friday is? super bowl >> i'm glad you brought up unp he brought it up to me on twitter. we had the big conversation about the school of investing. you want to know where bottoms are formed, it's from stocks with negbative news. they either go flat or sfinish up on the day. thanks everybody i'll see you in a few hours in overtime "the exchange" is now. thanks, scott. welcome to "the-exchange." in for kelly evans retail wrecked again target has too much inventory, forcing 2 to cut prices. but is this just a target thing? how much is is an industry-wide issue? congress and crypto. a bipartisan bill introduced 250d what does it say what will it actually do

we will have some answers. and we're taking a close look at consumer spending. campbell's soup, the story and the trade on each one. but we begin, of course, with the markets. dom chu with the numbers >> we started off negatively, so to speak at one point in the day, the dow was down 274 points. so, we've gotten back quite a bit in term oz of the over alttrade so far. even at 274, wasn't a massive decline but a lot of it had to do with news we'll talk about in a bit. up 1/10th of a percent similar for the nasdaq composite. they're up 19 points on the day. retail has to be the big theme target in the blockbuster, royaling announcement saying they're going to take near term profit margin and hits to set themselves up for possibly more

success down the line during the all-ir important holiday shopping season. we've got back a lot of what we lost in the early morning session. we're only down 3% walmart 122. spot 10, down 2% 2% losses for best buy, lowe's, you can see the theme. taking a hit from theering tat announcement and the spdr ticker is down one-tenth of a percent and almost synonymous with american oil and impasse we're talking exon, oil. the definition of the oil majors the stock is up 4% a very strong move the reason it's important is because at these levels, 1 with $02 a share, you have to go back to july of 2014 to get to the same level you're seeing right now with exxon mobile.

at this stage, a huge upside mover. no surprise oil and gas prices are on the rise. and given the move in exxon mobile, may be timely to see exxon mobile at a cross roads, 8:00 p.m. june twektd right here on cnbc. >> takes a lot more money to drive to the cross roads and once you're there, you have to make a decision. let's kick it off with retail target sending a warning across the industry as it says it will take a hit to profit as it cancels order and marks down unwanted merchandise brian cornell telling cnbc we thought it was prudent to be decisive, act quickly, get out in front of this address and optimize inventory in the second quarter. they added the current inventory was 33% higher than a year ago totaling more than $15 billion

joining us is international whole sale distribution company that provides products to macy's, amazon resalers and more what to make of this, really i have a friend in the business of home goods, supplying bed, bath and beyond and others and was was talking about inventory piling up and have issing to question what to do with that, having to do with the spending slowdown and misjudgment about what was going to sell through. it feels like this isn't just a targetithsue what's your case >> thanks for having me back you should totally connect me with your friend this is a bit of a whiplash supply chain that targeted dealing with it. it's too much too late people stop doing services, traveling and we're spending a ton of money on consumer goods big box retail became too reactionary and they tartd buying what happened as the world

reopened, sports reopened, travel started again consumerism dried up and consumption of goods hit a cliff quicker and faster than we thought it would and retailers are feeling the effects and whiplash now how much can we trust this if they didn't see it coming? i have a feeling they're spending now because it's summer but the cost of borrowing against your home equity is higher how is that going to turn out? you think the retailers know >> you could use that argument for every season, right? come august, september, consumerism is going to be back to school. and of course into the holiday season, which is q 4 is the holy

grail or super bowl. i think it's an interesting opportunity for consumers. you have warehouses and warehouses in california filled with cancelled target goods, cancelled walmart goods. who is ripe for the picking as retailers like t.j.x, and dollar tree stock prices are up. they're positioned to capitalize on that stock. pass the savings on to the consumer in some cases keeping the prices where they were sort of preinflationary issues, which will keep the prices down, at least through december but i think come january, we're going to see a massive spike in consumer goods because we're in the challenge for at least a year. >> also while that strikes me as an important playbook, at least in the short term, in the median term, do they need to go back through earnings reports and figuring out who really got efficient over the last two years, who was really good about

