CPI ON YEAR OVER YEAR. 3.5% ALSO ON A MONTH-OVER-MONTH BASIS. .4% INCREASE IN LINE WITH WHAT WE SAW THE PRIOR MONTH THERE. WHEN YOU TAKE A LOOK AT CORE CPI PRINT ON A MONTH-OVER-MONTH BASIS SLIGHTLY HOTTER THAN WHAT THE STREET WAS LOOKING FOR. GROWTH OF .4 OF A PERCENT. YEAR-OVER-YEAR BASIS SLIGHTLY HOTTER AT 3.8%. THE HOLDING NUMBER, THE INCREASE THAT WE SAW LAST MONTH HERE. SO A BIT OF A HOTTER THAN EXPECTED PRINT HERE, BRAD. OF COURSE, IF YOU ARE GOING INTO THIS WE COULD SEE A HOTTER THAN EXPECTED PRINT AND THE PRESSURE THAT COULD PUT ON THE MARKETS THERE QUICKLY AS A RESULT. >> LOOKING AT SOME OF THE COLOR BEHIND THIS REPORT SPECIFICALLY. TAKING A LOOK AT FUTURES IN THE RED FOR THE DOW AND NASDAQ AND THE S&P 500. ONE HUGE THING THAT JUMPS OUT TO ME FROM THIS REPORT IS THE AREAS HERE. THE FOOD INDEX PARTICULARLY, WE'RE GOING TO DIVE INTO SOME OF THESE CATEGORIES WITH OUR REPORTERS. OUR NEWSROOM IS A STIR WITH ALL OF THE DIFFERENT AREAS WE'RE COVERING. FOOD INDEX UP BY 1.7% IN MARCH. FOOD INDEX UNCHANGED COSTING A LITTLE BIT MORE. UP BY .3 OF A PERCENT OVER THE MONTH. INDEX IS INCREASED IN MARCH. THIS SHOULD COME AS NO SURPRISE. SHELTER. >> Mike: INSURANCE. MEDICAL CARE. APPAREL AND PERSONAL CARE. DECREASES. INTERESTING FOR PEOPLE TO KEEP TRACK AND KEEP A SCORE. INDEXES FOR USED CARS, TRUCKS, RECREATION AND NEW VEHICLES DECREASED. AREAS WHERE CONSUMERS ESPECIALLY ON VEHICLE SALES COMPONENT PUSHING BACK ON PRICES. >> INTERESTING TO POINT OUT. WHEN YOU TAKE A LOOK AT SOME OF THE DROPS YOU WERE MENTIONING. USED CARS AND TRUCKS DOWN 1.1% HERE FOR THE MONTH. NEW VEHICLES OFF JUST ABOUT .2 OF A PERCENT. TAKING A LOOK AT THE REACTION WE'RE SEEING PLAYING OUT IN THE MARKET. TAKING A LOOK AT FUTURES UNDER A BIT OF PRESSURE. WHEN YOU TAKE A LOOK AT THE REACTION WE ARE ALSO SEEING IN THE BOND MARKET. WE ARE SEEING YIELDS RISE ON THE HEELS OF THIS HOTTER THAN EXPECTED INFLATION PRINT. THIS IS WHAT THE STREET HAD BEEN BRACING ITSELF FOR. THE THIRD STRAIGHT MONTH WE HAD SEEN OF INFLATION BEEN A BIT TOO HOT FOR THE FED'S LIKING. BR BRINGS OUT THE QUESTION OF ARE WE GOING TO CONTINUE WITH THE DOWNWARD TREND. LET'S TAKE A CLOSER LOOK THAT WE ARE SEEING. JARED STANDING BY WITH A CLOSER LOOK AT THAT. JARED? >> THANK YOU, SHAWNA. A STRONG ECONOMY. DIVING INTO THE REPORT. JUST THE HEADLINES SENDING STOCK FUTURES SOUTH. YOU CAN SEE THAT BEHIND ME IN THE UPPER LEFT. ALL OF THOSE NUMBERS THAT I CIRCLED WERE IN THE GREEN UP BY 1/3 OF A PERCENT. RUSSELL 2000 LEADING THE WAY DOWN DOWN 2.6%. HERE IS BEFORE THE REPORT YOU CAN SEE WAS IN THE GREEN. SOLIDLY IN THE RED. THAT IS JUST A HUGE SWING AND I SHOULD SAY THAT CPI HAS PLAYED AN OUTSIZED ROLE IN A LOT OF THE STOCK MOVES OVER THE LAST YEAR AND A HALF SINCE WE HAD THE OCTOBER LOWS BASICALLY IN 2022. HERE IS A TWO-YEAR TREASURY NOTE. THIS IS HEADING DOWN. INTEREST RATES ARE HEADING UP. WE MIGHT SEE THE NECESSITY OF EVEN HIGHER PROLONGED EARNINGS. THAT'S SOMETHING THE STREET HAS BEEN DISCOUNTING. THAT WILL BE THE NO LANDING SCENARIO. 10-YEAR TREASURY. HEADING SOUTH IN THE FUTURES WHICH MEANS THE RATES ARE SURGING RIGHT NOW. LET'S SEE WHAT'S HAPPENING IN THE GOLD MARKET. COMING OFF OF, WHAT, 7, 8, 9 DAYS IN A ROW. RECORD HIGHS. GOLD FUTURES DOWN. THEY HAD BEEN UP. THAT'S A REVERSAL THERE. ALSO TAKING A LOOK AT COPPER FUTURES. STILL IN THE GREEN THOUGH THEY HAVE PAIRED GAINS SIGNIFICANTLY. I DO LIKE TO CHECK IN ON BITCOIN. BITCOIN SOMETIMES REACTS. WE CAN SEE BIT CCOIN HEADING DO TO 68,000. I WANT TO TAKE A QUICK LOOK AT THE SECTOR ACTION. I WOULD SAY IT'S A SPLIT PICTURE NOW. FINANCIALS IN THE GREEN BY JUST ABOUT 17 BASIS POINTS. SORE MATERIALS AND UTILITIES. TO THE DOWN SIDE, IT'S REAL ESTATE, TECH, INDUSTRIALS, CONSUMER DISCRETIONARY, COMMUNICATION SERVICES, CYCLICAL AND MEGACAP SECTORS TAKING A REAL BIG HIT. >> DEREK, APPRECIATE IT. INSIDE OF ONE HOUR UNTIL THE START OF TODAY'S TRADING. CONSUMER PRICE INDEX COMING IN HOTTER THAN EXPECTED. THAT CORE RISING 3.8% VERSUS THE 3.7%. FOR MORE ON CPI, VICTORIA FERNANDEZ AND GREG DAPPO WHO IS THE EY CHIEF. GREG, FIRST AND FOREMOST. SITTING HERE IN THE STUDIO WITH US, ONE OF THE HUGE THINGS WE WERE TALKING ABOUT BEFORE THIS REPORT DROPPED, WOULD IT BE A DUD? WOULD IT BE A NOTHING BURGER? I WAS PLAYING WHITE NOISE. HOW WOULD YOU DESCRIBE IT AT THIS JUNCTURE? >> I THINK IT'S NO DOUBT DISAPPOINTING. ABOVE 0.3. LOOKING INTO THE DETAILS, I WOULD POINT OUT SOME OF THE INCREASES WERE VERY SPECIFIC FACTORS THAT THE FED PERHAPS DOESN'T HAVE THAT MUCH CONTROL OVER. THE PRICE OF CAR INSURANCE GOING UP 2.6%. THE PRICE OF MEDICAL SERVICES GOING UP QUITE STRONGLY. THOSE ARE CATEGORIES THAT DO NOT NECESSARILY REFLECT STRONGER DEMAND. COOLER DEMAND AND INFLATIONARY PRESSURES. THERE'S NO DENYING THE FIRMER INFLATION PRINT DOES PUT MORE PRESSURE ON POLICY MAKERS TO SUSTAIN. POWELL SAID IT WAS SEASONALITY AT THIS. THEY WEREN'T TOO CONCERNED WITH FEBRUARY. NOW YOU HAVE THE THIRD MONTH IN A ROW. I THINK THERE'S GOING TO BE SOME CONCERN AROUND THAT. IT'S TELLING THE FEDERAL RESERVE THEY'RE NOT GETTING THE CONSISTENT DOWNWARD MOVEMENT TOWARDS 2% THAT THEY WANT TO SEE. GRANTED, AS GREG SAID, MAYBE THEY DON'T HAVE CONTROL OVER SOME ELEMENTS BUT IT PUTS PRESSURE ON THEM TO KEEP RATES AT AN ELEVATED LEVEL. LET'S LOOK AT WHAT THE 10-YEAR YIELD HAS DONE. IN THE LAST 10 OR 11 MINUTES WE'VE JUMPED AND THEY'RE PRICING OUT RATE CUTS. I DON'T THINK WE'RE GOING TO SEE THREE, SHAWNA, THREE RATE CUTS. YOU ALREADY HAD FED MEMBERS COME OUT SAYING 1, MAYBE 2, MAYBE NONE. WE'LL SEE HOW MUCH MORE HAWKISH THEY GET AFTER TODAY'S REPORT AS WELL, BUT I DO THINK WE NEED TO DIVE INTO THE NUMBERS A LITTLE BIT MORE TO GET A BETTER READ ON WHAT THEY'RE GOING TO BE LOOKING AT. >> GREG, I SAW YOU SHAKING YOUR HEAD HERE. TO WHAT EXTENT DO YOU DISAGREE? >> I THINK WE HAVE TO BE CAREFUL WHAT'S DRIVING INFLATION. THIS IS VERY IMPORTANT TO MONITOR. YOU LOOK AT CORE GOODS DOWN 0.2%. THAT'S A VERY DISINFLATIONARY READING. YOU LOOK AT CORE SOLUTIONS AND SHEM SHELTER COSTS, THAT'S BEEN EASING. 0.4% MONTH OVER MONTH. AIRFARES FALLING BACK. THE FIRST TWO MONTHS OF THE YEAR WERE EXTREMELY NOISY. WE HAVE TO BE CAREFUL NOT TO FACTOR THAT IN TOO MUCH JUST LIKE WE HAVE NOT FACTORED IN TOO MUCH VERY RAPID DISINFLATION WE HAD LAST YEAR. >> VICTORIA, I WANT TO GET YOUR THOUGHTS ON WHEN YOU SPOKE TO BOSTICK YESTERDAY ABOUT HIS CURRENT PROJECTION ON THIS. WHAT DID HE HAVE TO SAY ABOUT HIS EXPECTATION FOR RATE CUTS THIS YEAR. I WANT TO PLAY THAT CLIP AND GET YOUR REACTION. GIVEN THE REALITY HAS BEEN SO ROBUST, SO STRONG, SO RESILIENT, YOU CAN'T TAKE OFF THE POSSIBILITY THAT RATE CUTS MAY HAVE TO MOVE FURTHER OUT. >> VICTORIA, GIVEN THE FACT, WHAT DO YOU HAVE TO SAY, AHEAD OF THIS PRINT AND GIVEN THE REACTION WE'RE SEEING IN THE MARKETS, YOU HAVE ALL THREE MAJOR AVERAGES ON TRACK TO OPEN THE DAY OFF OVER 1%. IF WE DON'T SEE THE FED CUT THREE TIMES THIS YEAR, HOW MUCH MORE PRESSURE DO YOU THINK WE COULD SEE ON EQUITIES AT LEAST IN THE SHORT TERM? >> YEAH, I MEAN, LOOK. IT'S ALL GOING TO COME DOWN TO HOW FAR WE SEE YIELDS MOVE AND WHAT KIND OF PRESSURE THAT PUTS ON PEs FOR THE EQUITY MARKET. WE'RE AT 21, 21.5 TIMES. A LOT OF IT RELIES ON EARNINGS. WE KNOW THAT STARTS ON FRIDAY WITH THE BANKS. RIGHT NOW THE ECONOMY IS ABLE TO SWALLOW THAT. WE'RE SEEING THAT WITH GDP ESTIMATES STILL MOVING HIGHER. WHEN WE START TO SEE CRACKS THERE, IT FEEDS THROUGH EARNINGS. BOSS STICK IS RIGHT IT COULD LEAD TO NO RATE CUTS. IT WILL FORCE YIELDS HIGHER. WE HAVE TO WAIT AND SEE. DEMAND AND CONSUMER SPENDING. SHOWING SOME SPENDING HAS COME DOWN. WE'RE GOING TO START TO SEE MORE EFFECTS OF THE RATE HIKE SO FAR PLAY THROUGH INTO THE EQUITY MARKETS. >> WHAT DOES THE FED'S TENOR SAY? >> IT'S A PLAY-BY-PLAY. >> NO, IT'S COLOR COMMON TEAR RI. >> INVESTORS HAVE TAKEN THE IMPRESSION THAT FED POLICY MAKERS ARE DOING IT ON A PLAY BY PLAY BASIS. EVERY TIME THERE'S A DATA BREECH, THERE'S MASSIVE MARKET SHIFTS IN THE PRICING OF EXPECTATIONS. WHAT THEY'RE INTENT ON DOING IS GETTING INFLATION COMFORTABLY AND INFLATIONARY FOR THE PCE INDICATOR. WE ARE MOVING IN THAT DIRECTION. THESE TYPES OF READINGS DO STILL POINT TOWARDS DISINFLATIONARY PRESSURES. IT'S NOT AS RAPID BUT IT IS STILL MOVING IN THE RIGHT DIRECTION. IT'S GOING TO TAKE TIME. THE FED WILL EASE THREE TIMES THIS YEAR. PERHAPS IT WILL WAIT A LITTLE BIT LONGER THAN JUNE BECAUSE IT DOES NOT HAVE SUFFICIENT CONFIDENCE TO START THE EASING CYCLE. I DON'T THINK WE SHOULD PRICE OUT ALL THE RATE HIKES. WE ARE IN AN ECONOMY GRADUALLY SLOWING WHERE THE LABOR MARKET IS GRADUALLY COOLING. >>> BY THE WAY, I'M TAKING A LOOK HERE BRIEFLY. 