care products. >> pete? >> walgreens >> thank you and joe? >> merck. >> disney earnings after the bell tom lee is with us looking very much forward to that we'll see you then hi, everybody. welcome to "the exchange." we were trying to stitch together a rebound here but looking at a nasdaq down 1.7%. tesla at 760 microsoft below 270. tesla at, i'm sorry, you know, i won't stay numbers right now save that for the expert over there. dom chu. tesla, apple, and microsoft below key levels and then apple below like you heard from scott after the high inflation report. our next guest warns inflation is broadening and the fed will have to do more tightening than the market expects next year we'll tell you at what point he would be willing to own treasury

bonds and it's not here. the not so stable coins not helping right now. supposed to be pegged the dollar, now worth 30 cents could it pull the rug out from the whole crypto complex we'll try to get some answers and disney reports after the bell, get you ready for that report plus beyond meat and rivian coming up in earnings exchange but first, let's start with dom chu on all the key levels. >> i mean, seriously, kelly, all those headlines you just read off right now don't do anything for taking off risk and this risk aversion trade is continuing to play out right now. dow industrials, s&p 500 and the nasdaq kcomposite all in the red right now. lows, and mentioned the index down 211 points. 11,525 is the level you're looking at we are still below 4,000 on the s&p 500 down another 25 handles.

39.75 off the last trade then and dhow industrials down 1.25%. the outperformer and it has been pretty much all day long with regard to the thematic trade kelly pointed out earlier, below key areas traders are watching for many of the mega cap technology and tech related names. apple below $150 $149.82 the last trade there off 3% microsoft is down 2.5% 262 and change there alphabet outperforming down one-third of 1% and then meta platforms, parent company of facebook, 190 down 3.75% the tech sell-off continues and there's also, with regard to the microeconomic, more company specific stories out there check out what's happening in regard to video game publishing and kind of the overall theme for the meta verse and virtual platforms and software platforms going forward. electronic arts, best performing stock in the s&p 500 up 10%

right now even though it disappointed on some of its earnings results meanwhile, unity software, lower than expected revenues down 35%. $31.27 meanwhile, roblox disappointing aspects but up off session highs and a lot of interesting movements happening with regard to some of these growth oriented names. we'll see how traders play that out towards the closing bell, kell send it back over. >> thank you very much stocks rallying and then giving up gains after the cpi report and inflation jumped 8.3% in april on anna e annual basis. less than the march increase first slowdown in eight months and raised hopes that inflation has peaked but my next guest said don't buy it. we face broad-based inflation and the fed has a big problem now. michael schumaker head of wealth strategy at wells fargo. great to have you back and listen, the core cpi up 0.6 on the month. that's not the kind of ratings

we want to see. >> a pretty grim number and metro is a huge problem. whether you look at food, energy, or in the core services up 0.7%, the fed has talked about this really being a goods inflation for a while, supply chain but it's not just that, it's much more broad-based, really challenging for the fed right now. >> what tells you that this is broad-based in response to those who go, yeah, it was just air fares, they jumped, that's the whole story? >> it's funny. we've heard a number of these stories. airfare, and then cars the bad actor seems to change month by month and if you look at the breakdown, most categories up quite a bit. whether it's services, whether it's food, energy, airfares, any number of things, it seems like they're all pointing in one direction, up. and i think the big takeaway too goes back to some of the comments from the fed meeting last week. you've got to focus on the labor market labor market is incredibly tight and tends to embed the inflation expectations which drives prices up across the board.

super tough time for the fed and really, globally for policy makers. >> it's not that you're quibbling with what the market thinks the fed will do this year it's now 2023. we're almost halfway through so it's time to start talking about what's on the horizon and you think there's going to have to be a lot more tightening next year >> it's interesting, kelly so we've got record high inflation, at least in the last 30 to 40 years we're talking about it being good news and it's only 8.3% over the last year and the market saying, hey, wait a minute, we think the fed has got this it will be mostly done this year only maybe two interest rate hikes next year. that seems really farfetched we don't buy it. >> let me follow up on that and mentioned off the top. there's a level at which you'd be more interested in sort of buying treasury bonds or bonds broadly speaking but we're not here yet you say you want to see the market pricing in close tore a 4% fed funds rate than 3% as the end point for fed rate hikes, is that right and once they price that in, then you feel more comfortable >> that's definitely right, kelly.

