churn more people going into the store while there to buy half-priced prime beef compared to what they buy in a grocery store those warehouse clubs, big beneficiaries of inflation not much else in my group is >> yeah. >> costco, bj's a few place that we like. >> costco all-time high today. final question as you hear the macro talks swirling about recession and consumer trends, what do you think is going on, on kind of the top level? just experiencing a shift in services seeing more wall street calls on this today saying simply a shift from goods to travel let's call it. that's a little more optimistic tale than one of a consumer just

in way over their heads on inflation and pulling back more broadly? >> sure. a key part of consumer discretionary i like is fashion footwear steve madden looks great to me ka lair is, owns sam adelman and other fashion brarnds look great to me. a shift in spending. i think a shift in spending to brick and mortar, but also to your point, to leisure and travel, services i think with unemployment this low it's going to be tough for the fed to accidentally push us into a recession. >> hmm. >> that said, i think you don't fight the fed. i think there's more risk in the economy today than there was even three months ago. >> there's steve madden, stocks you mentioned. the snapshot of today's consumer in costco. laura, great to have you back. >> thanks for having me. and coming up, opening day for baseball and a little more than an hour away from the first pitch of the season. we look at the surge in sports

streaming deals lately see who has most on the line. plus the fed set to begin shrinking its balance sheet by nearly $100 million a month. to get there may need to sell mortgage bonds can that spook the market? we'll ask about that "exchange," back after this. >> announcer: this is "exchange." on cnbc. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay.

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welcome back to "the exchange." this season apple is in on the action starting tomorrow catch select friday games exclusively on apple tv plus. not just apple in may peacock the exclusive home of a sunday morning mlb game and amazon a big bet with "thursday night football." disney has plenty of sports streaming exposure through ownership of espn. meanwhile, netflix famously resisted adding sports that stock down 41% year to date apple down 3% meanwhile. but is baseball the right play for apple's first big sports push and a reporter from the "wall street journal" and from the "new york times. welcome to both. the right demographic for apple? what do you think? >> an interesting experiment for them to dip their toe in the

waters of live sports. right? you know, not necessarily a huge national audience for non-playoff games. especially who are, for friday night games. they can go off and try something. see what works try some, perhaps, new tech features in the broadcast and see what happens. >> ed, i mean, same question, which is, is this the right fit for apple's existing audience, or the audience they're trying to grow right now? because baseball itself has faced viewership declines, trying to figure out the tweaks to make baseball itself more watchable and this is a little risk for them, ba you if they don't have a huge audience they have to contend with their diminished popularity? >> i think you hit the nail on the head there this is a bigger rick for the mlb than for apple apple has all the money in the world. tim pointed out, can dip their toes in the water of this. mlb is looking for younger viewers. right? figure getting on streaming is a

way to do that for apple, their audience, it's still growing if's really services business that this would ultimately feed into i thought actually smart this san exclusive deal you can't watch it necessarily on broadcast i think what's interesting is that it's getting harder for sports fans, like me, to find where you can watch. have to watch some on apple, some amazon, some peacock. et says cetera >> read it as a push more than a pull apple, love for you to take this and gish us that younger audience as opposed to apple begging for it >> seems like apple in this case probably has some of the leverage here. got a great audience of iphone users across the world if it's an experiment. you know, the challenge, really, though, in this kind of content creation is that regional sports, this is where this has dominated.

baseball dominated at the regional level local, the number one programming, in local tv, on a friday night, perhaps, but nationally, hard to imagine how the mets/nats game will appeal to everybody on the west coast i'm looking forward to seeing scherzer am i and you saw announcement today of who broadcaster are going to be younger people katie nolan included she has -- quite the following online you know, maybe they're willing to experiment? >> ed, this is as we've said now all major streamers, except for netflix, deepening a move into sports just the beginning isn't it feel as if we should expect a lot moff are this and maybe from netflix itself at some point and did you see sherman's writeup? ufc? i mean, disney looked at them in 2016 and wouldn't be surprised to see somebody making a play here.