curb side pick up, omni channel retail isn't that what's going to really help certain retailers perform optimally and manage inventory based on the data and what consumers want? >> yes and no. every retailer to some degree got effective with omni channel and couldn't go on what we need to look at is beyond the earnings report is what's their strategy for sourcing because right now you have china lead times have gone from eight to 12 weeks to 25 weeks. what that has done is removed the ability for a retailer to properly predict there's 80 a% accuracy a 40% accuracy with a 25% lead time what they need to look at is guys like ross and the ones with alternate supply channels that aren't ordering three, six, nine, 12 months out. baz you have to be able to turn on a dime and that's what off price can do because their

sourcing schedules are much smaller than a traditional retailer who plans six months out. let's turn now to the markets. u.s. dollar continues to get stronger, hitting a two-week high earlier today up more than 6% so far this year my next guest is staying away from american export names for that reason. for what he's buying instead, ceo and chiefinvestment office of summit global investments i want to know what you're buying but i also want to know why do you hate ibm so much >> a great question. thank for having me on your show, john listen, ibm is a great company doing a lot of great things, good announcements and trying to always get better and grow their earnings the fact is they have a lot of money from overseas and they have to convert that revenue

into u.s. dollars. so, when we have is a strong u.s., it hurts their earnings. and with an ibm, we have to be cosh officer that because it has to come back into strong u.s. dollars. when you have that type of company throughout, that's a company where, in the past, many time its ibm has blamed the strong dollar for their missed earnings we don't want to have that in the portfolio. you want to look for the down side risk and avoid it and that's one reason i recommend taavoid ibm. on the other side, you talk about exxon mobile it's a great play in energy. everything is clucking in oil. so, you have to have an exposure to energy. great companies i would highly recommend people have is exposure to. gasis going to remain elalvated.

there's more to energy stocks than just the war in ukraine those are some of my reetszens >> if the economy slows, as the fed is planning for it to -- people are hoping for sauftd landing rather than recession. won't energy react quickly to that just as it does when people are driving and traveling? >> it will react but it's lead time is going to give you enough time this is something that you can actually get into still with energy, do well. there's a lot of volatility out there. not a lot of down side risk. we don't know if we're going right into a recession we the one thing we do know is they're going to try they're going to try to do it without impacting the economy so much doesn't impact the economy the reality is we're still so dependent on gas, those gas prices aren't going to come down too much i think the down side risk is

very subdued a lot of stability and still upside to me exposure is warranted or more exposure is still warnlted. >> you don't like zoom but you like chocolate bars. what's so great about hershey in this environment >> hershey's a good company because it's domestic and a lot of its earnings come from domestic so, a strong dollar doesn't hurt hershey as much as, for example, ibm. sometimes if there is a bad economy, we might want chocolate to get us through it i think chocolate is a good play lower risk, lower beta-type of can company. and let's face it, it probbably has inflationary ability to pass along some of the costs to all of us and we'll continue to eat our sweets strong dollar i think favors domestic, if you will, exporters.

within the united states >> yeah. well, when people stress eat, that's probably bullish for chocolate bars and there's been quite a bit of that. david harden with summit global investments. in the bond market, three-year notes up for auction rick san telly tracking the action >> hi, john. it seems as though investors really did not pile into the three-year note auction. we had 34 billion starting off 96 billion in supply and the yield at this auction, 2.927, which was well with above the one issue market,b which was 2.917. right off the bat, we take a ding on pricing. the dealer takedowns were pretty much on top of the 10-auction averages what was left was a split decision if you look at indirect, 51.5. that's the lightest since october of 2021 and represents a very important group

foreign investors that did not show up. the best since 2019 at 23.6. the problem is they're large institutions and funds they usually do step up. so, a c minus on the grade you see yields kicked up right after the auction butened up and we see the 10-year note yield as well as 5-year note yield hovering around 3% >> charley brown territory thanks coming up, a special consumer edition of earnings engs change. campbell's soup and ali reporting tomorrow morning but first, bitcoin back below 30,000 losing more than half the value from the all-time high in november up next, the latest on the lawmakers looking to regulate crypto on capital hill