72% NOW STAYING AT THE CURRENT RATE FOR JUNE IS WHERE THE PROBABILITY HAS JUMPED TO AT THIS POINT IN TIME. VICTORIA, WHAT TYPE OF TRADE DOES THAT INITIATE FOR YOU IN YOUR MIND COMING OFF A REPORT LIKE THIS? >> YEAH, WELL, I THINK, LOOK, WHEN WE'RE INVESTING FOR OUR CLIENTS, WE WANT THEM TO BE FULLY INVESTED IN THE EQUITY MARKET. THEY HAVE TO BE CAUTIOUS ABOUT WHERE THEY'RE PUTTING THEIR MONEY TO WORK. WE DO THINK YOU WILL PROBABLY SEE A PULL BACK. WE HAVEN'T SEEN THAT 2% PULL BACK THAT YOU TYPICALLY SEE FOR QUITE A LONG PERIOD OF TIME AND IN AN ELECTION YEAR YOU TYPICALLY SEE LOW DOUBLE DIGIT PULL BACK. WE WOULD BE CAUTIOUS IN WHERE WE'RE PUTTING MONEY TO WORK. WE WOULD BE DIVERSIFIED AND PUT MONEY TO WORK IN THE FIXED MARKETS. YOU CAN DO A BAR BELL ON THE SHORT END AND LONG END TO TAKE ADVANTAGE OF WHERE THE YIELDS ARE. WE PROBABLY ARE GETTING CLOSER TO THE HIGHER END OF THE TRADING RANGE FOR YIELD. MAYBE THEY GO A LITTLE BIT HIGHER, BUT I DON'T THINK WE'LL GO SIGNIFICANTLY HIGHER FROM WHERE WE ARE. YOU CAN POSITION YOURSELF TO TAKE ADVANTAGE OF WHEN THE FED DOES START TO CUT RATES. YOU CAN GET SOME POSITIVE CHANGE THERE IN YOUR PORTFOLIO VALUE. SO WE STAY INVESTED. THE TRADE FOR US IS TO BE THERE, TO BE CAUTIOUS IN WHAT WE'RE INVESTING IN AND TO TAKE ADVANTAGE OF SOME OF THE YIELDS WE'RE SEEING IN THE FIXED INCOME MARKETS. >> WE HAVE TO LEAVE IT THERE. VICTORIA FERNANDEZ AND STEVE DAKA. >>> TAKE A LOOK ONE MORE TIME AT THE NUMBERS HERE BECAUSE WE HAVE CERTAINLY SEEN PRESSURE ACROSS THE BOARD WHEN IT COMES TO EQUITIES. INFLATION THE HEADLINE FOR INCOMING AND HOTTER THAN EXPECTED. MONTH-OVER-MONTH BASIS. HEADLINE INCREASING .4 OF A PERCENT ON A YEAR-OVER-YEAR BASIS. CORE READINGS ON A MONTH-OVER-MONTH BASIS UP .4 OF A PERCENT ON A YEAR-OVER-YEAR BASIS. COMING IN SLIGHTLY HOTTER THAN WHAT THE STREET WAS PREDICTING. 45 MINUTES UNTIL THE OPENING BELL AND YOU'RE LOOKING AT ALL THREE OF THE AVERAGES ON TRACK TO OPEN AT THE READY. DOW AND S&P OFF 1.5% AS WELL AS NASDAQ. CLOSELY BE WATCHING FROM THE SELLING ACTION WE'LL BE SEEK ON THIS. MUCH MORE ON THE CPI REPORT COMING UP AFTER THE BREAK. >>> FUTURES WERE AFTER CPI. CONSUMER PRICE INDEX FOR MARCH CAME IN HOTTER THAN EXPECTED. THE CORE RISING 3.8% VERSUS 3.7% EXPECTED HERE. WE'RE TAKING A DEEPER DIVE INTO THREE SECTORS THAT HAD BEEN HIT BY STICKY INFLATION. FOOD, ENERGY AND SHELTER. WE'VE GOT TEAM COVERAGE TO BREAK IT ALL DOWN. I TOLD YOU THE NEWSROOM WAS A STIR. HERE WE'VE GOT SOME OF THE REPORTERS BREAKING THINGS DOWN ON THE SECTOR BASIS. RICK DePALMA, MADISON MILLS AND DANNY RAMIREZ. BROOKE, YOU'RE WATCHING FOOD AS CONSUMERS GRAPPLE WITH HIGH GROCERY PRICES. >> CERTAINLY YET ANOTHER MONTH WHEN WE SAW OVERALL FOOD INFLATION SEE AN UPTICK MONTH OVER MONTH OF 0.1% COMPARED TO FLAT IN THE PREVIOUS MONTH. YEAR OVER YEAR CONTINUES TO SEE A DECELERATION BUT NOT A DECREASE HERE YEAR OVER YEAR OF 2.2%. WHEN YOU TAKE A CLOSER LOOK AT FOOD, THAT'S WHAT'S DRIVING THIS HIGHER FOOD INFLATION. THINK OF DINING OUT AT RESTAURANTS, AT BARS. THAT WAS UP 0.3% MONTH OVER MONTH. GROCERIES WERE UNCHANGED. SOME ITEMS WE ARE TRACKING IN PARTICULAR INCLUDE THE COST OF EGGS. WE DID SEE A JUMP MONTH OVER MONTH OF 4.6% LARGELY BECAUSE OF THE IMPACT OF BIRD FLU CASES POPPING UP AT SOME OF THE LARGEST EGG PRODUCERS HERE IN THE U.S. SUGAR AND SWEETS IS ALSO SOMETHING WE'VE BEEN TRACKING. THE PRICE OF COCO, SEE A MAJOR UP TICK AND DID TICK DOWN. BEEF AND VEAL UP SLIGHTLY. MANY EXPERTS TELLING ME THAT IS STICKING AROUND. OTHER ITEMS I DID SEE A JUMP IN PRICE, FRANKFURTERS, CHICKEN, RICE AND COFFEE. WE'LL TAKE A LOOK AT HOW THOSE PLAY OUT. I KNOW YOU'RE WATCHING ENERGY. WE SAW PRICES EASE EARLIER IN THE WINTER. WHAT DID WE SEE FROM THIS REPORT? >> YEAH, WE'RE STILL SEEING THE ENERGY PRICES RISING HERE, BUT THEY ARE RISING AT A SLOWER PACE HERE. SO IF YOU TAKE A LOOK AT THESE NUMBERS, MONTH OVER MONTH WE SAW 1.1% INCREASE IN ENERGY. THAT IS DOWN FROM THE 2.3% WE SAW IN THE PRIOR MONTH. THAT BRINGS THE OVERALL ENERGY INDEX UP TO 2.1% GROWTH. YEAR OVER YEAR HERE NOW, I WANT TO POINT OUT THAT THIS WAS A BEAT WHEN IT COMES TO WHAT WE WERE EXPECTING FROM THE ENERGY SECTOR. WE ARE SEEING A BROAD MINIMAL BEAT ACROSS A LOT OF THE DIFFERENT SECTORS WHEN IT COMES TO THE OVERALL CONSUMER PRICE INDEX. WHEN YOU LOOK AT THE OVERALL BROADENING, IT INDICATES BAD NEWS FOR THE FED. NOT JUST ONE SPECIFIC AREA. THE FED DOES STRIP OUT SHELTER AND ENERGY WHEN IT COMES TO THE SUPER CORE NUMBER. THAT IS HITTING 4.8%. THAT IS NOT WHAT THE FEDERAL RESERVE WANTS TO SEE. SHELTER AND GAS CONTRIBUTING OVER HALF TO THE OVERALL MONTHLY INCREASE WHEN IT COMES TO THIS CPI PRINT. AGAIN, THIS IS NOT A MASSIVE BEAT IN ENERGY BUT THE GENERAL HOTHEAD LINE-- HOT SHEADLINE. WHAT DO YOU HAVE? >> SHELTER COSTS REMAIN STICKY. THE RESULTS SHOW THAT IT'S SLOWLY EASING ON A YEARLY BASIS. SHELTER CAME IN AT 5.7%. SHELTER PEEKED LAST YEAR AT 8.2%. SHELTER POSTED A .4% GAIN. SHELTER COSTS ACCOUNTED FOR COSTS OF 60 PERCENT PERFECTION -- 60%. THERE ARE TWO COMPONENTS THAT HOLD THE BIGGEST WEIGHT IN THIS SHELTER FIGURE. THAT'S OWNERS EQUIVALENT RENT, OER. THAT'S THE RENT YOU WOULD GET. OER RENTED AT .4% MONTHLY GAIN. THE SECOND COMPONENT IS RENT WHICH LAGS REAL-TIME RENT DATA. THAT REACHED 4.1%. RENT PRICES ARE INCREASING MONTH OVER MONTH BUT STILL DOWN ANNUALLY. SO IS THIS INCREASE IN RENT PRICES SOMEWHAT CONCERNING? SOME ECONOMISTS SAY NO BECAUSE THE FED WANTS TO SEE REAL-TIME RENT DATA MOVE TOWARDS THE 2% INFLATION GOAL. BOTTOM LINE, THE HOUSING MARKET IS STILL RECOVERING AND THE TIGHT HOUSING SUPPLY IS PUSHING PEOPLE TO STAY IN THE RENTAL MARKET. SOME WALL STREET ECONOMISTS EXPECT SHELTER TO PLAY OUT BY SPRING OF NEXT YEAR. >>> WANT TO TAKE A LOOK AT THE REACTION WE'RE SEEING PLAY OUT IN THE MARKETS. THE FUTURES MARKET ON THE MOVE ON THE HEELS OF THIS HOTTER THAN EXPECTED PRINT. THIRD HOTTER THAN EXPECTED PRINT WE'VE GOTTEN FOR CPI. YOU CAN SEE THE HUGE MOVE TO THE DOWN SIDE FOR THE DOW FUTURES. NOW ON TRACK TO REMOVE THE DAY. WE TAKE A LOOK AT THE S&P FUTURES. THE DOWN SIDE, THE DIP ON TRACK TO OPEN 1%, OVER 1%. THE SAME IS THE CASE FOR NASDAQ FUTURES. WE TAKE A LOOK AT THE ACTIVITY WE ARE SEEING PLAY OUT IN THE BOND MARKET. THE 10-YEAR PRICES MOVING TO THE DOWN SIDE WHICH MEANS YIELD RATES SURGING ON THE HEELS OF THIS PRINT. THE SAME GOES FOR THE 2-YEAR AS WELL. YOU SEE THE DOWNWARD MOVE FOR THE 2-YEAR. RATES SURGING THERE. WHEN YOU TAKE A LOOK AT GOLD, WE'VE BEEN TALKING SO MUCH ABOUT GOLD. THE PRICING ACTION THAT WE HAVE SEEN OVER THE LAST SEVERAL WEEKS IN THE LEADUP TO THIS PRINT HERE. WE HAD SEEN A BIT OF A MOVE TO THE UP SIDE. HUGE MOVE TO THE UP SIDE AT RECORD HIGHS HEADING INTO THIS PRINT. YOU ARE NOW SEEING A BIT OF A MOVE TO THE DOWN SIDE. BRIEFLY DROPPED RIGHT AFTER THE REPORT WAS RELEASED BUT NOT TOO FAR FROM THE FLAT LINE