>> yeah. i think alex's article is well done ufc, a huge driver for service like espn plus, for example. i think sports or sports-related content is going to be key for all streamers. including netflix. i think netflix, tangentially enter, the space through gaming. the future, how they're branching out, sports they stay away from. it's live. commercials. don't own it outright even if you have exclusive window. all play against the netflix playbook but still such a huge leadership driver that i don't think they can ignore it entirely in the future. >> i don't either. see between that, ad sponsors. big, big moves to contend with still. a couple of years to come. tim, final word, how do we view apple's success? i don't imagine we'll get -- will we get audience streaming numbers or their xrversion of that what does success look like for

apple in the mlb game? >> successful doing more deals see them get into the nfl. talk perhaps therapy in the running for the sunday ticket package. that could be a big get for them so nba in the future lots of speculation there may be interest in that could be very interesting as well. >> ed, deep pockets. these payouts from amazon on the football side of things, what does that tell you >> well, amazon clearly is very committed. starting doing non-exclusive deals on "thursday night football" now exclusive going forward. realizing more than the other streamers that, like, you really spend big in sports to fully own it again, still fractured who owns what piece of the season success for amazon will be, spend more, try to own more football, for example, going into the future? of course, a bigger discussion that contract already sort of signed years ahead you pointed out, nba, others,

something to look at for going forward. >> interesting hard to find harder than ever as a viewer say that thank you both very, very much appreciate it. still ahead, consumers reeling from inflation cathie wood warns raising rates, a serious mistake. up next, the latest why shez into high-growth stocks. and slowly back to normal. new inventories on prices, ev demand and heading to break. demand and heading to break. evenly split between meet jessi. jessica was born to care. slagers. stay with us. your ba oing to be a situation. ♪ ♪ ms. hogan's class? yeah, it's atlantis.

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welcome back, everybody. look, dow and s&p rying to go positive now s&p down tv points dow down 29. at the lows down 305 noticeably happening as interest rates continue to rise s nasdaq down and ten year moved up to around 266 other movers this hour watching shares of hp inc., hitting all-time high and flirting since 2018 after revealing $4 billion stake making it largest shareholder, jpmorgan analysts saying buffett may be trying to repeat success with apple, started buying in 2016 trading ten times earnings hp trading around eight times earnings the chart for apple working out quite well for berkshire the

past years and semiconductor, lower third day in a row every component negative now year to date previously one holdout etf on pace for worst week since early january. marvel, skyworks, biggest laggards dec decline's not huge and now the news update. at this hour, two black former nfl coaches joined a lawsuit alleging racial discrimination during hiring by the league the suit fileed by brian flores, former head coach of the miami dolphins new coaches steve wilk, formerly with arizona cardinals amount ray horton coached with browns and washington commanders. boy scouts able to describe scouting without referring to gender specifically. a judge thrown out a case brought by the girl scouts saying the move was creating confusion among positive recruits and damaging the girl scouts as a result that lawsuit was filed in 2018

a year after the boy scouts said girls could join their troops. in augusta, georgia, tiger woods is back at the masters teed off this morning roughly a year after that bad car crash that could have cost him his leg. he started the day with five straight pars. a birdie and another par not bad. currently tied for tenth at par. on the news tonight, why do have get covid and others don't? a look at natural immunity, tonight at 7:00 eastern. kelly, back to you. >> see you in half an hour they've. still ahead, our next guest watching for one key detail on the fed's balance sheet plans. in yesterday's minutes heard it and that's taking markets by surprise that's next.