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welcome back to "the exchange." bitcoin dipping below 30,000 now two senators are out with a bipartisan bill aimed at regulating the crypto market yurks lan. >> reporter: well, john, this is

the most comp rehencebfive bill we've seen so far. and the goal is to establish new standards for the industry and carve out clear regulatory lanes. the responsible, financial innovation act is cosponsored by senator cynthia lummis of wyoming and on cnbc this morning, they said both industry and investors are craving certainty. >> once you create basic infrastructure around the digital assets where there are disclosure requirements, where they have is a regulator, there's full transparenciy, that's going to create the safety and soundness in the market that will give other people comfort >> now, this tries to distinguish between different type of digital assets, bitcoin and either would be considered commodities and therefore

regulated by the sec but with a security would be over seen by the sec and they set new stand rbds for stablecoins requiring them to hold 100% reserves in highly lick wud asset and creates a special process for banks to issue stablecoins and creates a new charter for other financial institutions to do the same. the early response from industry is so far positive the block chain association called it a major milestone. but this is just the beginning of the conversation on capitol hill >> i guess we'll see how much of this actually effects the crypto market blets get into how the legislation might change things. i'm joined by coin desk executive director of global content. this comes at an interesting time we knee the cstc is suing gemini, the exchange started by the brothers over how they

represented the way things work over there how is regulation of bitcoin, etc. by the cftc likely to changing the market? >> i think the most important thing is this should be some sort of regulatory clarity remember this is washington and congress and it's quite unlikely anything will happen thisiary if we see a version of the bill pass, then it could bring certainty to a market that people are really confused about. people don't know what's a security and what's a commodity it they don't know what the fdc is doing and i don't think this is going to solve all the questions. but anything that could make people think there's more clarity in the way things are regulated, i think will be good for the market >> i don't get the sense that retail traders and i hetzitate to use the word in all cases, care whether it's

a commodity or security. they think this is going to be worth something. i think it's going up perhaps. and i wonder what the perspectives are on whether regulation helps make clear referees and rules to the road so people are moreege aer to play or does it make the game less exciting in a way taking away the price spikes and have fewer people in the market and therefore prices go down >> i think that's a reasonable question some of the excitement, with as we've seen, is bad excitement, right? because just because there's rar lack of clarity about the sec verses ftc, doesn't mean you can do what you want there's been criticism you come in the u.s. and do something and you get in trouble and didn't realize you were breaking a rule. your question about retail investors is reasonable. a lot of it is targeted at crypto start ups that would set up shop as opposed to going to

singapore where it's relatively clear. there's a symbolic component because the u.s. is not going to ban crypto currency if they're putting this much effort into regulating it. we've seen in the past a these efforts to regulate the market is like a stamp of approval in a funny way and i think that does send a message to retail investors. >> what is your take away from the way bitcoin in particular and the way crypto markets have been behaving over 2022 so far there's a separation in the last coupleal of weeks in that. what are investors acting on is there kung census >> i don't know if there was any consensus on what drives bitcoin prices

for 2022, you're exactly right it's been largely defined bay correlation between crypto and equities what's the point of bitcoin? if it's just actic like equities and i think people are asking that it's supposed to be an inflation hedge. that's such a big part of its identity and in theory, this should be their moment to shine. we're in real inflation and we're not seeing that. i think there's some disappointment that bitcoin is not acting like a safe haven asset or a hedge against inflation. this is a longer term narrative. i think we're going to see if it does start serving the purposes in the longer term >> it always becomes clear in a longer term but without a time machine, it's hard to make a profit still ahead, semiconductor stocks have been getting squeezed all year. we're getting signs the chip crunch could be easing who stands to benefit, plus are

targets a canary in the coal mine and as we head to break, the dow is at session highs with sasfcechroleor, evn and apple leading the way. "the exchange" back after this and those companies have to pay for them. which means you have to pay for them. but we don't have stores... this is our store. which means we can offer you a single line with unlimited data...for as low as $25 a month. sometimes a better choice is just...visible. switch today at visible dot com.