AND TAKING A LOOK AT A LONGER TERM CHART WHEN IT COMES TO GOLD. YOU CAN OBVIOUSLY SEE THE FACT WE'RE NOT MOVING IN A BIT OF A REVERSAL FOR GOLD FUTURES. STEMMING OR AT LEAST HALTING SOME OF THAT UPWARD MOMENTUM WE HAVE SEEN IN THIS CHART HERE OVER THE LAST TWO MONTHS. REAL QUICK, I WANT TO TAKE A LOOK AT THE PRICE OF BITCOIN. CHECK IN ON THE PRICE OF BITCOIN ESPECIALLY ON THE HEELS OF A MOVE LIKE THIS. SEEING IN THE FUTURES MARKET, YOU CAN SEE THE DIP ON THE SCREEN AFTER THE CPI PRINT WAS RELEASED. YOU CAN SEE THE PRESSURE A BIT OFF. 4% RIGHT NOW BELOW 68,000. >>> THANKS SO MUCH, SHAWNA. MARCH INFLATION COMING IN HOTTER THAN EXPECTED. SHELTER CONTRIBUTING TO JUST OVER 1/3 OF THE CPI PRINT. LET'S DO A DEEPER DIVE WITH TIFFANY WALLEDMAN. TIFFANY, GREAT TO SEE YOU AS ALWAYS. WANT TO GET YOUR TAKE AWAYS FROM THE SHELTER COMPONENT AS REPORT AFTER REPORT WE CONTINUE TO SEE SHELTER BE THE INDEX THAT IS REALLY DRIVING MUCH OF THE STICKINESS IN THE INFLATIONARY PICTURE RIGHT NOW. >> YEAH. WELL, CERTAINLY SHELTER HAS COME DOWN I THINK MUCH MORE SLOWLY. SHELTER INFLATION, THAT IS. NOT THE ACTUAL PRICE LEVEL BUT SHELTER INFLATION HAS MODERATED MUCH MORE SLOWLY THAN I THINK MANY PEOPLE EXPECT. I THINK THE REASON FOR THAT IS THAT THE BLS WHEN IT'S MEASURING RENTS, IT IS NOT ONLY LOOKING AT WHAT WE CALL MARKET RENTS. THE SO RENTS OF LEASES AND HOMES THAT ARE LITERALLY CHANGING HANDS. THEY'RE TURNING OVER. THOSE NEW LEASES. BUT THEY'RE LOOKING AT THE AVERAGE RENT ACROSS THE ENTIRE RENTAL STOCK. SO THOSE FOLKS THAT ARE STAYING IN THEIR RENTAL UNITS OR THEY'RE RENEGOTIATING PRICES AFTER BEING IN THEIR RENTAL UNITS FOR SOME PERIOD OF TIME, THEY'RE ALSO CAPTURING THOSE. YOU DON'T HAVE A LOT OF REAL TIME OR REAL TIME GOOD DATA. ULTIMATELY WHAT WE KNOW IS THAT THE RENTS OF THE THINGS THAT AREN'T TURNING OVER ARE UNDER MARKET LEVELS. IN OTHER WORDS, YOU HAVE LANDLORDS STILL TRYING TO CATCH UP BY RAISING RENTS IN INCREMENTAL LEVELS, YOU KNOW, FOR THE FOLKS THAT STAYED IN THEIR PROPERTIES. AND THAT'S WHAT WE THINK IS CAUSING THE STICKINESS IN SHELTER. SO ALTHOUGH, YOU KNOW, YOUR MARKET RENTS MEASURES IN THE SUNBELT COMING DOWN ON A PRICE LEVEL, THEY LOOK LIKE THEY'VE MODERATED, THAT'S NOT FLOWING THROUGH TO THE BLS DATA. THE LARGE STOCK OF THE RENTAL UNITS IN THE COUNTRY STILL ARE BELOW THOSE LEVELS AND THEY'RE CATCHING UP. I THINK THAT'S ONE OF THE THINGS THAT PEOPLE ARE CERTAINLY MISSING. >> TIFFANY, WHAT DOES THAT THEN TELL US ABOUT FUTURE PROGRESS OR LACK THEREOF ON INFLATION. IS IT LIKELY WE'RE GOING TO GET STUCK AT THE ELEVATED LEVELS? >> YEAH. FOR THE SHELTER COMPONENTS WHAT IT SUGGESTS FOR US, YOU WILL STILL SEE MODERATION ON A YEAR-OVER-YEAR BASIS. WE'RE NOT CONVINCED THAT YOU'RE GOING TO GET BACK TO -- SO THE SHELTER COMPONENTS WERE RUNNING AROUND 3 TO 3.5% PRE-PANDEMIC. WE THINK IT'S GOING TO TAKE A WHILE TO GET THERE. THE FACT YOU HAVE A BROADER SHORTAGE OF HOUSING WITHIN THE HOUSING MARKET AS A RESULT OF YEARS OF UNDERBUILDING SUGGEST TO US AS WELL THAT YOU WILL PROBABLY SETTLE IN AT RENTAL INFLATION LEVELS THAT WERE ABOVE THOSE OF THE PRE-PANDEMIC PERIOD. SO WE'RE NOT CONVINCED THAT RENTS AND MODERATING RENTS ARE GOING TO GET YOU SUSTAINABLY BACK TO 2%. OF COURSE, ABSENT WEAKENING IN THE LABOR MARKET. ALL OF THE GAME KIND OF CHANGES HERE IF YOU START TO SEE THE UNEMPLOYMENT RATE MOVE UP, YOU START TO SEE JOB LOSSES. OF COURSE, YOU'LL GET MORE RENTAL DISINFLATION IN THAT PERIOD. ABSENT THAT, RENTS LOOK LIKE THEY'RE GOING TO CONTINUE -- RENTAL INFLATION IS GOING TO BE STICKY. ON THE HOMICIDE AND RENTAL SIDE, THERE'S A LOT OF PEOPLE WHO HAVE RENTS ARE WAITING TO GET COMPLETED. >> ONE OF THE INTERESTING THINGS IS THERE'S A BY IFURCATION SO N TO GET TOO WONKY. PEOPLE SINCE THE PANDEMIC HAVE HAD A PREFERENCE FOR A SINGLE FAMILY I GUESS MORE SUBURBAN TYPE OF STRUCTURE OUT OF LARGER CITIES. WHAT WE'RE SEEING IN THE RENTAL MARKETS NOW IS WHERE YOU'RE SEEING THE PRICING WEAKNESS IS IN THE MULTI-FAMILY STRUCTURES THAT HAD A LOT OF BUILDING POST PANDEMIC, SPECIFICALLY IN THE SUNBELT. IN SOME OF THESE, YOU KNOW, KIND OF MORE MEDIUM-SIZED CITIES THERE'S A LOT OF OVERBUILDING THERE. A LOT OF THAT SUPPLY IS NOW COMING TO THE MARKET AND IT IS RESULTING IN DISCOUNTED, YOU KNOW, ONE, TWO-MONTH PREDISCOUNTING OF RENTS WHEN YOU SIGN YOUR LEASE. BUT, HOWEVER, NEVERTHELESS, THAT WEAKNESS IN THE MULTI-FAMILY STRUCTURE CATEGORY, THAT'S NOT REALLY SPILLING OVER, YOU KNOW, IN LARGE DEGREE TO THE SINGLE FAMILY DETACHED CATEGORIES. SO EVERYTHING ELSE IS HOLDING UP PRETTY WELL. AND, AGAIN, THE BLS WHEN THEY'RE MEASURING THIS, THEY'RE CAPTURING THE BROADER RENTAL MARKET. THEY'RE NOT GETTING THE SINGLE OR MULTI-FAMILY STRUCTURES. YOU HAVE TO TAKE THIS INTO ACCOUNT AND AGAIN ALL OF THIS SUGGESTS TO US THAT THE BROADER SHAPE OF THE HOUSING MARKET, YOU KNOW, VERY FIRM, VERY STRONG AND YOU'RE GOING TO SEE THAT COME ACROSS IN JUST RENTS REMAINING STICKY AS WELL. >> ALL RIGHT. TIFFANY, ALWAYS APPRECIATE YOU GIVING US SOME INSIGHT, ESPECIALLY ON A DAY LIKE TODAY WHEN WE'RE SEEING REACTION IN THE MARKETS WITH A HIGHER THAN EXPECTED CPI PRINT. THANKS. >>> COMING UP, WE WILL DO A DEEPER DIVE INTO THE CPI PRINT. YOU'RE SEEING PRESSURE ACROSS THE BOARD. DOW FUTURES OFF AND AS WE'RE SEEING FUTURES DROP, YOU'RE SEEING YIELDS SOAR. TWO YEAR AND TEN YEAR SOARING TO THE UP SIDE. MORE ON THAT WHEN WE COME BACK. .. .. ♪ >>> IT'S 9:00 A.M. HERE IN NEW YORK CITY. I'M BRAD SMITH ALONGSIDE SEANA SMITH. THIS IS THE "MORNING BRIEF." >> WE HAVE A LOT OF GROUND TO COVER WEDNESDAY MORNING. FUTURES ARE FALLING SHARPLY. TREASURY YIELDS ARE JUMPING ON THE HEELS OF ANOTHER HOTTER THAN EXPECTED INFLATION PRINT. >>> AND DELTA AIR LINES BEAT WALL STREET EXPECTATIONS. I SPOKE WITH ED BASTIAN ON THE TRAVEL INDUSTRY'S RESILIENCE. AND WE'LL BRING YOU THAT INTERVIEW SHORTLY. >>> LET'S GET TO IT WITH THE THREE THINGS YOU NEED TO NO YAHOO FINANCE'S JENNIFER SCHONBERGER, JARED BLIKRE, AND MADISON MILLS HAVE MORE. >>> FUTURES DOWN THIS MORNING AFTER THE CONSUMER PRIDE INDEX CAME IN HOTTER THAN EXPECTED, FANNING FUELS OF MORE RATE CUTS. RAFAEL BOSTIC TOLD ME IN AN BEFORE VIEW ON TUESDAY IF INFLATION WERE TO STALL OR THE ECONOMY WERE TO ACCELERATE, THAT COULD MEAN PUSHING OUT THE POSSIBILITY OF RATE CUTS THIS YEAR. >> AT THIS POINT I THINK IT'S ONE. AS MONTHS PASS, I MAY MOVE TO TWO OR MORE TO ZERO. WE'LL HAVE TO SEE WHERE THE CHIPS FALL. A 70% CHANCE THE FEDERAL RESERVE WILL NOT CUT RATES. FIRST QUARTER RESULTS FLEW OVER WALL STREET EXPECTATIONS. THEY WERE DRIVEN BY A RESURGENCE IN CORPORATE TRAVEL. DELTA AIR LINES CEO ED BASTIAN ALSO SEES AN UPTICK IN THE SPRING AND SUMMER. >> THIS YEAR TO DATE WE HAVE SEEN THE HIGHEST BASE FOR THE COMPANY. AND IT'S GOING TO BE HEALTHY ON THE TRAVEL SIDE. >> DELTA IS THE FIRST AIRLINE TO REPORT FIRST QUARTER EARNINGS FOR 2024. >>> THE A.I. DARLING ENTERS CORRECTION TERRITORY, THE STOCK IS DOWN 10% FROM THE ALL-TIME HIGH, BUT SHARES OF NVIDIA STILL SURGING. IT'S 72% FOR THE YEARS, BUT LOOKING DOWN A LITTLE LIKE 2% IN THE PREMARKET MORNING. >>> TODAY'S TOP STORY, U.S. STOCK FUTURES SELLING OFF ON THE HOTTER THAN EXPECTED INFLATION PRINT, THE HEADLINE LIESING 3.5% OVER THE PRIOR YEAR. JOINING US NOW ON THIS, WE HAVE OUR VERY OWN ALEXANDRA CANAL. HEY, ALI. >> IT LOOKS FED OFFICIALS HAVE BEEN TELLING US, THE PATH DOWN TO 2% WILL CONTINUE TO SAY BUMPY. WE WERE JUST TALKING ABOUT OUR INTERVIEW WITH RAPHAEL BOSTIC, AND THESE ARE ALL AREAS THAT CONSUMERS FEEL DAY IN AND DAY OUT WHEN IT COMES TO THE FUTURE PATH OF INTEREST RATES, IT LOOKS LIKE IT COULD BE PUSHED OUT. ACCORDING TO FED FUTURES, JUST 20% ARE ANTICIPATING A CUT IN JUNE, DOWN 60% FROM WHAT WE SAW YESTERDAY. IT LOOKS LIKE WE MAY NOT SEE THE FIRST CUT UNTIL DECEMBER. RAPHAEL