welcome back to "the exchange." a slew of fed speeches one day after the fed minutes showed central bank plans t ss to redut balance sheet. but may not be able to hit the figure by passive sell-off

alone. will they sell mortgage bonds? is that spooking the market and will the financial system have capacity to absorb it? joining me chief market strategist at jefferies. great to see you why is this so important, you're not the only one listening to see if sales could be in the future >> early in the year we highlighted this idea to our clients asset sales could become part of the mix. i think last time they weren't, the fed really drifted away from that even though a lot of discussion of it in the early days of q1 and q2 and added $5 trillion worth of securities in two years. the primary method for creating this accommodation and i think it's important to talk about the balance sheet and think about the balance sheet when you're unwinding it, and made it clear after some time might consider it might not do it but considering

it is probably a slight shock to the marketed and why the ten yield went up in the last 24 hours and the curve, got to about minus eight. earlier, you have it in front of you, 20. >> plus 20 yeah a hefty change in 30 bits on the curve. >> is it a sign of success two important things hanned here ian pointed out fed got more hawkish when ten-year break evens 10%. off highs, five year off highs and yield curve steepening that would seem to be early signs of the market now validating finally the fed's hawkishness. is it the balance sheet in particular you think delivered that victory or all measures put together >> first of all i think it's a big -- i find it a mistake to look at these particularly short end break evens. even the ten year itself there's a two, three-year window here now i think is, we know inflation is going to stay and

has been staying quite high. the fed's going to look at five year forward talked about it on the show a bunch of times hasn't really moved in the last 18 months. been 2.25, give or take either way. that credibility, inflation fighting front, much as people want to bash it has not really budged got the surge. know we have a surge whether supply side or demand side remains to the seen but it's there the long term, long end inflation expectations in the new york fed and michigan survey and break easterns people aren' worried about a staying power of infl inflation. we talked about this when we first wrote the note two punch bowls, balance rate and short rate punch bowl. figuring which they're use more and remove punch from the various bowls. got a look wednesday at the idea maybe the balance sheet punch

bowl after some time could become a more interesting place, rather than the short race punch bowl to faketake accommodationsy through asset sales. >> back up balance sheet, take it apart to basically slow nominal demand we're seeing want to do $100 billion of tightening a month about 60 from treasuries 35 from mortgages but ironically because of higher rates people aren't going to prepay mortgages as one did fed may not be able to allow securities to run off and hit the $35 billion number all said, even if they had to sell they'd be starting with fairly small numbers is there a risk these numbers could become too much for dealers to handle? >> you know what's funny just making an announcement you're going to do something and trying a little bit of something and all of a sudden it works it's successful. all of a sudden, you know, that can have a big impact on the

market and if it works say, maybe i can do more. nobody knows didn't try asset sales last nite time, really i think it's just, the market was much more prepared for a balance sheet story than it was -- okay. passive runoff leave it alone focus on rates just like the 2015-16 liftoff period was put into play i mean, here seems a little more nuanced. a different balance sheet unwind i think that's an important distinction from yesterday this is one where we might see the fed come in and sell assets. that opens a door to something new and i think the market is thinking about how to price that a little better. by the way, i don't like to talk about what i think the right or wrong thing, just what the fed would do this is something we thought the fed would do there's a great argument for getting rid of some of these assets faster. we have a really big balance sheet and started pre-covid with

a balance sheet 18% of gdp now at nearly 40% gdp. still way above precovid doesn't make sense a big miss on inflation. >> boil it down to the markets, which you've been, i don't know if i say bearish, certainly cautious waurning the fed put nowhere near where it used to be's because of what's happening with bonds, can't rely on the fed to the edge had, previously you felt comfortable doing when a where are you in the months to come >> near-term very well very well. i think the fed could ing near small recession in 2023 and may actually be a good thing one day a government agency in washington, d.c., forecasts everything five years ahead whether cbo, lmd or fed, will

forecast i don't think anybody forecasted a recession within five years of forecasting or at any point. which is sort of a staged thing again. nevertheless, i would say the risk will increase next year we have a super strong job market a super strong housing market. yes, moving that up a little absolutely right want to bring it down to fight off some inflation, but not this year's worry in terms of markets, kelly, we came out kind of in more of a buy to dip strategy, which was selling covered calls. one of your covered calls ob our s&ps and taking premium, % on ton -- 8% i like getting down the market around 10% and stick with that view that worked out well. calls protecting us when the market went down a lot and paid for some losses and now that trade still looks good with us four months now and a