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welcome back to "the exchange." marngets fractionally higher than industries. dow high is up 134 low down 274 and you see it's up about 111. if we look at the sectors. target continues to weigh on

consumer discretionary while energy is the big out performer as oil hovers around 118 a barrel within energy, we have a number of all-time highs including conco phillips and valero. cloud and cyber security stocks moving higher today. cloud strike building on yesterday's gains after morgan stanley upgraded it. it's up 10% in two days. and chinese tech stocks are in the green. up around 8% the crane shares internet etf aiming for the fifth straight week of gains. that would be the longest streak since january 2020 now to tyler matheson for a cnbc news update. and good afternoon everyone. a democratic senator participating in bipartisan talks on gun regulation says he hopes he can announce a frame drz work on a compromise by the end of the week. connecticut democrat, chris murphy was at the white house to

update president biden on the discussions. at senate laering today, the son of a woman shot and killed in a buffalo supermarket a couple of week withes ago challenged lawmakers to, in his words, stop the cancer of white supremacy and the domestic terrorism it inspires. >> for her to be murdered, taken away from us by someone so full of hate is impossible to understand and even harder to live with but we're more than hurt we're angry. we're mad as hell because this should have never happened meantime, also on capitol hill, the treasury secretary, yellen, urged congress to reduce gun violence saying research shows school shootings have a negative impact on survivors and, in the long run, the economy tonight on the news with shep smith, is there a shortage of

pilots for passenger flights we'll tell you why airlines ses yes but the pilot's union ses no meantime, john, back to you. >> thanks. still ahead, ali's, campbell's soup and brown forman on deck with earnings. consumer key with all three. we're going to get you ready for the reports in earnings exchange coming up next and during june, with we're celebrating pride month and featuring some of our cnbc teammates and contributors here's francisco andrew clark. >> it's more important than ever to celebrate pride month pride is the moment to it stand up and represent our community while standing along side other minorities in a celebration of the defense of diversity and equality in this country pride is happy, pride is positive but pride is serious and pride is necessary

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welcome back, everybody. another roller coaster trading day for stocks as they briefly sent averages am

to the red on fears of weakening consumer strength. let's get the story, action and trade on three consumer-focussed companies set to report results tomorrow before the bell it's time for earnings exchange. first up, ollie's bargain outlet down 1% on the year as consumers face recrbd-high inflation cnbc.comretail reporter has th story and cnbc contributor joins us with the trade. he is also manager of fx strategy at bj asset management. it seems to just my novice mind that target's pain could be the gain of somebody like ali's because if you want to off load stuff and you're target, don't you send it to ali >> bingo i think lot of analysts and investors would agree with that sentiment and believe that to be true i think that's one big reason this afternoon ahead of the

report tomorrow when the rest of the retail sector is down largely because there is the idea that ollie's could stand up they're in the business of buying over stocked inventory and selling it as a discount to the consumer and a lot of consumers are searching for a good deal. you have that cash-strapped consumer shopping on a budget and ollie's bargain outlet is perfect for them they spoke last quarter when they reported results about how they restarting to see market share coming their way they were noticing the trade downs we heard walmart and target discuss of course, they still have the supply chain pressures and higher labor expenses that they're facing much like the rest of the retail industry. that's going to weigh on margins in the near term tltz rr expex takes that ollie's could raise the outlook because of what you mentioned with targ andt the it rest of the retail