BOSTIC EXPECT ONE CUT IN THE QUARTER, BUT THE FED NAVIGATES INTEREST RATE CUTS, WHEN AND HOW MANY CUTS THEY SHOULD COMMIT TO. CLEARLY THIS DATA, ALONG WITH THE HOTTER HAS NOT EXPECTED JOBS REPORT, IT'S NOT GREAT NEWS FOR THE FED WHEN IT COMES TO THE CLARITY OF WHAT THEY SHOULD BE DOING. >> CERTAINLY NOT, AND IT'S A VERY TOUGH JOB THEY HAVE. THANK YOU SO MUCH, ALI. >>> THE MOVE LOWER COMES AS INVESTORS RECALCULATE THEIR EXPECTATIONS. THEY'RE CONTINUING SOME OF THE GAME WE SAW LAST YEAR, THE S&P AT LEAST YEAR TO DAY UP ABOUT 9% AHEAD OF TODAY'S OPEN. DESPITE THE UNCERTAINTIES, OUR NEXT GUEST IS SAYING HE THINKING THE S&P 500 HAS MORE ROOM TO RUNG. HE HAS THE HIGHEST YEAR-END S&P TARGET ON THE STREET. CHRIS HARVEY JOINS US, WELLS FARGO HEAD OF SECURITIES, SO BEFORE WE DIVE BOO YOUR YEAR-END TARGET, JUST YOUR QUICK REACTION TO THIS PRINT AND WHAT THIS MEANS AT LEAST IN THE NEAR TERM. >> OBVIOUSLY IT'S A PRETTY UGLY REACTION, BUT SMALL CAPS ARE DOWN THE MOST. FOR US, THIS IS A PER VERSE STATEMENT. WE WANT THE FED TO GO SLOWER. THAT KEEPS THE STATUS QUO IN PLACE. IT WANTS THE STATUS QUO. WE CAN WORK HIGHER FROM HERE. WE NEVER THOUGHT THE FED WAS GOING TO GO IN THE FIRST HALF, BUT THE BIG AND IMPORTANT THING IS THE FED WILL START A MULTI-YEAR EASING CYCLE. WHEN AND HOW MUCH AND SO ON AND SO FORTH, BUT IT'S A MULTI-YEAR PSYCH MANY. 2021 WAS A GREAT YEAR, WITH TOO MANY ACCOMMODATION, BUT IT RAN INTO A BUZZSAW IN 2022, BECAUSE THE FED GOT VERY AGGRESSIVE. I MEAN, AS OF RIGHT NOW, THERE'S A PAUSE, BUT THERE'S GOT TO BE A PIVOT AND PORTFOLIOS HAVE TO ADJUST. >> WE'RE SAYING IT'S A GROWTH MARKET. THIS WHOLE BELIEF THAT THAT GROWTH IS SUDDENLY GOING TO EXPLODE? NOT TRUE. THE ECONOMY IS BETTER THAN EXPECTED, BUT IT'S NOT VERY STRONG. SO YOU WANT A IMBALANCED APPROACH, WE'RE TELLING PEOPLE TO BE OVERWEIGHT, BUT YOU BALANCE THAT WITH SOMETHING DEFENSIVE. SO WE'LL SEE A FURTHER MOVE TO THE UP SIDE? >> IT DOESN'T. WE'VE BEEN SURPRISED IT'S BEEN SO PLACID, AND YOU GET SOME VOLATILITY IN THE FIRST HALF. MAYBE THIS IS IT. IT UPSETS THE MARKET, BUT THAT'S FINE FOR US. WE THINK THE STATUS QUO IS HERE. THE FED IS GOING TO BE CUTTING FOR A LONG PERIOD OF TIME, AND WE MAY SEE AN ACCELERATE IN M&A ACTIVITY RELATED TO SOME OF THE ELECTION CHANGE. >> WE'RE STARING DOWN A FRESH EARNINGS SEASON. WHAT IS THE THEME THAT PREVAILS OFF PRINTS LIKE THIS? >> I DON'T THINK I DON'T THINK YOU WANT TO GO OUT TOO FAR. AND PLACING IS STILL OKAY, THE ECONOMY IS STILL OKAY. THEY'LL GIVE YOU SOME RISK, SOME REWARDS, BUT IT WON'T BE ANYTHING. YOU DON'T GET PAID TO BE TOO AGGRESSIVE AT THIS JUNCTION FURTHER. IF WE HAVE A SELL-OFF, I THINK THAT WILL HELP IMPROVE THINGS, BUT DON'T EXPECT FIREWORKS AT THIS POINT IN TIME. >> CHRIS, ONE OF THE RISKS THAT YOU BROUGHT UP WAS ELEVATED YIELDS. NOT EXACTLY AT THE LEVELS YOU WERE TALKING ABOUT IN THE NOTE, BUT WE'RE SEEING A HUGE MOVE TO THE UP SIDE. WHAT KIND OF PRESSURE DOES THAT ULTIMATELY PUT ON MARKETS. WHEN YOU'RE TALKING ABOUT THAT LEVEL YOU ARE LOOKING AT, WHAT IS THAT LEVEL? >> I THINK YOU HAVE TO BRING RATES TO 5%, KEEP THEM THERE FOR A LONG PERIOD OF TIME. THIS IS A MOMENTUM MARKET NOT JUST IN EQUITY, BUT ALSO IN RATES. WHEN RATES START TO BACK UP, THEY CAN GAP HIGHER. THAT'S A CONCERN, BUT THEY HAVE TO STAY THERE. WE JUST DON'T SEE ENOUGH TO STAY THERE. INFLATION IS ULTIMATELY COMING DOWN. THE MORE TIME YOU ADD, THE MORE WILL COME DOWN. 2% I THINK IS ASPIAASPIRATIONAL. 5% I THINK IS THE HIGH. I DON'T THINK WE STAY THERE, BUT INFLATION IS STILL COMING DOWN IN A LOW-GROWTH ENVIRONMENT. >> YOU MENTIONED HEALTH CARE, WHAT IS THAT TOP SECTOR? >> THE TOP SECTOR IS COMMUNICATION, WHAT WE USE IN HEALTH CARE OR UTILITIES. IT'S A BARBELL, RIGHT? WE'RE GOING TO GET SOME STRESS IN THE MARKETPLACE. YOU WANT SOMETHING TO BALANCE THAT OUT, AND HEALTH CARE IS THERE. IT'S A GOOD VALUATION. IT'S BEEN BEATEN DOWN. IN TIMES OF STRESS IT WORKS GENERALLY PRETTY WELL. >> CHRIS, WHEN YOU WERE TALKING ABOUT THE FACTORSES THAT COULD DRIVE THE UPPER MOMENTUM, YOU MENTIONED INCREASED M&A ACTIVITY ON THE HEELS OF THE ELECTION, AND IN TERMS OF THE ACTIVITY, IF WE SEE A CHANGE, WHAT WOULD THAT LOOK LIKE? >> IF THE GOP TAKES THE SENATE, AND IT LOOKS LIKE BETTER THAT A COIN TOSS THAT THEY WILL, A LOT OF REGULATION -- NOT SO MUCH THAT REGULATION COMES OUT OF THERE, BUT THE GOP IS MORE MARKET FOCUSED, IT'S LESS REGU REGULATORY, SO YOU WOULD EXPECT A LOT MORE ACTIVITY ON M&A IF A GOP CONTROLS THE SENATE. >>> CHRIS HARVEY FROM WELLS FARGO, JOINING US IN STUDIO, THANKS FOR THE TIME. >> ABSOLUTELY. >>> SHIFTING GEARS TO THE BIG EARNINGS REPORT, SHARES OF DELTA AIR LINES ARE MOVING HIGHER AFTER POSTING BETTER THAN EXPECTED RESULTS ON THE TOP AND BOTTOM LINE. >> TAKE A LISTEN. WE HAVE MADE SOME STRONG DEMAND AS IT CONTINUES. IT'S CONTINUED INTERNATIONALLY AND DOMESTICALLY. >> AND THAT'S A STRONG PREDICTOR, IT'S GOING TO BE PRETTY HEALTHY ON THE TRAVEL SIDE. >> WE'VE GOT STEVE TRENT, I MEAN, WHAT WAS SOME OF THE MAJOR THINGS, THE CATALYST THAT STOOD OUT FROM YOU IN THIS REPORT? >> IT WAS VERY IMPRESSIVE, WELL BEYOND MAIN CAP EX. I THINK THAT'S ONE OF THE DISTINGUISHING FACTORS WE'RE SEEING, FOR EXAMPLE, WITH THE NETWORK AIRLINES AND WE'RE LESS SANGUINE ON THE LATTER GROUP. >> WHAT IS DELTA SPECIFICALLY DOING TO BETTER POSITION THEMSELVES? THOUGH THERE IS RIGHT HERE, WHAT IS GIVING EL -- >> YEAH, ABSOLUTELY. I WOULD SAY, IT'S A PLACE THAT'S DONE VERY WELL FOR THEM. THEY HAVE ALSO DISTINGUISHED THEMSELVES SIGNIFICANT LY FROM AMERICAN EXPRESS, ESPECIALLY IN THE LATTER SEGMENT, THEY ARE OUTPACING EVERYBODY ELSE. THAT'S THE ONLY U.S. CARRIERS THAT DIDN'T DILUTE ITS SHAREHOLDERS. I THINK THEY STRATEGY ARE PAYING DIVIDENDS, YOU KNOW, SO YOU LOOK AT THE CONFLUENCE OF THESE FACTORS, IT'S A VERY POSITIVE PICTURE. >>> BOEING IS AN AIRLINE THAT COULD HAVE EASILY SAID WE'LL DIVE INTO THE MAX AND MAKE A BIG PURCHASE ORDER. THEY DIDN'T. THEY WAITED UNTIL THE MAX 10. IS THE SIGNIFICANT THE HOW IS THE FACT THAT THEY ARE NOT A COMPANY THAT HAS THE MAX IN THEIR FLEET? THEY'VE BEEN VERY GOOD ABOUT FLEET PLANNING WE DON'T HAVE ENOUGH EQUIPMENT. WE SEEM TO HAVE THE CREW ISSUE UNDER CONTROL AT THIS POINT THEY HAVE BEEN VERY GOOD ABOUT MAINTENANCE. THEY HAVE A NICE DELTA TECH OPS FACILITY. I'M SURE THAT'S HELPING OUT NICELY. I WOULD SAY THEY HAVE NOT TAKING A KNEE-JERK REACTION. I THINK THE DEARTH OF CAPACITY TO DATE WILL POSSIBLY PUT UPWARD PRESSURES ON FARES, WHICH IS MAYBE NOT 100% GOOD NEWS FOR CONSUMER, BUT IT'S VERY PROMISING. >> ED ALSO SHARED OPTIMISM WITH THE RELATIONSHIP. WHAT WOULD YOU LIKE TO SEE WITH THE NEW CEO AS THE REST OF THE INDUSTRY EVALUATION WHO THAT FIGURE IS? >> I WOULD SAY FROM THE AIRLINES SIDE, WHAT PEOPLE DEFINITELY WANT TO SEE IS RESTORATION OF CONFIDENT. WE'VE HAD SEVERAL INCIDENTS, OF COURSE, WITH MECHANICAL MISHAPS ON FLIGHTS AND EMERGENCY LANDINGS, THIS KIND OF THING. FROM A STATISTICAL PERSPECTIVE THESE ARE NOT NECESSARILY SORT OF A HIGHER AMOUNT OF MECHANICAL ISSUES THAN YOU USUALLY HAVE, BUT THE OPTICS ARE BAD. SO, I THINK WE NEED TO, IN THAT CASE FROM THE SUPPLIER PERSPECTIVE, GIVE THE GROUP SOME CONFIDENCE THAT THEY HAVE RIGHTED THESHIP. AT THE SAME TIME THAT'S SOMETHING THAT SHOULD HELP THE CONSUMER BEING MORE COMFORTABLE WITH FLYING. >> STEVE, THANKS SO MUCH. >> MY PLEASURE. >>> LET'S GUESS TO A STOCK WE ARE CLOSELY WATCHING HERE, THAT'S NVIDIA A CLOSER LOOK AT THE PRICING ACTION IS MADY. >> I JUST GOT OFF THE PHONE WITH STEVES ON NICK. HE TOLD ME THEY DON'T GROW TO THE SKY. THIS IS GOING TO BE A NORMAL THING TO EXPECT. WHY THIS DEGREE OF PULLBACK? IT COULD BE A COUPLE REASONS, ONE OF THEM BEING WE ARE SEEING SOME COMPETITORS COMING INTO THE SPACE, A COMPETITOR AND THINK I WOULD LOVE