so from our perspective, just to give the viewers some context, the market currently is pricing maybe 320, 325 for the end of the cycle, something like that, to be reached in the mid of '23. we think that's way too low. tack on an extra basis points and then we'd say bonds have really taken out perhaps it's time to get in but until the market prices that sort of level out of the fed, we think there's just not enough cushion built in not enough protection against inflation, so i would steer clear. yeah, the level is sort of in sight but not there just yet. >> that's the perfect segue to what we just heard was a poor ten year auction thank you so much for your time. leave it there mike schumaker with wells fargo. rick, what do you got for us >> well, first of all, it's $36 billion and it is 10 years the grade not good i gave it a d plus dog plus and the reason is pricing. yield at this auction was

2.943% of course, we're hoping for 3% coupon, but the point is that the one issued market was training right around 2.929. it had a 1.5 basis point tail and that's where the big demerits came from on the grade. covered roughly in line with 10 auction average and roughly in line on indirects. rather lofty 10 option average the best with regard to metrics was the direct at 18.2%. that was the best since june of '21. take 11.5% below the 10 option average so the metrics were pretty good but the pricing really did hurt and it does underscore that this is a 2 for auction if you have direct loans, student loans by the federal government, this is the may auction on 10 years that helps pick your rate and the rate will be basically the 2.943 plus premium of a little over 200 basis points

so if you have a student loan, look for around 5% to be your cost kelly, back to you >> rick, we saw the 10 year go back above 3% after the cpi report but we're still off of, what, 320? the highs for the week just kind of give us a feel for where and how you think investors are positioned right now. >> you know, i think that interest rates are real tough on the long end because all the masking that's ghosn on with respect to the central bank hiding very good signals for us to try to draw a conclusion by all the quantitative easing they d did and it will as they start to put for mortgage security, eventually, but i would look at it like the high yield we get in the markets may not be the actual high yield that we see once the fed gets further through on this tightening cycle and today, even though inflation numbers were hot, there's very little doubt somewhere near the top. i never thought that would be an

issue. the issue is whether we're close to the top of inflation, the issue is how sticky it's going to be and what's going to remain at much higher levels than pre-covid inflation areas in the economy and i think if you had to keep this real simple, 3.23, 3.24%, some double tops in the past intraday high, i would look to that whole zone there to remain very good. resistance yield-wise and i think that could definitely be an area that's going to be very difficult to get through over the next several weeks >> all right as we're just below 3% this afternoon as we digest a rather poor auction rick, thank you very much. rick santelli. markets now. nasdaq at session lows down 2% right now. below 11,500 i should mention especially the pressure across the crypto space on stocks like coinbase and we'll have more on that in a moment the s&p down 0.75% and the dow is only down 127 points right now and here's this for a buy

signal investors hate the market. said bullish sentiment at the lowest levels since 2017 and goldman's equity indicator at 2011 lows and bernstein's sentiment gauge extremely pessimistic levels on that note, bring in chris, the chief strategist and capitulation putting in a bottom, do you have to make that call here? >> well, kelly, it's nice to be with you again i wouldn't make the at the bottom call yet but i do think we can see it from here. so your last guess from wells fargo said that rates will probably go up further than we think. i think the market is digesting that now of course, the market looks six months ahead and if we picture ourselves six months from now, i think inflation will be lower, commodity prices, for example, oil peaked in march. i think things will be in a much better place and the pessimism that we feel now won't be nearly