industry having extra inventory. >> higher supply at good price and higher demand from cash-strapped consumers. what worries about this potentially is this just a sugar high is this a long-term benefit for the discounters if the economy really does slow down, given that ollie's isn't down that much in the year, might there be pain ahead relative to expectations >> i think it's first of all down quite a lot off the all-time highs, down by half and quite a lot of support at the 50 level. in fact, trading today is super bullish up 5% on the day market is anticipating what you were talking about positive news into the next 9 to 18 months. if you believe we're going to be in the dog-eat, dog retail environment where consumers are much more careful about what they choose and where they buy things, ollie's stands to benefit. to me this is probably the

strongest stock out of all three as far as secular fundamental growth goes. you could sell the 45 july twektd puts and basically pick up the stock at 50% discount price on a biesz if you want to position yourself underneath this price. but overall, out of all the stocks, this is the strongest for the upside because it's well position prd the current economy. >> want to say thanks to lauren thomas next up. you know what else people do when money gets snoigt they eat canned soup. shares up about 7% for the year. they're expecting organic sales growth of 3% dominic chu has the story. >> those things that are the more every day things we talk about, the stuff we have to spend on choices with regard to eating, drinking, personal care. for campbell's it's netted out

to a whopping 7% gain on the year and a 6% loss over the last twevrl months. it's 61 cents a share. a consensus estimate and the options market is pricing at a 4.5% move up or down on the heels of this report and investors are closely watching for how the maker of everything from its namesake soups to prego pasta sauces to cape cod potato chips will navigate the pricing we see. it's passing along price increases to customers and streamlining the supply chain. now, snacks is the key part of the story a. growth has been responsible for a lot of different things. we're talking peperage farm cookies,b the cape cod chips i mentioned. that snacks business is something you have to watch for closely. >> we talked about hershey's earlier and maybe stress eating involved i guess we're going to you on this one as well

>> let's talk about campbell's soup i worry about the input costs here as dom was eluding to cost of cans, cost of veggies and all of that that goes into the soups. >> yeah and don't forget transport costs. i think those are going to be weighing i can't get too excited about campbell's was soup. the problem with the company is i think there's a limited amount for demand for their product it's very process-oriented food. i think they're not getting out much more from their houses so they're looking for fresher, better food. you can see inmarket is uninterested in the story. i think if you're an income-oriented investor, it's relatively cheap with a 3.3% dividend and you could probably sell quarterly options against it, 10% out of the money and turn it into an income trade that's the best thing i can say

about campbell's as a trader >> not so excited about the gold fish crackers. i thought i was going to eat those every night when i became an adult finally, brown-forman out performing competitor. the company did warn of ongoing headlines from supply chain disruptions and inflationary costs. dom, what about this one >> a lot of folks i talk to could use the cocktail they use the bourbon for those brown-forman may intuitively be ben 239ing from more demand. but the stock isn't showing it so, it's down on the year and you can see 11% down 18% over the last 12 months as for the earnings expectations, it's for 20 cents a share. jack daniels obviously big for them woodferred reserve and tequila

also a big sell isser for them as well. all part of the premium brand portfolio. but demand is there. b they've been selling the stuff as many liquor places have been since the depth of the pandemic. it's going to be things like materials, costs, labor costs are big for this particular industry as well so, the story is about what it's going to take to get excited about the stock and moving in the right direction. because the growth is there, especially in ski parts of the market and internationalally especially for the higher end bourbon. >> you're not excited about soup foreman a can. how about bourbon from bottle? the margins tend to be better on the brown stuff. >> the stock is trading like high tech stock. the problem isn't necessarily the product portfolio but way more expensive on a valuation basis. i like deashio's portfolio better than this i think generally, at this

point, jaw, jack daniels is a tremendous brand flame growth maybe up to double digits yet, the stock is trading at four times earn gsz. i think they have a tall order in the high interest rate environment to make headway. it's not a stock i wanted to participate in at this point i'd rather go with diagoe than this >> can if those other two stocks go to ollie's, then maybe he'll be excited >> maybe they'll sell jack daniels on a discount. >> dom, boris, thank you now, let's get a quick programming note the ceo of brown-forman to discuss the results and more live at 2:00 p.m. eastern. and still ahead, not just the chip makers. companies like apple and ford