TO GET IN ON THAT? INTEL HAS NOT MADE CLEAR WHO THE PURCHASERS WILL BE SO I THINK THEY'RE WAITING ON THE BIG-TICKET NAMES. ALSO, COMING UP ON MOPPED, WE HAVE OUR TAXES DUE AND THE RETURNS THEY HAVE GOTTEN YEAR TO DATE FROM THEM, A BIT OF PROFIT TAKING AS THEY HAVE THOSE BILLS DUE ON MONDAY HERE. >> TAIWAN WHAT DO WE KNOW ON THIS, MADY? >> TSMC, THIS IS A FOREIGN FIRM, BUT THEY ARE GETTING SOME FUNDING FROM THE CHIPS ACT, PLANNING TO SPEND $65 BILLION ON THE THIRD PLANT OVERALL. THE KEY KIND OF CRITICISM OF TSMC IS THAT A LOT OF THEIR MANUFACTURING IS FOCUSED IN TAIWAN. WE SAW THAT WAS AN ISSUE FOLLOWING THE EARTHQUAKE LAST WEEK, BUT THEY ARE STARTING TO TRY TO WORK ON THAT AND DIVERSIFY. THEY HAVE A FAB OPENING UP IN JAPAN. THAT LEADS TO A BIT OF DIVERSIFICATION THERE, BUT WE KNOW THE CHIPS MARKET IS SUPPLY CONSTRAINED. SO IT MAKES SENSE TO SEE SOME OF THE OTHER PLAYERS AND THE COMPETITION BEEFING UP. >> MADY, THANKS SO MUCH, CHECKING ALL THINGS CHIPS. THE COMMENT ABOUT THE TREES NOT GROWING TO THE SKY, THAT'S GETS SOME PLAY HERE IN THE SLACK CHANNEL. >> THANKS, MADY. >> THANKS. >>> WE'LL DIVE INTO MORE ABOUT THE FED THROUGHOUT THE HOUR. >>> PLUS, BOEING'S CRISIS DEEPENS WITH SCRUTINYIE ON THE BOEING 777. >>> JACK MA COMES OUT OF THE SHADOWS. >>> A BOEING WHISTLE-BLOWER HAS FILED A CLAIM ABOUT THE BOEING 777. >> I HAVE CONFIDENCE IN THE COMPANY. IT'S A STRONG COMPANY, AN IMPORTANT COMPANY. I STILL HAVE CONFIDENCE IN THE COMPANY. I THINK WE ALL KNOW IT'S GOING TO TAKE SOME TIME BEFORE THEY GET THE OVERALL LEVEL OF QUALITY AND PRODUCTION WHERE IT NEEDS TO BE, AND THE BOARD THERE DECIDED TO MAKE A CHANGE IN THE LEADERSHIP. >> I HAVE A LOT OF CONFIDENCE IN STEVE. I KNOW HIS PERSONALLY. I THINK IT'S A GOOD CHOICE FOR THE CHAIR AND I'M CONFIDENT HE'LL BE A GOOD LONG-TERM LEADERS FOR THE ORGANIZATION. >> YOU DO HEAR MANY OF THE AIRLINE EXECUTIVES INCLUDED REITERATING HOW IMPORTANT BOEING IS TO THE LARGE PLANE MANUFACTURING IN THE WORLD HERE, AS 90% OF THE LARGE PLANE ORDERS, ACCORDING TO DATA FROM TEAL GROUP RESOURCE, COMES IN FROM BOEING AND AIRBUS. SO BOEING GETTING THIS RIGHT AND THE COMPANIES AND AIRLINES CONTINUING TO SHOW CONFIDENCE IN THEM, AT THE SAME TIME THEY'RE LOOKING FOR ANSWERS AS WELL HERE, TRYING TO MAKE SURE THAT A LOT OF THE ISSUES THAT HAVE IMPACTED EVEN THEIR OWN ORDERS GET RECTIFIED IN THE VERY NER TERM. >> RIGHT NOW THEY STILL HAVE THE CONFIDENCE OF AIRLINE LEADERS, BUT I THINK THERE ARE LOTS OF QUESTIONS LOOKING AT THE REACTION, THEY ARE NOT CONVINCED THAT THE TROUBLES ARE OVER. YOU LOOK AT THE CHART, IT SHOWS THAT SHARES HAVE BEEN UNDER, AND LOSSES JUST OVER 30%, ONE OF THE WORST PERFORMERS WE HAVE SEEN THIS YEAR. IT DOES BEG THE QUESTION WHAT IT WILL TAKE TO GET INVESTORS BACK ON BOARD. WHEN YOU HAVE A REPORT LIKE THIS, OR WHISTLE-BLOWER REPORTS, IT BRINGS UP MORE QUESTIONS, AND NOT EVEN TO BRING UP LEADERSHIP CHANGES WE'RE GOING TO SEE, A NUMBER OF REGULATORY ACTION WE WILL LIKELY SEE OVERSIGHT, AT LEAST IN THE NEAR TERM. >> I WAS LOOKING AT THE EXTENDED HOURS TRADING. WE COULD HAVE A NEW 52-WEEK LOW TODAY FOR BOEING. WE'RE WATCHING THAT IN PREMARKET TRADING. >>> ALI BABA SHARES ARE MOVING TO THE UP SIDE. JACK MA'S MEMO, BUCKING THE DOWNWARD TREND, WRITING THAT THE COMPANY WAS, QUOTE, RETURNING AGAIN FROM AN ORGANIZATION THAT MAKES DECISIONS SLOWLY BACK TO THE HIGHEST LEVELS OF EFFICIENCY, AND WHY IS THIS SIGNIFICANT? HE'S RETURN FROM SECLUSION FOR JUST THE SECOND TIME IN SEVERAL MONTHS. HE'S NOT SUPPORTING THE EFFORTS OF THE LEADERS HERE, AND THIS IS A BIT OF A DIFFERENT TONE, AND LAST TIME HE EMERGED, CRITICIZING THE DIRECTION OF ALI BABA, AND NOW HE'S SAYING HE THINKS ALI BABA IS ON TRACK? >> IT'S LIKE TRYING TO A TRACK PEPE SYLVIA AT THIS POINT? WE'LL SEE IF THAT ULTIMATELY PAYS OFF HERE, BUT SHAREHOLDERS HAVE TO BE WONDERING, WHAT IN THE SUM OF THE REMAINS HERE FOR ALI BABA, AS THEY WERE TALKING ABOUT SPLITTING UP INTO SIX DIFFERENT ENTITIES. WHAT THE INVESTORS ARE ACTUALLY GETTING A SHARE OF, WHAT ARE THEY GETTING EQUITY IN? >> TALKING ABOUT E-COMMERCE, CLOUD AND A.I. >>> COMING UP, WE'RE MINUTES AWAY FROM THE OPENING BELL, LOOKING AT THE HOTTER THAN EXPECTED INFLATION DATA. DOW IS OFF ABOUT 400. WE'LL BE RIGHT BACK. >>> OH, YEAH, WE'VE GOT A GOOD LOOK AT THE OPENING BELL, WHERE YOU HAVE WHAT LOOKS LIKE THE CYBERSECURITY -- NATIONAL SECURITY INDEX RINGING THE OPENING BELL AT THE NASDAQ. AT THE NEW YORK STOCK EXCHANGE, YOU HAVE, OKAY, PRONUNCIATION ANA, OR AND -- AYUNA. WE'LL GET CLARIFICATION. A NICE FLAG THEY HAVE GOING ON OVER THERE. >>> WE HAVE A LIVE LOOK AT THE WI-FI INTERACTIVE AND CHARTS HERE. THIS IS ALL, OF COURSE, COMING AFTER THE MARCH CPI PRINT, IMPACTING THE MAJOR AVERAGING THIS MORNING, SEANA. >> THE S&P IS ALSO MOVING TO THE DOWN SIDE. YOU CAN SEE THAT DROP RIGHT HERE RIGHT TO THE SCREEN. IT'S BEEN A COUPLE DAYS HERE, IN THE VARIATION OF THE PRICING ACTION, WHEN YOU LOOK AT THE NASDAQ, IT'S OPENING THE DAY OFF, ABOUT 1.2%. LET'S SEE WHAT WE'RE SEEING IN THE BOND MARKET YIELDS, SHOOTING TO THE UP SIDE. TEN-YEAR YIELDS ARE UP, SO CRITICAL ACTION TO LOOK FOR HERE. WHEN YOU LOOK AT SOME OF THE REACTION IN THE BOND MARKET, AND THE SECTOR ACTION -- BRAD, I HIT THE SCREEN. I DIDN'T MEAN TO. CONSUMER DISCRETIONARY, THE LIST GOES ON, BUT THIS REALLY PAINTS TO THE BROADER MARKET PRESSURE WE ARE SEEINGS ACROSS THE BOARD ON THE HEELS OF THE FACT THAT INFLATION IS PROVING TO BE MUCH MORE STICKY. >> HOW DO I GET ON THE RED LISTSERV. >>> WE HAVE A DEEPER DIVE INTO THE MARKET ACTION. JARED BLIKRE IS STANDING BY. I'M GOING TO ADD YOU TO THAT LISTSERV RIGHT AFTER THIS. WE HAVE THE EXTENT-YEAR T-NOTE YIELD SCREAMING HIGHER. THE MARKETS HAVE ACTED TO THE CPI IN PARTICULAR OVER THE LAST YEAR AND A HALF IN THIS BULL MARKET. LET'S LOOK AT SOME OF THE LEADERS HERE. WE CAN ALSO SEE ANOTHER SEA OF RED. IT LOOKS LIKE BETS ARE IN THE GREEN, CHINESE STOCKS BARELY IN THE GREEN, BUT FOR THE MOST PART A LOT OF DOWNSIDE ACTION. YOU HAVE VALUE, CYCLICALS GOING DOWN IN LOCKSTEP. HERE'S THE NASDAQ 100, NOT A LOT OF DARK RED. THIS IS NOT A DISASTER, BUT CERTAINLY NOT BULLISH, PINDUODUO, THE LONE GREEN SQUARE RIGHT DOWN THERE. JUST CHECKING IN, I WANT TO LOOKAL ALPHABET, A BIT LONGER-TERM LOOK. THIS STOCK JUST BROKE TO RECORD HIGHS. YOU'VE GOT TO THINK IT'S PROBABLY DUE FOR SOME HIGHER PRICES, THOUGH TODAY TAKING A BIT OF A BACKSEAT THERE. LET'S LOOK INSIDE TECH HERE. WE'RE GOING TO LOOK AT SEMICONDUCTORS, ASIAN STOCK, THAT'S IN THE GREEN, BUT FOR THE MOST PART, WE'RE SEEING RED HERE. NVIDIA AT A ONE-MONTH LOW. TAKING A LOOK AT SOFTWARE, TOO, SOFTWARE LOOKING WEAK, AND FINALLY UNPROFITABLE TECH. THAT'S ANOTHER DISASTER IN THE MAKING HERE. I DON'T WANT TO SEND EVERYBODY OFF TO TOO BEARISH A NOTE, BUT VERY BEARISH TO BEGIN THE DAY. >> JARED, THANKS SO MUCH. >>> LET'S LOOK AT THE PRICE OF GOLD. YOU HAVE GOLD FUTURES HAVE BEEN SEEING A LOT OF MOVEMENT HERE IN EARLY ACTION, NOW TRADING TO THE DOWN SIDE. THIS COMES AFTER THE PRECIOUS METAL HAS HIT NINE CONSECUTIVE TRADING DAYS. AFTER TODAY'S CPI PRINT SHOWS THAT PRICES REMAIN ELEVATED, TRADERS ARE NOW STARTING TO HEDGE THEIR BETS, WHILE THE PATH TO RATE CUTS REMAINS MURKY. WE WANT TO BRING IN FRANCISCO BLANCH, HEAD OF COMMODITIES AND DERIVATIVES RESEARCH. GREAT TO HAVE YOU HERE. WHEN YOU LOOK AT THE TIME PRICING ACTION WE HAVE SEEN IN GOLD SINCE THIS PRINT CAME IN JUST A BIT HIGH, YOU HAVE GOLD RETREATING. WHAT DOES THIS GIVE US A SENSE OF, IN TERMS OF HOW THE GOLD BULLS ARE LOOKING AT THIS PRINT? >> HEY, SEANA, THANKS FOR HAVING ME. WE SEE A TREMENDOUS GOLD BUYS ON CENTRAL BANKS AND RECENT GOLD BUYS IN CHINA. I THINK WE HAVE TO DISTINGUISHES THE KIND OF TEMPORARY CYCLICAL RATE FACTORS GOINGS FROM WHAT'S MORE STRUCTURE, AND