as pervasive so i would think that without a recession, equities have a decent chance of being an okay investment class for the next six months. >> you look at names like alphabet and visa in particular and that may not sound too provocative to people but more interestingly, you're saying you would even fade the energy trade here, is that right? >> i would you know, i think energy was yesterday's hot groove i mean, historically, if you buy into energy stocks with commodity prices near a record, your returns aren't that great so i would bet good money that from here, you pick your favorite nenergy stock and i'll pick google and a year from now, bet i'll have done better than you because one is valued much more cheaply and a better chance of making numbers and the other may suffer if the economy slows. >> you know, that's like our stock draft. most of the names that were chosen were a lot of the fallen tech angels and that sort of realm. is there anything there that you would be nibbling on or do you

think that's a permanent valuation reset that's just occurred >> i think tough on discriminating i think i like google, for example, because it's only 15 times next year's numbers, cheaper than the market. it's really hard to find out a high class company with no debt that's growing so fast, cheaper than the market. so look around and pick. i still think that teslas and some of the others are simply too expensive and need more and boy, inflation will do that for you and now there's other names. this isn't everything going down in the future. this is more pick and choose and don't be afraid to put some cash to work. >> we got to get you and one of the energy guys to actually put, make this agentleman's bet of some kind or maybe do it for a living why bother leave it there or a busy day thank you for joining us. >> thank you, kelly, nice to be with you. >> with management tyler mathisen with the story. >> there is a new federal

reserve president at the dallas fed. her name is lori logan she's been named president and ceo of the dallas fed to begin in august in that role she replaces robert kaplan who retired a year earlier than planned following some controversy regarding a stock market trading as i mentioned, she'll take over on august 22 she's a long time fed veteran. mostly out of the new york office where she's been in charge, the manager of system open market accounts for the fed which basically means that she oversees the fed's $9 trillion portfolio of securities and leads the implementation of monetary policy as directed by the fed. she will join the fed's open market committee as the representative of the dallas federal reserve bank that covers texas, louisiana, parts of louisiana, and southern new mexico so new fed, president at the dallas bank and it is lorie k.

logan. >> thank you, tyler mathisen. coming up, is crypto a house of cards built on stable coins we'll probe the problems with one in particular this week as their backers are left scrambling for capital. disney the worst down stock over the last 12 months. beyond meat on pace for losses and rivian down 79% since january. will their earnings turn things around the action and trade for all of these names ahead on "the exchange."

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welcome back to "the exchange." remember the great financial crisis at its climax since september 2008, the reserve primary money market mutual fund broke the buck that triggered a fresh wave of panic that peaked days later with the collapse of lehman and the bailout of aig is something similar now happening in crypto? the stable coin terrausd plunged low as 26 cents this morning how did it happen and where do we go from here? kate rooney is here to explain. >> not every day we talk about a big move in stable coin as the name suggests. these are supposed to be stable and pegged to the price of a dollar but today the terra usd stable coin down to a low of 23

cents. investors are comparing this to a run at the bank. people lose confidence and in a lot of cases, heading for the door much like the stable coin i mentioned, the platforms lue nah token crashing overnight with a 90% decline. it wiped roughly $22 billion from its market cap in just a week and the free fall has to do with the company behind this luna foundation doing all it can to restore confidence and try to bring that stable coin back to its dollar value co-founder joe quan, active on twitter lately, announced it would be minting four times the usual number of these stable coins all in hopes of stabilizing the prices and this whole project was supposed to be decentralized meaning it's not tied to the traditional financial system, it's not backed by dollars or short-term debt it's backed by other crypto currencies like bitcoin and unraveling in the past week or so, a big hit to sentiment and the broader crypto markets investors i'm talking to say this is arguably the biggest

black eye yet for the industry it shows, for one, they can't self-police, at least in this case, it will result most likely in more regulation, especially from treasury, which was already laser focused on stable coins. it's bad for the other u.s. based issues of stable coins, circle, companies like paxos here in the u.s. and billions of losses out there not just retail investors. it's hedge funds, some of the more well known institutional investors and what sometimes we call the smart money here, but a lot of people losing a lot of money on this trade. kelly? >> kate, thank you very much kate rooney. terra coin is not the only stable under pressure now. what is the latest usdc, tether, i mean, how do these pegs look >> that's a great question we did see a big of depegging in tether but i talked with the team, kelly, and it seems like