getting punished by the chip shortage but relief might be on the way we'll discuss. first, new cnbc survey results showing how wide rgianng and impactful can pandemic unemployment benefits work

welcome back unemtployment benefits paid during the pandemic had a profound effect on work withers lives and the economy. steve. >> john, this is really interesting. it would appear both supporters and critics, they both have a point. the cnbc all-america work force survey asked almost 2,000 americans, working and how they were effected. here's how they answered here's the bad part first. to enable you to remain out of

work longer than you otherwise would have 55% imploid said yes and 51% who retired during the pandemic also said yes and coming from the survey of those who were employed did enable you to spend more time finding the right jobs 62% said yes supporters touted about it did it help you get out of debt? 48%. and parents said it enabled them to pay for child care. about a quarter of employed people, 42% of those currently emunemployed as well pandemic employment benefits, 32% said yes, 68% said no. so, it's come down a bit in terms of returning people to the work force 25% of employed trump voters and 25% of biden voters reporting receiving with some differences regionally a little more on the west and in

the northeast but in the middle of the country they had stricter covid requirements and restrictions so, it did the things critics said it did and did the things the supporters said it did >> more important perhaps now is what's the impact in the future now that they're not still -- the benefits aren't still coming people who used the team pay for child care, are there implications for consumer spending >> absolutely. that's a great question because we did ask what have you done with them? 30 to 40% still have some left over savings and invested economists talk a lot about the idea there's savings that is going to power the consumer through and some of that seems to come from the benefits that are out there and still not completely safe. >> did you get any sense -- consumers have been taking on a

lot of credit during this time as well. the stimulus gave them more money in their pocket but they're taking on more debt? >> the are things we don't know if are good signs or bad signs i've always been puzzled if people are eating at mcdonald's more does that mean they have more money or less peeptal who feel good about the future can take on more credit we understand the underline of what you're saying what we doernlt go is did it surge bauz they're confident or because they're stretching and everybody is going to come up with they want from what they want the answer to be. >> if you get the double quarter pounder, that's a good sign, because you're splurging >> don't get 24 double quarter pounder. don't. i can tell you from experience >> i'm in my mid-40s now >> diet coke and don't get the fries. >> you can trust me. shares of academy sports and outdoors climbing on an earnings

beat sales actually fell year over year and the company lowed idceer we're going to talk to the ceo about whether they like target, could be facing over stock issues that's next. do you have a life insurance policy you no longer need? now you can sell your policy - even a term policy - for an immediate cash payment. we thought we had planned carefully for our retirement. but we quickly realized we needed a way to supplement our income. if you have $100,000 or more of life insurance, you may qualify to sell your policy. don't cancel or let your policy lapse without finding out what it's worth. visit coventrydirect.com to find out if your policy qualifies. or call the number on your screen. coventry direct, redefining insurance. ♪♪ age before beauty? why not both? visibly diminish wrinkled skin in just two days.

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♪ welcome back to "the exchange." shares of academy sports and outdoors up more than 7% about 7.5% after reporting stronger than expected earnings in the second quarter. and while they did and said that inventories and its shipping costs increased joining me now is chairman and ceo ken hicks. great to talk to you i was just talking to steve liesman about stimulus impact, and you talked about that a bit on the call. that's part of the reason why things are down by comparison, but do you yet have visibility into what the normalized trend is going to be >> yes, we feel that we actually are in pretty good shape we're up 38% the first quarter last year, this quarter we were down 7, so we've been running now about 30% up on the two-year

basis. >> so it seems to me that in an inflationary environment, people might just want to go outside and enjoy the simple things a bit more, which could benefit you. at the same time, though, the cost of some of those simpler things going up a bit. so even within the categories that you deal in, where are you seeing continued strength in consumer demand? >> we are seeing continued strength in areas like team sports kids are still going out and playing, camping is one where people are going out, and our apparel and footwear businesses has picked up also. >> so what is happening at the same time when it comes to labor and construction i believe about 40% of your stores at this point are in texas, but you're looking to expand out of there. how does this economic environment affect those expansion plans? >> well, looking for sites has become a challenge, but we've got a great team doing them, and we've had to go further out in