I THINK THERE'S A BIG STRUCTURE TREND DRIVEN BY THE MAJOR POLITICAL FRACTURE IN THE WORLD TODAY. IT'S REALLY BEEN CENTRAL BANKS. IT HAS BEEN BEHIND THE MENTALITY OF THE GOLD MARKET. HAVING SAID THAT. PEOPLE MAYBE HAVE GOTTEN TOO EXCITED, AND THE EXPECTATIONS OF INTEREST RAITT CUTS WAS MAYBE ADDING MORE LONG TO THE GOLD TRADE. THAT'S THE STORY. INFLATION PRINTS HOTTER THAN EXPECTED, MAKING THE FED LESS LIKELY TO CUT IN JUNE. THERE'S BETTER ALTERNATIVES YIELDING HIGHER RETURNS. THAT'S, I THINK, THE BATTLE, IF YOU LIKE, THAT WE ARE SEEING EVERY DAY. >> WHAT IS THE PATHWAY FOR GOLD, THEN, IF WE DON'T SEE THE FEDS CUTTING RATES UNTIL LATE THIS YEARS, OR EVEN EARLY NEXT YEAR, THE BULK OF THOSE CUTS COMING? >> WELL, FOR STARTERS, BANK OF AMERICA, WE HAVE THREE RATE CUTS PAST THAT. WE'RE STILL CALLING FOR A RATE CUT IN JUNE, TWO MORE IN THE SECOND HALF OF THE YEAR. BASED ON THAT WE THINK GOLD PRICES CONTINUE TO GO HIGHER, BUT THE. THERE'S DEFINITELY A CHALLENGE FOR THE GOLD MARKET, OR AS SOME PEOPLE HAVE CLAIMED, IF THE FED HIKES RATES, IT WOULD BE BAD FOR GOLD POSITIONING. WE HAVE SEEN REFLECTION OF THAT IN THE CURRENCY MARKETS. AS SOON AS THE INFLATION PRINT HAS COME OUT. IT'S ALSO THE FACT THAT HIGHER INFLATION IN THE U.S. LEADS TO PERSISTENTLY HIGHER STRONGER DOLLAR, AND THEREFORE MAKES ASSETS LIKE GOLD LESS VALUABLE. THERE'S A RISK THAT HAVE GOLD TRADE, AS YOU POINTED OUT IS THE FED POTENTIAL HIKES. >> HOW MUCH PRESSURE COULD WE POTENTIALLY SEE? >> CENTRAL BANKS WILL NOT CHASE THE GOLD HIGHER. THEY'LL BE BUYS THE DIPS. HERE WE ARE LOOKING AT THE CYCLICAL ELEMENTS, WHICH ARE CONNECTED TO THE RATES AND EFFECT CYCLE VERSUS THE STRUCTURAL ELEMENTS WHERE ARE DRIVEN, IN OUR VIEW, BY THE RUSSIAN CENTRAL BANK ASSETS WERE FROZEN AFTER THE UKRAINE WAR STARTED, THE FACT WE'VE HAD SOME MAJOR, MAJOR POLICY MISTAKES IN THE LAST FEW YEARS THAT LED TO THIS INFLATION WAVE. THE BUYERS OF THOSE EUROPEAN GOVERNMENT AND U.S. TREASURIES ARE A LITTLE WORRIED ABOUT IT, TO PUT IT MILDLY. >> THEN GOING FORWARD FROM HERE, WHAT OTHER COMMODITIES DO YOU LIKE OUTSIDE OF GOLD? >> WE THINK OIL IS COMING UP INTO THE SUMMER MONTHS, WILL KIND OF TOP OUT AROUND $95-PLUS A BARREL. WE'LL SEE. OPEC HAS A STRONG GRIP ON THE MARKET. IT'S GOING TO BE ANOTHER BUMPER TRAVEL SEASON JUST LIKE THE LAST TWO SEASONS POST-COVID. PEOPLE WANT TO TRAVEL AND SPEND MONEY. WHAT WE REALLY LIKE AT THIS STAGE IS COPPER. WE THINK THE COPPER SUPPLY CRISIS IS HERE. WE ALSO THINK THAT COPPER WILL RIP TO AROUND $12,000 PER TON INTO NEXT YEAR. NOW, THE COPPER STORY IS CYCLICAL WITH LOWER RATES POTENTIALLY SUPPORTING THE MARKETS HIGHER, AND A RESTOCKING CYCLE, RIGHT. THERE'S ALSO THE STRUCTURAL ELEMENT TO COPPER, WHICH IS THE ENERGY THAT'S SINCE, THE NEED TO UPGRADE THE GRIDS. THEY NEED TO BE UPGRADED TO MAKE THEM FRIENDLIER TO THE APPLICATION OF THE WAVE OF ELECTRIC VEHICLES THAT HAVE STARTED BACK. >> A MASSIVE RUN, IT'S CERTAINLY BEEN ASTOUNDING TO WATCH. FRANCISCO, GOING BACK TO WHAT YOU SAID A MINUTE AGO ABOUT CRUDE, AND THE GAINS WE COULD SEE HERE GOING INTO THE SUMMER SEASON. THE BIGGEST FACTOR, IS IT DEMAND OR SUPPLY, GIVEN THE FACT WE ARE SEEING AN INCREASE IN GEOPOLITICAL TENSIONS. >> FOR THE FIRST TIME IN A LONG TIME, THE TENSIONS HAVE CREATED MOMENTUM. THE SHIPS HAVE TO TRAVEL FASTER BY VIRTUE INTO MUCH GOING LONGER JOURNEYS, YOU HAVE TO SPEED UP THE SHIPS. THAT'S A GOOD CHUNK OF THE UPGRADE IN THE LAST SIX MONTHS OR SO, HAVING COME FROM THAT. I WOULD SAY AS MUCH AS HALF OF THE RE-RATING IN OIL CONSUMPTION GROWTH RATES HAS COME FROM THAT. THERE'S A CYCLICAL ELEMENT. WHY IS THE FED NOT POTENTIAL NOT CUTTING RATES IN JUNE? IT WILL BE, BECAUSE THE ECONOMY IS BETTER, INFLATION IS STICKIER. SO THERE'S THAT ELEMENT, BUT I DON'T THINK THERE'S A MASSIVE SUPPLY STORY IN TERMS OF SUPPLY LOSSES PRESIDENT OPEC HAS DEFINITELY CONVINCED OTHER MEMBERS, WE'VE SEEN SAUDI PUSHING THE ENVELOPE HERE, GETTING OLDER MEMBERS TO CONTRIBUTE REDUCTIONSES IN SUPPLY IN LINE WITH THE AGREEMENTS THAT WERE MADE IN THE MONTH OF DECEMBER WHEN AN LEANG LEFT THE GROUP WITH A SPLASH. >>> FRANCISCO, BANK OF AMERICA SECURITIES HEAD OF COMMODITIES AND DERIVATIVES RESEARCH, THANK YOU FOR TAKING THE TIME. >> THANK YOU. >>> COMING UP, WHILE THE GREATER OPPORTUNITY STILL REMAINS IN EQUITIES. ACCORDING TO OUR NEXT GUEST, WE'LL DISCUSS AFTER THE BREAK. >>> MARKETS ARE SELLING OFF THIS MORNING, ALL MAJOR AVERAGES ARE LOWER OFF MORE THAN 1%. YOU CAN SEE THE DOW NOW OFF NEARLY 500 POINTS. NOW INVESTORS ARE WORRIED ABOUT THE PATH FORWARD FOR INTEREST RATE CUTS. WE HAVE TO BRING IN PENNY PENNINGTON. THE THIRD MONTHS IN A ROW OF A PRINT THAT SHOW YOU CONSUMER PRICES REMAINING ELEVATED HERE, MUCH STICKIER THAN WHAT THE STREET HAD BEEN FORECASTING. >> OUR FINANCIAL ADVISERS ARE MEETING WITH OUR CLIENTS RIGHT NOW. THEY IMMEDIATE WITH 500,000 CLIENTS, SO YOU'RE RIGHT TO ASK WHAT INVESTORS ARE THINKING ABOUT. WHAT THEY'RE ASKING ABOUT RIGHT NOW, WHAT DOES THIS DO TO MY MEDIUM AND LONG-TERM PLAN? HOW DO WE THINK ABOUT THAT IN LIGHT OF WHAT IS LIKELY TO HAPPEN, WHICH IS WHAT THE FED HAS BEEN CONVEYING, HIGHER INTEREST RATES FOR A BIT LONGER, COUNTER. PI INFLATION IS PRETTY STICKY RIGHT NOW. WE SAW SOME GOOD MODERATION, RIGHT? WE'VE SEEN OTHER PRICES GO UP, ESPECIALLY THE THINGS THAT OUR CLIENTS ARE SPENDING MONEY ON, LARGER TICKET ITEMS, EXPERIENCING. WERE YOUR PREVIOUS GUESTS TALKED ABOUT HOW THIS WILL BE A BUSY TRAVEL SUMMER. >> DOES IT AFFECT THE WAY THEY'RE SAVING? >> SURE IT DOES. ONE OF THE THINGS WE'RE SAYING THAT'S VERY INTERESTING IS RETIRED INVESTORS, INVESTORS WATCHING YOUR SHOW, THEY'RE SPENDING ON BIGGER TICKET ITEMS. THEY'RE TAKING THEIR FAMILIES, THREE GENERATIONS TO ITALY, OR ON THAT DREAM VACATION? >> DO THEY NEED A FRIEND TO GO WITH? [ LAUGHTER ] >> THE WAY THEY'RE SPENDING AND INVESTING IS EFFECTIVE. ONE OF THE QUESTIONS -- SHOULD I BE GETTING THE KINDS OF RETURNS WE'VE SEEN IN THE S&P 500 SINCE LAST OCTOBER? SHOULD I BE SEEING 25% RETURNS IN MY PORTFOLIO? ONLY IF THAT'S THE RISK APPEAR TIDE YOU HAVE, ONLY IF YOUR GOALS ARE LONGER TERM IN NATURE, BUT WE'RE TALKING TO OUR CLIENTS ABOUT SHORTER-TERM GOALS, BAFFLING THOSE WITH LONGER-TERM GOALS. WHAT THIS MEANS FOR THEIR SPENDING AND SAVING, SHORT, MEDIUM AND LONGER TERM. >> DOES THIS CHANGE THE UNDERPINNINGS OF THE BULL MARKET? >> THIS HAS BEEN A QUITE FROTHY MARKET. WE DO EXPECT VOLATILITY. VOLATILITY CREATED BY THIS KIND OF CPI REPORT, AND ALSO FRANKLY IN TERMS OF HE ELECTION ENVIRONMENT FOR THE REST OF THE YEAR. IT CERTAINLY HAS AN EFFECT ON THE WAY WE THINK ABOUT A STRONG STOCK MARKET. WE DO THINK THAT, WHILE VOLATILITY WILL BE THERE, THERE'S STILL ROOM FOR THIS TO GO. THE FUNDAMENTALS ARE STRONG. CLIENTS ARE GETTING REWARDED NOW FOR FIXED-INCOME INVESTMENTS THE ALL THOSE THINGS ARE GOOD THINGS. AS INTEREST RATES STAY A LITTLE HIGHER, THEIR STOCKS REMAIN IN GOOD SHAPE. >> WHEN YOU THINK ABOUT THE PROPENSITY TO EITHER CROWD INTO RISK ASSETS VERSUS CROWDING INTO OVERCROWDED TRADES, IT SEEMS LIKE IT MAKES SENSE BECAUSE EVERYBODY ELSE IS DOING IT, WHERE DO YOU SEE THAT BALANCE FROM NOW? >> FROM HAVING A FINANCIAL ADVISER, TO TAKE SOME OF THAT EMOTION AND FOMO OUT OF IT. FOMO OR YOLO OUT OF IT. WHAT'S IMPORTANT TO YOU AS A CLIENT? WHAT IS IMPORTANT TO YOU AND YOUR FAMILY? THE BENCHMARK THAT MATTERS IS YOUR OWN BENCHMARK AS IT RELATES TO YOUR GOALS, HOW LONG YOU HAVE TO ACHIEVE THE GOALS, AND THE RISK YOU WANT TO TAKE. EVERY SINGLE CONVERSATION IS HYPER-PERSONALIZED. >> WITH THOSE FOLKS WITH A LONGER TIME HORIZON, ARE YOU STILL URGING TO TAKE A RISK OVER SOME NAMES? THE FACT THAT MAKE YOU DO SEE THEM POTENTIALLY REGAINING? >> FUNDAMENTALLY, THE LONGER YOU HAVE, THE MORE RISK/APPETITE YOU OUGHT TO BE PREPARED