that they're managing. i heard there is pressure to get out of stable coins right now because they are worried about the risk the risk sort of illustrated in ust, which really can't be understated, right, this event is probably, and i tweeted this last night, the most destructive wealth event in the history of crypto with probably $50 billion wiped out. it's not surprising that investors are worried about tether and other stable coins at the moment >> and from there, bitcoin, i mean, look at shares of coinbase last check down 27%. so the entire eco-system at what kind of risk to the stable coin issue? >> well, with coinbase, they have their own sort of specific issues, the street is really concerned about fee compression and lack of volatility in the market so they probably would be suffering or under some degree

of pressure even without the ust debacle but in terms of the broader stable coin market, i talked to tether and they said they basically have a ton of u.s. treasury short-term so it would be pretty easy for them to honor several billion dollars worth of redemption. ust is not in a similar boat right now. i mean, they're kind of struggling to get different whales in the market to do a capital infusion topping at least according to our reporting, a billion dollars but at this point with ust down as much as it is and luna, the native token of terra, it's looking a bit bleak, but that isn't to say that it could happen it's just a question of when it might happen >> it was widely anticipated as well i mean, last summer, we spoke with gary gordon of yale who had done that research on runs in the primary money market and talked to kaitlin long who hated

the leverage building up in the system and an unhealthy sign to mimic the bad behaviors from the traditional financial system in 2008 be that as it may, it didn't change anything. if anything, these coins only became more popular. where do we go from here >> well, listen, what do they say when the music is playing, you've got to dance and that's exactly what has been happening over the past month with the folks pouring in to anchor to get those juicy 20% yields, but once it sort of became apparent that basically, there was a lot of risk here, people kind of ran for the exits as kate alluded to, where we go from here, definitely a black eye on algorithmic stable coins it will be really tough for them to instill trust in the system, at least for luna specifically and the broader terra eco-system but right now, traders, kind of derisking and rotating into

bitcoin and ether is a bit of a bid, bitcoin not down that much and even though a lot of funds have been caught flat footed, a lot of less crypto native funds aren't really that exposed to luna >> sure. >> it's a large market cap coin but out there on the long tail relative to the two major blue chips, if you will, and i think that there will still be demand for bitcoin and ether, irrespective of what's going on with luna. >> and there's the price action. bitcoin is off the loans today back with us 30,000 and hanging on amid all of the deep sell-offs. frank, thanks for now. we appreciate it we'll let you go now frank chappara with the block. beyond meat, add in the net short interest of 38%. that's an equation for some big moves. we've got a preview and the trade ahead. beyond shares down 12% today as we head to break, take a

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welcome back we've seen a 500 point swing on the dow today from up 423 to down 164 a moment ago. down 100 right now s&p's down 27 and nasdaq down 221. by far the worst performer energy, utilities, materials, those are outperforming today while technology and consumer discretionary are in the red and choppy trading for kohl's after shareholders voted to reelect the current slate of board of directors. this despite mounting pressure

from mccal lululum. they received several preliminary buyout offers. macellum said it was a vote for the sale of the business and they aren't going away tyler mathisen for the update. >> more than 500 native american children died at 19 boarding schools. they were forced to attend by the federal government that number is expected to grow. the report also details brutal treatment of children at more than 400 schools that operated between 1819 and 1969. it is the first step of a review ordered by secretary deb holland. the first native american to serve in the cabinet, by the way. after unmarked graves of children were discovered at similar schools in canada. supreme court has rejected last minute attempt to block arizona from carrying out first execution in nearly eight years.