very different trade for me. no a particularly bullish trade. you're right most time touting upside the upside very limited this year fed's working against you. tt, just a tough mountain to climb and going to be a difficult year to see any kind of material gains in risk assets. >> leave it with that clear yet somewhat discouraging point. thanks for your time coming up, the nasdaq continuing to lead the markets lower. down 3%. just this week the text line pressured cathie woods innovation fund and tells us why the fed is making a mistake raising rates and reveal the fintech name she's selling, teth.

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down more than 3% as rising rates pinched once more hitting ark innovation fund, worst performing equity fund first quarter according to morning star kate rooune sat down -- rooney t down with cathie wood. >> good to see you no matter where the ark etfs are trading cathie wood a celebrity with the bitcoin crowd people lining you behind me before we started that interview. underare performance year to date compared ark to a pub luckily traded venture capital fund a long-term bet and retail droud tends to understand that long-term vision better than some of the institutional investors. part of the pain for the high-growth names like year like ark's actively managed funds had been the fed

higher rates sweet tweeting, central bank is playing with fire and it's a mistake to raise rates a surprise on the down side, and says the fed may be missing some of the micro data. >> looking at consumer sentiment down at levels not seen since '08-09 think about that record breaking employment reports. record breaking. unbelievably good. yet the consumer feels terrible. no one's talking about this. headlines out there from the macro point of view are not picking up those micro signals, nor picking up the consumer sentiment surveys. we're looking at the facts and looking at all of the data. >> reporter: she also argues technology will have a deflationary effect, although might not happen overnight we did get news here at the conference out of cash app from the company formerly known at square. block at this point. the company letting people

invest paychecks directly into bitcoin as well and something called a lightning network allows instant payments. our sixth largest holding. ark notably sold, though, all of its holdings, completely out of paypal, of course, venmo a big competitor to cashout. cathie wood saying paypal might still be a winner at fintech but higher conviction on block in part because of bitcoin. >> i think that the way cashapp is growing organically as opposed to more of a top-down, let's get this thing moving, stretch, stretch, stretch. i think there's an organic movement that will be, fired up now by bitcoin. >> reporter: cathie wood still bullish on bitcoin itself. as well says like those ark etfs, long-term bet. back to you. >> kate, very interesting that she sees now that venmo story.

i mean, look, selling it she's kinds of saying it's over, for one of the biggest believers in these stocks and stories and in this sector that's got to be a tough one to swallow for venmo and paypal >> reporter: yeah. really pointed to the organic growth of cashapp and talked about -- things like the bitcoin conference and the idea people just want to sign up versus paypal having initiative saying, know what? we've got to go, launch this app to compete with cashapp and described it as venmo following cashapp. said, could be one of many winners, but they have a lot more conviction when it comes to what block is doing with cashapp and especially when it comes to bitcoin. yeah, tough news when it comes to paypal. >> kate, thank you kate rooney down in miami for bitcoin miami with the mu crypto bull. still ahead, used car demand dwindling but prices still sky high the latest figuresened a what could bring prices down.

that's next. speaking of which, check out the national average for gasoline prices. $4.15 gallon of regular. about $1.30 higher than a year ago. down 18 cents from the march 11th high of $4.33 we're back in a moment. ntly delivers quality candidates matching your job description. visit indeed.com/hire

welcome back to "the exchange." supply chain challenges are still there for the auto market but there are zblim glimmers of hope for buyers. new data shows new car inventory jumped 9% in march from february now it is till down 62% from last year. prices are still climbing. but for more let's welcome in kevin roberts, director of industry at car gurus. welcome. how big of a deal is this month to month rise in available new cars >> it is great news. after dealing with basically a year straight of declining new vehicle inventory. so absolutely great to see but as you mentioned, there is still a lot of room for growth coming back. and we're still likely going to see continued supply chain issues for the better part of this year. >> you pushed back your normalization view that we need until the fourth quarter of this year, is that right? and what does normal look like