TO TAKE. YES, IT'S A VERY PERSONAL THING. YES, WE DO SEE MORE TO RUN ON THE EQUITY SIDE, AND THAT THAT'S A PLACE TO BE ALLOCATING INVESTMENT RIGHT NOW. >> PENNY PENNINGTON, EDWARD JONES' CEO, THANKS FOR THE TIME. >> GOOD TO SEE YOU. >>> WE'RE TRACKING THE MARKETS AT SESSION LOWS. THE DOW IS DOWN ABOUT 1.3%. NASDAQ DOWN 1.1% AS WELL HERE. SEANA, WE'VE BEEN KEEPING TABS ACROSS A LOT OF THE SECTORS. WHEN WE STARTED THE SESSION, ALL 11 SECTORS WERE IN NEGATIVE TERRITORY HERE. CERTAINLY WERE. THIS COMES AS A NUMBER OF WALL STREET PROS ARE STARTING TO READJUSTMENT THEIR EXPECTATIONS. WE'VE SEEN A HUGE SHIFT IN TERMS OF THE LIKELIHOOD, OR VERY UNLIKELY AT THIS POINT, AT LEAST THEY'RE LOSING CONFIDENCE, MAYBE THAT'S A BETTER WAY TO SEE IT. THEY'LL SEE A FED CUT IN JUNE. MORGAN STANLEY'S COLUMNIST, SHE'S NOW CALLING INTO QUESTION THE LIKELIHOOD WE ARE GOING TO GET THE JUNE RATE CUT CALL. SO, AGAIN, YOU'RE SEEING THAT REACTION PLAY OUT? >> ABSOLUTELY. ALL YOUR MARKETS ACTION IS NEXT. STAY TUNED. YOU'RE WATCHING YAHOO FINANCE. VOLATILITY, WALL STREET IS BEGINNING TO GET A BIT CONCERNED. TWO ANALYSTS ARE EXPECTING A DECLINE IN SALES WITH ALEXANDER POTTER EXPECTING DELIVERIES TO SLIP HALF A% JUST SHY OF 1.8%. BOTH ANALYSTS CUT THEIR PRICE TARGETS TO $205 AND $165, RESPECTIVELY HERE, A BIT MORE BEARISHNESS ENTERING THE CHAT ON TESLA. >> WE KNOW THAT TESLA HAS BEEN A MASSIVE UNDERPERFORMER TO SAY THE LEAST. WE HAVE CERTAINLY SEEN AN ENTIRE SHIFT IN TERMS OF HOW INVESTORS VIEW THIS STOCK OVER THE LAST SEVERAL WEEKS. SOME OF THE CRITICISM SURROUNDING MUSK, MOSTS RECENTLY ABOUT WHAT HE WAS SAYING WITH ROBO-TAXIS. HE'S DOING EVERYTHING HE CAN TO DISTRACT INVESTORS FROM SOME OF THE CONCERNING TRENDS IN TERMS OF THE DECLINE OF SALES, AND POTENTIALLY IN THE COMING QUARTERS, TRYING TO SHIFT 245 FOCUS TO THE NEXT NEW SHINY OBJECT. IT COULD BE ROBO-TAXIS. IT WAS INTERESTING WHAT JEFFRIES HAD TO SAY. IT ACKNOWLEDGED HELPING THE SENTIMENT, BUT THEY DO HAVE DOUBTS, AT LEAST IN THE NEAR TERM. >> THIS IS JUST AN APRIL TO FORGET FOR TESLA. >> AND FORD TO FORGET. >> WELLS FARGO, THEY SAW MODERATING DELIVERY RATES. YEAH, THIS IS NOT A GOOD YEAR SO FAR. >> JEFFRIES DID POINT OUT A SILVER LINING WITHIN THEIR NOTE, SAYING THEY ARE CONFIDENT THAT TESLA WILL OVERCOME DEMAND ISSUES BY 2026. >> OKAY. SO THE LONGER-TERM INVESTMENT HORIZON. IF YOU CAN WITHSTAND SOME OF THE VOLA VOLATILITY, YOU COULD LOOT AT A 2026. >> AS A FRIEND WOULD SAY, GRAB A SNACK AND COME BACK. >>> WE ARE GOING TO CONTINUE TO BREAK DOWN THE STRONGER THAN EXPECTED CPI PRINT, THE PRESSURE WE ARE SEEING ACROSS THE BOARD, AND ALSO TWO COMPANIES IN OUR TECH SPOTLIGHT. TSMC AND APPLE. >>> PLUS, WE HAVE THE LOWDOWN ON WHICH MADE IN AMERICA BRAND IS GIVING NIKE AND ADIDAS A RUN FOR THEIR MONEY. I'LL BE BACK HERE AT 11:00 FOR "WEALTH" HOW INFLATION COULD BE AFFECTING YOUR POCKETBOOK, PURSE, WALLET. PLUS, WHY DO WE EVEN CARE SO MUCH ABOUT EARNINGS? WE'LL BREAK IT DOWN AND THE REASON FOR THE SEASON. STICK AROUND, THIS IS YAHOO FINANCE. >>> WELCOME BACK TO YAHOO! FINANCE, I'M SEANA SMITH ALONGSIDE MADISON MILLS, AND WE'RE 30 MINUTES INTO THE TRADING DAY. STOCKS, THEY'RE SELLING OFF THIS MORNING. THE BIG NEWS DRIVING THE MARKET TODAY IS THAT MARCH CPI PRINT. SO, LET'S GET RIGHT TO IT WITH THE THREE KEY FIGURES FROM THIS REPORT OUT, AND WE GOT TO START WITH SHELTER, MADDIE, BECAUSE WE KNOW THE IMPACT THIS HAS HAD ON THIS REPORT REMAINS ONE OF THE STICKIEST SECTORS, RISING 5.7%. WE'RE LOOKING AT THAT ON THE YEAR OVER YEAR CHANGE. ON A MONTH OVER MONTH BASIS, AN SBROOES OF ABOUT 0.4%. THIS ACCOUNTS FOR OVER 60% OF THAT 12-MONTH INCREASE, SO REALLY PUTTING THIS REPORT IN PERSPECTIVE WITH HOW MUCH SHELTER IS REALLY DRIVING THAT HEADLINE NUMBER. >> A LOT OF THE SHELTER PIECE DRIVING THAT NUMBER, BUT WHAT'S NOT DRIVING IT IS FOOD. THIS IS ONE PEOPLE ARE FEELING EVERY DAY, OF COURSE, ACCELERATING BY 0.1% ON A MONTHLY BASIS, AND YOU SEE 2.2% ON A YEAR OVER YEAR BASIS, BUT THAT 0.1% NUMBER PROVIDING PEOPLE WITH AT LEAST A LITTLE SLIVER OF GOOD NEWS, BECAUSE IT COULD HAVE BEEN MUCH WORSE. OBVIOUSLY, FOOD HAS BEEN INCREDIBLY EXPENSIVE FOR FOLKS. I WONDER TO WHAT EXTENT THE BIDEN ADMINISTRATION IS THRILLED TO SEE IT WASN'T HIGHER THIS MONTH. IT WAS STILL RISING OVERALL, OF COURSE, BUT IT COULD HAVE BEEN WORSE WHEN IT COMES TO FOOD. >> SILVER LINING THERE. THE BIDEN ADMINISTRATION REALLY LOOKING FOR ANY SILVER LININGS WITH WITHIN THIS REPORT, GIVEN THE FACT THAT SO MANY AMERICANS ARE PRESSURED EVERY DAY ON HIGHER PRICES, ESPECIALLY COMPARED TO WHAT YOU WERE PAYING A YEAR AGO, TWO YEARS AGO. LET'S ROUND THIS OUT WITH ENERGY AND A LOOK AT WHAT WE'RE SEEING THERE, BECAUSE IT DID ACCELERATE IN MARCH, RISING 1.1% ON A MONTH OVER MONTH BASIS. ON A YEAR OVER YEAR BASIS, IT WAS UP JUST OVER 2%. THE BIGGEST CONTRIBUTOR TO THAT RISE THAT WE SAW ON A YEAR OVER YEAR BASIS WAS -- AND REALLY MONTH OVER MONTH -- IS ALSO THE GAINS THAT WE SAW IN GASOLINE. WE SAW GAINS OF 1.7% COMPARED TO THE PRIOR MONTHS, SO WE HAVE SEEN THE PRICE OF OIL TICK HIGHER. WE HAVE SEEN GASOLINE PRICES RISE AS A RESULT. THAT'S A BIG DRIVER TO SOME OF THE PRICE INCREASES THAT WE ARE SEEING WITHIN THE ENERGY SECTOR. >>> LET'S DO A DEEPER DIVE INTO THE MARKET ACTION. WE MENTIONED THE FACT THAT IT WAS A MUCH STRONGER THAN ANTICIPATED REPORT HERE FOR CPI PRINT. BEATING ON ALL METRICS WHEN IT COMES TO HEADLINE NUMBERS. YOU'VE GOT TO DOW SELLING OFF, NEARLY 500 POINTS, WE'RE RIGHT AROUND THE LOWS OF THE SESSION. FLIPPING OVER TO THE S&P 500, THAT'S OFF ABOUT 1% HERE. WHY WE'RE SEEING THIS SELLOFF IS BECAUSE MORE AND MORE PEOPLE ON THE STREET ARE PUSHING OUT THE LIKELIHOOD OF THAT FIRST RATE CUT. NOW, THE MARKET IS ONLY PRICING IN TWO RATE CUTS BEFORE THE END OF THE YEAR. THAT WAS DOWN FROM WHAT WE WERE PREVIOUSLY EXPECTING OF THREE, AND TAKING A LOOK AT THE NASDAQ COMPOSITE, THAT'S OFF 1.1%, AND YOU CAN SEE THE DROP AT TODAY'S OPEN, AND WE'RE OFF JUST AROUND 1..1%. MADDIE, I KNOW YOU'RE LOOKING AT YIELDS. >> IT'S INTERESTING TO SEE WHAT'S GOING ON IN THE YIELD SPACE, PRICING IN A HIGHER FOR LONGER ENVIRONMENT, AS WE SEE THE TEN-YEAR HITTING 4.5%. IT WAS JUST UNDER THE 4.5% MARK AS WE STARTED OUR SHOW. THAT LEVEL KIND OF TEETERING AROUND THAT LEVEL, BUT THAT'S A NUMBER TO WATCH. INVESTORS ARE SAYING THAT 4.7% IS GOING TO BE THE NEXT KEY LEVEL TO WATCH FOR THE TEN-YEAR IF WE GET TO THAT. THAT'S INDICATIVE OF TRADERS PRICING IN A HIGHER FOR LONGER INTEREST RATE ENVIRONMENT. ECONOMISTS SAYING WE COULD SEE SIGNS IN THE TREASURY MARKET OF A NOVEMBER CUT GETTING PRICED IN, THAT WOULD BE A BIG CHANGE, BECAUSE WE HAVE BEEN HEARING JULY, THE SUMMER, MAYBE A LIVE MEETING, BUT IT LOOKS LIKE IF YOU LOOK AT TREASURYS, NOT SO MUCH. >> AND REAL QUICK, JUST TAKING A LOOK AT THE SECTOR, BECAUSE I KNOW WE STARTED THE DAY HERE, AT LEAST THE OPENING BELL WITH LOOKING AT SOME OF THE PRESSURE WE'RE SEEING ACROSS THE SECTORS AND WHERE WE STAND RIGHT NOW, 35 MINUTES INTO THE TRADING DAY, WE ARE STILL SEEING ENERGY, THE LONE SECTOR THAT'S HOLDING ON TO GAINS, UP ABOUT 0.1%. REAL ESTATE, UTILITIES, THE WORST PERFORMERS IN TODAY'S TRADING ACTION. UTILITY SECTOR OFF JUST ABOUT 2%. REAL ESTATE, OFF NEARLY 3.5%. >> THOSE INTEREST RATE SENSITIVE SECTORS REALLY STRUGGLING ON THE DAY. WE'RE GOING TO TALK ABOUT ALL OF THIS AND MORE WITH HARRY COLVIN, SENIOR MARKET STRATEGIST. HE JOINS US NOW. THANKS FOR BEING WITH US. TALK TO ME ABOUT WHICH CORNER OF THE MARKET WAS THE MOST PREPARED FOR THIS UPSIDE SURPRISE IN THE CPI PRINT >> WELL, IT'S FUNNY YOU SAY THAT. I THINK MARKETS HAVE BEEN QUITE WELL PREPARED, GENERALLY, WITH MANY PEOPLE CALLING FOR A BIT OF A WOBBLE IN MARKETS AND, IN FACT, IF YOU LOOK AT DOWNSIDE PUT PROTECTION IN PORTFOLIOS, THAT'S