66-year-old clarence dixon scheduled to die by lethal injection for the 1978 murder of a college student. and a passenger with absolutely no flying experience landed a single engine plane after the pilot was incapacitated by a medical emergency. the new pilot was guided in by air traffic controllers who said the passenger did a great job bringing the plane in for what was described as a perfect landing. tonight on the news with shep smith, a major crackdown on a casino with ties to russia that was operating in the meta verse. kelly? >> that plane landing, can they run the ed tyler, thank you very much disney, beyond meat and rivian on deck with results and the inflation is a factor for all three. what else investors are watching in earnings exchange right after this [sfx: street ambience] ♪ ["fly me to the moon"] ♪

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what's it like having xfinity internet? it's beyond gig-speed fast. and it can connect hundreds of devices at once. that's powerful. unbeatable internet from xfinity. made to do anything so you can do anything. a moment ago, new sessions low, 160 points. even though it's a modest decline, selling pressure picking up throughout the afternoon with the nasdaq leading the way lower down just shy of 2%. let's turn now to some earnings names.

we are expecting this week we have disney on tap among a few others just today and let's find out more about the action, the story and the trade in today's edition of earnings exchange starting with disney which is down 1.2% today and down 40% from the highs it's the worst performing stock this year, right behind boeing streaming slowdown, parks revenue. a big fight with florida, all things to watch this afternoon julia boorstin with us and danielle shay. julia, kick things off for us. >> kelly, i think one of the most interesting things to see is what disney says about its streaming business and of course, disney is the last of the media giants to report netflix was the first, and netflix warned of a major slowdown in streaming subs subsc subscribers. disney has a different strategy. they're still expanding globally their market less saturated and i think the number to watch is 5 million. that's how many streaming

subscribers for disney plus they expect to add but commentary about what things look like in terms of that subscriber momentum for the rest of the year will be really interesting and then the other big question is, of course, the theme parks and what they tell us about the strength of the consumer, bookings for summer, consumer spending at the parks. are those disney parks visitors feeling impacted by inflation and all of this macro economic uncertainty, kelly >> let's get right to the point here with danielle shay. would you be a buyer of disney what do you think about? what does disney need to do? i think i kind of know where to go with this one >> you know, kelly, even the strongest stocks in the market have fallen on earnings after earnings report. no way to buy disney here. one of the weakest stocks. yes, it has fallen so far and i wouldn't be surprised if it traded higher here just because it's gotten beaten down so bad but you know what? it's in a down trend

there's all kinds of head winds. i don't think people are going to be rushing to go to disney when they can't afford gas and food so i personally would rather short it up at 120 if we got a rally. if we got down to the 2020 lows around 87 and stopped falling, that's where i would pick up shares. >> we're around 106 right now, sort of stuck in the muck right now, if you will julia, you know, in a way, they are dealing with forces beyond their control in the macro environment. and then you add kind of this political fight with florida, which i'm not sure, nearer term concern for shareholders so what can the company do or say here in order to, you know, pull off a renaissance like we saw when they first tried to sort of move from an espn model to a streaming one and got the stock to start working again >> well, there are so many questions in there, kelly, but i think you're right i think analysts are saying that this fight with florida over the

tax exempt status of the area that disney world is in is not going to really have a meaningful near term impact. not something to worry about from a financial standpoint but the transition to streaming, one thing that's really interesting is the addition of an ad-supported disney plus model so far, subscription only, no ads and now as we see cash strapped consumers maybe reconsider how many of the services they want to pay for, it seems like having that lower cost option could be really beneficial for disney. i think there will be some questions about when exactly that will launch of course, we know that netflix is working on something as well. so i think that's going to be part of the conversation how disney is using some of the lower cost options to help draw more subscribers, to helping more resilient regardless of what's happening in the economy. >> maybe just say free cash flow you want it, we got it, got it right now. julia, we'll leave it there. our julia boorstin beyond meat trading near