terms of reserving the materials to build the stores than we normally would because of material shortages, and the cost has gone up, but it's -- fortunately we've got a model that will allow us to build the stores economically and have productive stores that will be cash flow positive in the first year. >> ken, what are you doing on labor costs, and how is churn in the work force trending? >> we're seeing more churn than we have in the past, but we're a fun place to work, and so we have taken up wages over the past several years, and we have not had a problem in our stores hiring people to take care of our customers. >> what is the impact -- there's been a tragedy in texas recently in uvalde, i want to note that you do have firearm sales. what has been the impact of that on both your policies in firearm

sales and in demand? >> well, our hearts go out to all of those who are affected by the tragedy, and we have always worked to be the most responsible firearms retailer in the country. we go above and beyond all of the requirements that are required by law, and we work hard to make sure that we are responsible and that our customers who buy the firearms are responsible by giving them all locking devices, giving discounts onsafes when they do buy a firearm, and making sure that we do background checks and get a completed background check on all customers. >> important to note, finally on inventories, how full are you? do you feel like you have the right merchandise to sell through or are you having to do

markdowns? >> we are in very good inventory position there's a couple of areas, one of which is like cleats that are a little more challenged in terms of not having enough, but we do not have a big problem with inventory we have right now 9% more inventory than what we had in 2019, and our sales are up over 35% over that time period, so we've been able -- our team has done a great job managing the inventory, and we don't see any glips in our inventory. >> important work to do, ken hicks ceo of academy sports is outdoors thank you. thank you, john. coming up, it's been a rough year for semiconductors as companies navigate the ongoing chip shortage. there are signs that it could resolve soon the details and the companies poised to benefit next

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welcome back, there's some

early signs the chip shortage might be easing. we're at the nasdaq with a look at companies that could soon be seeing a light at the end of the tunnel >> soon, soon, right we've got daimler truck, bmw, ford, all expect the chip chrunc to abate even semiconductor inventory levels are increasing. inventory increased to 95 days in q1 of this year up from the 77-day median just over the past decade so how else are chip makers shaking off this crunch that has plagued the industry for almost two years? you've got the easing of lockdowns in shanghai. then you've got foundry capacity that's growing quickly around the globe. taiwan semiconductor is aggressively adding supply which helps customers like amd, qualcomm and apple another concerning contributor, a slowdown in demand new april data shows semi revenue growth is decelerating

on weakening units you can see it on the far right-hand side side of your screen like markets, like pcs and hand sets citi lowered their sales estimate for intel due to weakening pc demand. and it's not all peachy for the chip supply chain. you have micro chip ceo who said they would prioritize equipment manufacturers over other customers, whereas intel's ceo told cnbc he thinks the shortage will extend into next year because of the impact on equipment, not chips so many are still concerned about the supply shortage in chip making equipment, even if these makers get the chips, they're still facing issues getting other materials and labor to build the chip making machines so i guess we can't win it all, right john >> i guess part of what you're saying there is there's a difference in process technology whether you're doing the cutting edge manufacturing that goes into smartphones and pcs or the older stuff that goes into cars

and appliances >> which is why there's a discrepancy, so for the lagging, which you're referring to the auto sector, there's even concerns that eventually in the near-term there may be a backlog or, sorry, an over increase of inventory because they've been holding on for so long there is a difference between both supply chains. >> important data, thank you that will do it for "the exchange." "power lunch" starts now hit that moment right on the button, thank you, john. welcome, everybody to "power lunch. i'm tyler mathisen here's what's ahead, inventory glut, target issuing a profit warning. again, the issue too much stuff on the shelves, the company isn't alone. other retailers facing the same challenge. plus, the price of natural gas tripling over the past year. a short time ago the eia said demand and output