we join jim paulsen from way outside this it code. what do you observe in the midwest?im: well, i think the thing that impresses me the most is a little bit of what you are talking about, how much the economic reports coming out are just exceeding everyone's expectations. i looked at the bloomberg u.s. economic surprise index, and that has been in the upper quintile of its history, and there's nothing like that in its history even close to that. we have been chronically outpacing expectations. last week was a great example, when the retail numbers came out, everyone knew they were going to be a blowout, and yet, even though the estimates were really aggressive, we blew those numbers away. jonathan was just talking about earnings. future one year estimates on wall street go up at about a 17 to percent to 18% annualized pace. when you are in the bottom quintile, they fall 5%. so earnings estimates are chronically being upscaled because we are just being bombarded with economic information that shows that conditions are better than we had thought, and if earnings estimates

you had jim paulsen on, i'm so glad, i love him.gs that you mentioned in that segment was that there are more flows into equities this past year than we've had in the previous 12 years combined. well, if you look at the money supply today, m2 -- charles: right. >> -- has increased over $4 trillion in the last year. that's more than in the previous six years, just new money. charles: wow, amazing. >> and with all new money pouring in, house prices are up 12%, stock prices, so people with assets are getting weptier, and at the same time we're paying -- wealthier, and at the same time we're paying people not to work which means they're not productive, that's increasing inequality, it's not decreasing it. the fed is, it's having the backward impact on the economy. charles: well, maybe -- you may have to put a phone call in to jay powell and company because they're not trained in this approach at all. >> no, they're not. charles: have a great weekend, my friend. >> absolutely, charles. charles: president biden's infrastructure plan has b

plus, jim paulsen on the markets next move.premarket it pulled a plug on a deal struck in 2016 to be bought by beijing based china ocean wide holdings for $2.7 billion. delayed by a variety of factors including regulatory hurdles and financing issues it's down almost 2% or six cents. we'll be right back. go aflac!!! what the heck, troy - that's not your kid! the aflac duck is just covering for sophie. same way he got me money to help cover her hospital bill when my health insurance didn't pay for all of it. but this isn't fair! that's exactly what i said! but then i learned health insurance isn't even supposed to cover everything. wait...for real? for real real. luckily i had aflac. aflac!!! get help with expenses health insurance doesn't cover. go aflac! !mm-hm! get to know us at aflac.com. >>> still to come on "squawk box" this morning, dr. scott gottlieb joins us to talk about the buzz around vaccine passports and the pushback from states that's next. first though, april is financial literacy month cnbc is sharing messages f

jim paulsen coming up later. he can't wait to join. [laughter] on radio, on tv. it's friday.his is bloomberg. ♪ karina: with the first word news, i'm karina mitchell. president biden is proposing a capital gains tax almost twice as high as it is now. those earning $1 million or more could pay as much as 43.4%. the president wants the increase to help pay for a raft of social spending to address inequality. russia is withdrawing thousands of troops from the ukraine border today. western leaders had called on moscow to pull troops back. there were fears conflict could lead to new economic sanctions. panasonic has agreed to buy american artificial intelligence software developer blue yonder for $7.1 billion. panasonic will fund the deal through cash and a bridge loan. the company also has a 20% stake in blue yonder, which uses ai to predict product demand. daimler predicts research and vehicle demand in the midst of the pandemic. the world's biggest auto street -- biggest automaker suggests an historically strong showing. spacex shuttle lifted off from florida today, the first t

joining me now chief strategist for the leuthold group, jim paulsen.ou talked about the epic battle ahead. that caught my attention. u.s. policy officials pumping indefinite money against the inflation slayers. i never heard that term before. tell the audience who the inflation slayers are and more importantly who will win the battle? >> who will win. we're worried about policy and policy certainly can create a cyclical burst of inflation. it is already doing that as you reported out in the gdp report, charles, but the real question for investors is not about a burst of inflation, does it persist, is it sustainable inflation and that i think really has more to do with structural forces, the inflation slayers. people go back to the 1970s, as an example where we might be head but i tell you the structural forces were very different back then. first off was labor force growth. inin the 1970s, the labor force grew 2 1/2% a year. outside of the 1970s, the entire postwar era the rest of the time it has grown about 1% per year. the rest of the time we haven't

let me pick up with the conversation i had with jim paulsen. he likes the reopening trade still.likes the cyclical trade still. what is intriguing, columbia thread needle says we're 66% back to normal. goldman sachs says we're like 78% back to normal. thinking of the market is always ahead of the curve wouldn't that be priced in yet? wouldn't you still want to be heavy in these stocks? >> i think there is still upside because many of these pro-cyclicals, energy, financials, they're still well off their highs and they still haven't made up all of what they lost when we had the downturn a year ago. so there is still opportunity there but i do think to your point the market is forward-looking. market has not been pricing in a mid-year, june, july reopening for quite some time. this is not new. we started to see these types of stocks rebound in october of last year. so i'm being a little more cautious. i'm trying to be more focused on risk and managing risk because as jim pointed out, at times where everything feels so good and you think that there is only upside, that's when bad thi