all-time low price company not expected to report a profit and the fact the stock carries a short interest, kate rogers with more for us. what are you watching tonight, kate >> had a rough six months over 70%. 2021 really challenging and ethan brown said they've got increased competition in the retail space the food store segment that will be very curious to hear what he has to say about that tonight the retro business fared somewhat better. both really important segments to watch because beyond has increased its chicken offerings in particular in more locations in grocery and also, remember, launched pepsi plant-based market and trying out new locations for sales like drugstores and convenience stores to be a ast-minut purchase to run out of one of those places to see if that moves the needle at all and a huge year for partnerships and we saw the stock flying up and down on the false headlines that mcdonald's was permanently adding the mcplant to the menu

and really investors are looking for good news to hang on to with this name. >> are you part of the short interest and are you worried about a short squeeze because the headline like what kate mentioned can pop the stock. >> oh, absolutely. and i'm really glad you pointed out the short interest because that's something investors do have to be really careful about. i've been shorting beyond meat all year i was short when it rallied but it faded quickly and i'm short right now as well. i do hope that i'm not caught on the wrong side of a short squeeze here and that absolutely can happen, but what i tell my traders personally is that the number one thing you have to do is control your risk you know, i am a little bit more of an aggressive options trader. selling premiums and some credit spreads. if there is positive news, it may rally but honestly, pretty much everything that has rallied on earnings has come right back down just look at the way lemonade was up 10% and now it's down 10%

today. do it carefully, but i think it's still going lower >> all right, sort of our theme here is sort of danielle is being somewhat bearish, more bearish and wait until the next one, really bearish. leave beyond meat for now. thank you very much, kate, with the shares down 14% on the session and results looming after the bell same for rivian. stocks at an all time low, currently around 20. forbes sold a big part of the stake, the company worth less than $20 billion after an ipo above $100 billion dom chu has more of the story for us i'm sure it must be what, about borders this afternoon >> about all kinds of outlooks, right, that's what it's about. so i mean, you talk about rivian, only been in existence as a public company for two prior earnings reports and after ee each of those reports, by the way, shares volatile to the downside down by nearly 8% after the lowest recent quarter and then down by 10% after the first

report post-ipo. when i tell you that the expectations are for a massive move today, i really mean it the options market is pricing in approximate 21% move in the stock up or down on the heels of earnings after the market closed tonight with regard to those headline metrics wall street is expecting a loss of $1.44 a share revenue up $130 million but those metrics may not get the most attention to your point, kelly, production guidance could be key here you may recall that after last, its last report, rivian lowered production guidance down to 2022 from a prior estimate of 50,000, so do they stick to the guidance, especially in light of the ongoing global supply chain issues we've been reporting extensively on those key choke points and components like computer chips, other parts, what will rivian say about the global supply chain and challenges, are those getting better, when could they get better and how are the costs being managed around it and by

the way, all the stuff speaking of costs, how much cash is going through? those are all key, at least metrics that investors will watch, kell. >> i'm going to steal a little bit from your answer here in order to ask you the next question, so you say you literally are going to short this to the ground you think this company, you sa you get a lot of backlash wheny that's how bearish you are on it what about the prospect that somebody could come in for the technology, for what they have done so far for the order. a time that private equity is sniffing around the tech eco-system as we understand it, if rivian's outlook in your opinion is that bleak, could they have a suitor come in here? >> you know, they definitely could, but i mean, i'm looking at ford and amazon both. mine, look at what happened to amazon on earnings and a big part of that reason was because of their investment in rivian. i mean, how much longer are they going to stay in the game and then you look at ford which is already starting to offload

shares you have the lock-up this week you have massive selling that's coming in, which tells me that even the early investors want to get out and i don't think saudi arabia is going to bail on this one yet but i think the runway is very long for them and i question seriously who is going to want to invest at this point based on what's already happened to their previous investors. >> so short and staying short. we'll leave it there danielle, thank you again for your time today. dom chu, we always appreciate it and see you very soon. coming up, sticker shock in the skies. one of the most staggering numbers in today's cpi report was airline fares which posted the largest increase since the series inception any signs that travel inflation could be coming back down to earth? plus, mortgage makeover. rates on the rise. making a comeback and refinancing plunging we'll dive into it all "the exchange" back in two with stocks of session lows, don't go anywhere