by the way. >> so normal said we're getting back to what we would expect full production to be out of our plan so it looks like the initial thought was second half of this year it was hopeful for the third quarter but it looks like that production might not pick up until the fourth quarter of this year however, while those numbers aren't going to be at the full level, they are expected to continue to increase over that time so hopefully we should be seeing better new vehicle inventory levels for additional months to come. >> so you're focused on the production number to get back to where we were or the market needs to go. let me ask you the million dollar question, whatwill happen with prices will they drop at some point ever, or not >> so, it is going to be a different balance between new and used prices. but, yes, expectations are that prices will come down. now, when that magical date is going to happen keeps being up for debate but hopefully once we get past this traditionally strong demand

season, for new and used vehicles with cash returns, the hope is that we might start to see some vehicle price relief after that time. >> so a year from now? >> no, so in the next couple of months. >> wow >> so we're in that tax high tax return season right now which should lead to trong demand for both new and used vehicles so that demand shouldcomedown and we should see prices decline we're seeing used prices decline as well. so that should hopefully start to make its way through to retail prices shortly. >> i wonder what that will mean for consumers, a lot of whom have to bought cars in the last couple of years that they don't want to see prices drop. not like their trying to flip them, their not houses but i'm saying what impact do you expect that to have and what might have it have on buyer behavior right now? >> it could be a good thing. especially with rising interest rates coming into the mark place. could hopefully offset some of the rising interest rates which

could put upward pressure on monthly payments for consumers and we're not expecting any kind of rapid decline in vehicle prices you know, this demand is still really high for both new and used vehicles so while we may see some softening of prices, it is not going to be a sharp decline. >> what do you think the auto market looks like a year from today? >> it's really kind of an interesting question of how much is vehicle production pick up. new vehicle demand is depressed right now from where it could be if we have full vehicle production and full inventory out on dealer lots so, expectation is that as new vehicle production picks up, we'll see new vehicle sales recover quickly, more quickly than inventory so we're still in a transition period for the next year. >> all right well transition with glimmers of hope for buyers and some signs of normalization kevin, thanks so much. >> thank you, kelly. kevin roberts with car

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welcome back coal prices are climbing as germany signals it would be open to a european ban on russian cool imports pippa stevens is here with the fall out and what it could mean for the u.s. producers. >> not something you would expect to hear in 2022, but coal prices are surging the e.u. depends on russia for 70% of the thermal coal used for power generation and now officials are considering banning imports and this comes as power prices in europe are already at record levels the u.s. could make up some of the difference and that is boosting prices here central appalachia coal is at the highest since 2008

illinois basin coal topping 100 for the time according to s&p global market intelligence these two regions are seeing most increase in price since they have easier access to nt international marks and they are up 30% compared to the prior year according to bray mart now those numbers are expected to be even higher this month large u.s. producers including peabody energy, console and arch resources and alliance resources. but contracts are often long-term meaning these players might not capitalize on high spot prices right now. also important to know, that this is within the broader context of declining coal consumption. >> and does -- again looking at shares of btu, still down from where they were maybe four years ago. is that because of the secular story still looks troubled even with these latest price hikes.

>> coal is on the outs and no one disagrees and some say this is a double-edged sword because the high prices will fuel transition to other fuel sources because nobody wants to pay the high prices. >> true, there is an alternative. there is every passing year more and more pippa, thank you that does it for "the exchange." "power lunch" picks things up right now. and welcome to "power lunch. i'm eamon javers here is what is ahead. a recession may be necessary to get inflation under control. that is the call from bank of america which says that the risk is real, but the fed that will have to hike include growth drops close to zero. and mortgage rates are up and home prices are too. affordability is falling fast. will you be able to afford a house. the ceo of remax tells us if the red hot market is about to take a turn kelly, oveto