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welcome back another nugget from today's cpi report was airfares. not only are they not cooling off. as americans are learning, they are soaring and it's not just airfares seema mody is here with all the details. seema? >> that's right, kelly among the largest contributors to consumer prices, the index for airline fares sharply increasing by 18.6% in april that is the largest one month increase since the inception of this cpi report in 1963. that according to bls. the cost to check into a hotel continues to rise, hilton revealing average daily rates, 36% higher than the same period a year ago the big hotel chains, remember, are incentivized to keep prices high, pent up demand, wage inflation among reasons. for reference, the most expensive hotel markets today,

maui, daily rates just surpassed $600 a night, florida keys in the $500 range that according to sdr. this summer, analysts expect a big rebound in city travel vegas, orlando, high on the list and starting to hit travelers. a new survey from trip adviser found 74% of americans surveyed are extremely concerned about rising costs that's higher than citizens in other countries like japan, australia, but nearly 85% travel remains a top priority despite rising costs because of the pandemic and being away from family for such a long time. kelly? >> it's like the report highlights its own instability we have reports about how americans are going to pull back because of inflation, while at the same time, it's spending on some of these services that's fueling it so i don't know which happens first. >> exactly hilton ceo said that was an interesting comment on the call last week is that they're watching these prices minute by minute to make tweaks. if they start to see the consumer pull back these prices can certainly change if you see bookings

impacted in a substantial way. also point out home rentals, kelly, if you are looking for alternative on average, a cheaper daily rate than hotels at this point, but of course, perspective here is that prices really soared during the pandemic when people pivoted to airbnbs and worked from home so that's one thing to keep into account as we watch travel trends. >> absolutely, thank you very much still ahead, mortgage rates rise, so is demand for riskier loan products like adjustable rate mortgages those preside those applications hitting a 14 year high. en tjoins us next withhe trds he's seeing and implications for the housing market to freeze your pain and your doubt. heat makes it last. so you'll never sit this one out. new icy hot pro with 2 max-strength pain relievers. ♪ ♪ wow, we're crunching tons of polygons here!

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welcome back it's no surprise the housing market has been rattled by the huge spike in mortgage rates the past few months. mortgage applications are now 8% year on year as the 30 year fixed rate jumps to over 5.5%. arms loans often considered riskier. how are they holding up? let's ask the ceo of mortgage, but the origination for the first quarter down and stock down 1.5% and 40% this year. matt ishbia chairman and ceo of

uwmc all right, matt, where do we go from here? now, no one can sell a house where do you go? a 5.5% mortgage at an al we're seeing so much purchase activity the housing market is still hot. there's not a huge amount of inventory so people are buying houses we had a record first quarter purchase market. we think the second quarter is even better. purchases are happening, and refinances are falling off because of interest rates. >> i will say anecdotally i will see a for sale sign and they're under contract within days right now at least it is amazing. for those, you can call some younger buyers who were hoping prices correct substantially here and that bidding wars go away what would you tell them >> yeah. well, i think the key is there are less houses out there. a year ago there were over a

million houses listed for sale and it's changed a lot however, there are still great houses out there and opportunity is still there, and people are looking and people are moving. you just have to find the right opportunity and i think it will cool off after the third quarter and the next four or five months and it will be a competitive housing market even with interest rates going up and we're excited to keep that momentum going >> so can you give us a sense, how lucrative are refis for you guys if refis are gonzo, what else can you do to pivot the business model >> it is our business and we're the largest purchase lender in the country and two years consecutive, and we're doing great on purchase and we don't have to pivot much a lot of my competitors had to pivot and refinance and the people who dropped their rates and that's not what we're about. our company, we had a great first quarter earnings and we're very confident what we're doing and growing our market share purchases is a different market than refis

companies that only do refinances are 70, 80, 90% of businesses and a lot of those companies are laying people off and we're not doing that and we're still hiring people and winning and growing our market share and it's a different market right now we're having a lot of success and we're excited for this year to separate us from the rest >> can you do anything product innovation wise? we talked about arms and i continued to hear about speculation about whether there could be a 40-year mortgage and how could people get into a home more affordably. did you have to stay conventional or are there emerging opportunities >> there are opportunities on the product side and the key thing is educating consumers, right? because people think i need 10%, 20% down on the home and you can have 5% down programs and you have to find a mortgage broker and find a local person in your market that can educate you. is it an arm fixed is it 5% down or 20% down? it's the biggest purchase of your life.

you have to make sure you get it right and that's why the key is getting educated and it's not a do it yourself product and you have find experts to help you. >> final question, and this will sound like a strange thing and as a mortgage market participant, but what would you like the fed to see here rates will go up and rates will go down. you might feel confident that mortgage brokers are not the best place for consumers uwm, we're winning we had a great first quarter and we'll continue to win. i can't control our actions after that and we'll keep winning every day. >> all right matt, thank you very much. good to have you here today. >> thank you >> matt, the ceo of united wholesale mortgage coming up, covid cases rising again in some parts of the country and the latest numbers and where we're seeing the biggest increases next as we go, markets are hovering around session lows and bitcoin is just above $30,000 as we watch whether it will pierce again once again to the dunown

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welcome back covid cases on the rise in the country including the northeast. meg tirrell with the very latest meg? >> covid cases and hospitalizations are on the rise nationally now cases more than 70,000 being reported every day, hosp hospitalizations have been rising week over week, still very close to pandemic lows in terms of the levels of hospitalizations deaths have ticked up just slightly, but are essentially flat still more than 300 americans dying every day from covid, but generally, kelly, what we hear from health officials in this wave is the level offy isser have disease relative to the number of cases is lower you're not seeing as many people being sent to the hospital or dying from covid as you might have expected in previous waves probably because of all of the

immunity that's out there. one thing that is really driving things is this new sub variant known as ba.2.12.1 is estimated to be more transmissible than ba.2 and you can see the prevalence of this new variant nationally it's rising 43% across the country and it's not evenly distributed it is most prevalent in the northeast. two-thirds of cases in the new york region are now this variant, but it is starting to rise essentially everywhere. and so there are concerns that as we have seen cases so high in the northeast, that is a more vaccinated and more boosted area as this starts to move across the country, will we start to see higher levels of severe disease in areas that don't have so much ishmmune protection beig built up. >> is anyone reacting to this though >> in terms of implementing mask mandates and things like that? we haven't seen a lot of that.

there is speculation it could potentially come back. we saw philly do it and then lift it when things started to the go in the right direction so we haven't heard a lot yet >> if we go back to the worst that was pre-vaccine when the health system was at risk of overcrowding, but is there a concern about a risk like that emmating again >> yeah. absolutely i think people are very focused on what's happening with the health care system and right now the metrics do look a lot better than they have in the past and so you're not seeing the urgency of local governments moving even though local governments would suggest to think about things like implementing mask mandates and things like that it seems like the political will isn't there and if we do see severe disease that can prompt action >> thank you, meg tirrell. covid is one of the variables economistses are watching as we head into the back half of the year we'll look at the other risks

with missu host on "power lunch" which begins right now >> indeed it does, kelly welcome, everybody to "power lunch. i'm tyler matheson stocks give up their gains and volatility picks up after another hot inflation report a longtime market watcher says the s&p won't -- won't go much lower from here. so should you stay defensive and what position may be more for growth plus coin-based cracking the stock plummeting, revenue shrinking, users declining we have a lot of ings there and analysts are cutting their priss targets and we'll talk to one who says coinbase, kelly, can weather this storm. >> all right tyler, thank you very much we see selling pressure picking up this afternoon. the dow had been up 423 point, but now we're down more than 260 for an 0.8% drop and the s&p was down