BEEN PICKING UP, GENERALLY, SO A LITTLE BIT OF A WOBBLE, AND IT'S, AS YOU SAY, IT'S TOWARDS THE SECTORS YOU WOULD EXPECT, PARTICULARLY THOSE DEFENSIVE BOND PROXY TYPE SECTORS, NOT SURPRISINGLY, BUT MARKETS, I THINK, HAVE BEEN A LITTLE BIT PREPARED FOR A WOBBLE, WHICH IS WHY I DON'T THINK WE'RE GOING TO GET MUCH WEAKNESS IN THIS EQUITY MARKET. >> CAN I FOLLOW ON THAT QUICKLY, HARRY? I'M CURIOUS ABOUT WHAT MAKES YOU THINK THE MARKET WAS PREPPED FOR THIS. WE'VE SEEN THAT OVER THE PAST SEVEN DAYS, IT'S KIND OF DEPRESSING FOR THE MARKET, BECAUSE IT'S THE FIRST SEVEN-DAY STRETCH WITHOUT A RECORD HIGH SO FAR THIS YEAR. WE HAVE HAD RECORD HIGH AFTER RECORD HIGH. WHERE IN EQUITIES ARE YOU SEEING PREPARATION FOR HIGHER FN LONGER ENVIRONMENT WITH THAT KIND OF A RALLY? >> I MEAN, LOOK, I'M REALLY REFERRING TO THIS BIG PICKUP WE'VE SEEN IN THE PUT TO CALL RATIO ON THE CBOE, INVESTORS PROTECTING THEIR PORTFOLIOS TO THE DOWNSIDE, AND THEREFORE, BECAUSE THEY'RE PROTECTED WITH OPTIONS, THERE'S NO REAL SELLING PRESSURE IN CASH EQUITIES, AND AS WELL AS THAT, MORE ANECDOTALLY, THERE HAVE BEEN LOTS OF COMMENTATORS OUT THERE CALLING FOR A PULLBACK IN EQUITIES, AND OF COURSE, PULLBACKS DON'T HAPPEN WHEN EVERYONE EXPECTS THEM. THEY HAPPEN WHEN THERE'S EUPHORIA AND COMPLACENCY AND MORE CALLS FOR FURTHER GAINS IN EQUITIES. SO, I THINK IN THAT SENSE, THIS MARKET'S BEEN QUITE WELL PREPARED FOR A LITTLE BIT OF WEAKNESS. >> DO YOU VIEW THIS AS A TEMPORARY BLIP? >> YEAH, I THINK THIS IS A LITTLE CONSOLIDATION WITHIN AN ONGOING UP TREND. I THINK WE'RE IN QUITE A LOW-VOLATILITY ENVIRONMENT. THE BUY THE DIP PSYCHOLOGY IS STILL WORKING. AND OF COURSE, RATES ARE RISING, BOND YIELDS BACKING UP, THE DOLLAR'S BEEN STRONG. THERE ARE THINGS TO WORRY ABOUT, AND I THINK THAT'S WHY WE HAVE HAD THIS PICKUP IN DOWNSIDE PUT PROTECTION, BUT LET'S NOT FORGET THAT'S BEEN HAPPENING ALL YEAR. UPSIDE SURPRISES IN INFLATION, HIGHER RATES, HIGHER DOLLAR, BUT ACTUALLY, EQUITIES ARE VALUED ANYWAY. >> SO, WHAT WOULD BE THE NEXT CATALYST TO HAVE THIS MARKET PRICING IN A RATE CUT IN NOVEMBER, AS LATE AS NOVEMBER? >> WELL, LOOK, I THINK WE NEED TO START SEEING SOME SOFTER INFLATION NUMBERS AND OTHER EVIDENCE THAT INFLATION'S ABOUT TO SOFTEN, AND ARGUABLY, WE ARE BEGINNING TO SEE THAT IN SOME PARTS OF THE U.S. ECONOMY. IF YOU LOOK AT THE FORWARD-LOOKING INDICATORS FOR THE LABOR MARKET, ALMOST ALL OF THEM ARE ROLLING OVER, HIRING INTENTIONS ARE DOWN, PART-TIME WORKERS IN THE SERVICE SECTOR, THEY'RE FALLING. THAT'S NORMALLY THE TYPE OF LABOR THAT GETS CUT FIRST BEFORE OTHER JOB LOSSES COME THROUGH. THE NUMBER OF PEOPLE WORKING PART-TIME BECAUSE THEY CAN'T FIND A FULL-TIME JOB, THAT'S TRENDING UP. IF YOU LOOK AT THE KANSAS CITY FED LABOR MARKET INDEX, THAT'S ROLLING OVER, AND THAT AGGREGATES ALL KINDS OF FORWARD-LOOKING INDICATORS LIKE NEW HIRES AND QUICK RATES AND THINGS LIKE THAT. SO, I THINK PRETTY MUCH WHEREVER YOU LOOK, THERE IS SOFTNESS COMING IN THIS U.S. LABOR MARKET, AND THAT SHOULD THEN FEED THROUGH INTO SERVICE SECTOR INFLATION AND INTO INTEREST RATE EXPECTATION. SO, I THINK THAT'S THE KEY CATALYST. THAT'S THE KEY TRIGGER WE WANT TO LOOK FOR OVER THE NEXT FEW MONTHS. >> HARRY, DO YOU THINK THIS INFLATION PRINT HAS PRETTY MUCH KILLED ANY SORT OF ODDS THAT WE ARE GOING TO SEE A JUNE RATE CUT? >> I THINK IT PROBABLY HAS. I MEAN, UNLESS WE GET SOME REAL MARKED DETERIORATION IN SOME OF THE MACRO AND INFLATION-TYPE DATA OVER THE COURSE OF THE NEXT MONTH OR TWO, THEN YES, THAT'S LOOKING LESS LIKELY, AND PROBABLY CUTS ARE MORE OF A STORY FOR THE SECOND HALF OF THE YEAR. >> ALL RIGHT, HARRY COLVIN, WE APPRECIATE YOU TAKING THE TIME TO JOIN US HERE. THANKS, HARRY. >>> MORE BAD NEWS FOR THE WORLD'S SECOND LARGEST ECONOMY, FITCH CUTTING LOOK ON CHINA'S CREDIT RATING FROM NEGATIVE TO STABLE, SAYING THE GOVERNMENT COULD PILE ON DEBT AS THE ECONOMY FACES INCREASING UNCERTAINTY. JOINING US NOW TO EXPLAIN WHAT THIS MEANS FOR CHINA AND FOR THE U.S. AND YOU, THE INVESTOR, WE WANT TO BRING IN YAHOO! FINANCE'S AKIKO FUJITA. AKIKO? >> YEAH, GOOD MORNING TO YOU, SEANA. WE DIDN'T NECESSARILY SEE A SIGNIFICANT REACTION IN THE MARKETS, PARTLY BECAUSE WE HAVE HEARD THIS STORY BEFORE. IT WAS JUST IN DECEMBER THAT MOODY'S DOWNGRADED THE OUTLOOK FOR CHINA'S CREDIT RATING. FITCH NOW KEEPING CHINA'S RATING AT A-PLUS, WHICH IS THE THIRD HIGHEST CATEGORY, BUT IT DOWNGRADED THE OUTLOOK TO NEGATIVE, SPECIFICALLY CITING RISK TO THE COUNTRY'S PUBLIC FINANCES. THIS IS ALL ABOUT THIS DOUBLE WHAMMY WE'VE BEEN TALKING ABOUT WITH CHINA, DECELERATING GROWTH AND GROWING DEBT STEMMING FROM THE COLLAPSE IN THE COMPANY'S PROPERTY SECTOR AND GOVERNMENT MEASURES THAT WERE SPENT ON ANTI-PANDEMIC MEASURES. CHINA'S DEBT TO GDP RATIO CLIMBED TO A NEW RECORD IN 2023, 287% IS WHAT WE'RE LOOKING AT. YOU COMPARE THAT TO 97% IN THE U.S. AND CERTAINLY POINTS TO JUST WHERE THE HEALTH IS IN CHINA RIGHT NOW, AND THAT, BY THE WAY, IS ACCORDING TO DATA FROM THE NATIONAL INSTITUTE FOR FINANCE AND DEVELOPMENT. IF YOU LOOK SPECIFICALLY AT DEBT HELD BY CENTRAL AND LOCAL GOVERNMENTS, YOU SEE IT ON THE CHART THERE. IN ROUGHLY FOUR YEARS, IT'S GONE FROM 77% TO ROUGHLY 111%, AND THERE'S A NUMBER OF FACTORS BEHIND THAT. THERE'S THE TRANSITION LARGELY IN THE PUBLIC FINANCE MODEL, WHICH WAS DRIVEN BY LOCAL GOVERNMENTS THAT LARGELY LEANED ON LAND DEVELOPMENT, AND WITH THE DOWNTURN IN THE PROPERTY SECTOR THAT WE'VE BEEN TALKING ABOUT, THAT DEVELOPMENT HAS PLUNGED, LEADING TO UNSUSTAINABLE LEVELS OF DEBT. NOW, FITCH NOTES, IN THIS REPORT, THE CENTRAL GOVERNMENT WILL NOW BE SHOULDERING A LOT OF THAT LOAD OR MORE OF THAT LOAD, AND THAT'S THE BIG CONCERN FOR CHINA MOVING FORWARD. CHINA'S FINANCE MINISTRY NATURALLY DENOUNCING THE D DOWNGRADE OVERNIGHT, SAYING RISKS ARE UNDER CONTROL. THE QUESTION IS, WHAT'S NEXT NOW THAT WE'VE GOTTEN THE DOWNGRADE ON THE OUTLOOK? ING'S CHIEF ECONOMIST, LYNN SONG, SAYS CHINESE CORPORATE CREDIT COULD BE NEXT TO BE DOWNGRADED, AND HE EXPECTS CREDIT RATINGS OR RATINGS AGENCIES TO EVENTUALLY DOWNGRADE THE ACTUAL CREDIT RATING LARGELY BECAUSE FISCAL SPENDING IS EXPECTED TO ONLY ACCELERATE AS CHINA TRIES TO STABILIZE THE ECONOMY THERE. NOW, LAST TIME WE SAW A WAVE OF CREDIT DOWNGRADES WAS BACK IN 2017 FOR MOODY'S AND S&P, 2013. WHEN YOU LOOK AT FITCH, THERE ARE QUESTIONS, GUYS, THOUGH, ABOUT THE APPETITE FOR STIMULUS. NOW, THERE'S SO MUCH COMPARISONS THAT ARE MADE BETWEEN WHAT'S HAPPENING NOW AND BACK IN 2008 IN THE MIDST OF THE FINANCIAL CRISIS. CHINA, AT THAT TIME, PUT FORWARD A STIMULUS OF $585 BILLION. THE THINKING IS THIS TIME THE APPETITE ISN'T THERE FOR THAT, LARGELY BECAUSE THAT 2008 STIMULUS WAS ABOUT DEVELOPMENT AND PROPERTY DEVELOPMENT. THAT'S LARGELY THE REASON WHY CHINA IS IN THE POSITION THAT IT IS TODAY WITH THE INCREDIBLE AMOUNT OF DEBT THEY HAVE TAKEN ON. BY THE WAY, IMF NOW ESTIMATING GROWTH IN CHINA TO BE AT 4.6%, SO THAT POINTS TO SLOWER GROWTH WITH THIS DEBT PICTURE, AND CHINA POTENTIALLY HAVING TO TAKE ON MORE DEBT IN ORDER TO STIMULATE THE ECONOMY FROM WHERE IT IS RIGHT NOW. >> THAT WAS A VERY CHALLENGING TIME FOR CHINA. AT LEAST IT LOOKS LIKE IN THE NEAR TERM. AKIKO, THANK YOU SO MUCH FOR BREAKING THAT DOWN FOR US. >>> WELL, STOCKS SELLING OFF THIS MORNING. AGAIN, YOU'VE GOT THE DOW OFF AROUND 431 POINTS SO OFF THE LOWS OF THE MORNING SESSION. THE S&P, OFF JUST AROUND 1%, AS WELL AS THE NASDAQ. THE MOVE LOWER COMING ON THE HEELS OF THE CPI PRINT THAT WE GOT OUT THIS MORNING, SHOWING THAT FOR THE THIRD MONTH IN A ROW, CONSUMER PRICES REMAINING ELEVATED COMING IN HOTTER THAN WHAT THE STREET HAD BEEN FORECASTING. THAT'S PUTTING PRESSURE ON THE MAJOR AVERAGES. WHEN YOU TAKE A LOOK AT THE BOND MARKET, WE ARE SEEING MOVEMENT THERE. YOU'VE GOT THE YIELD SPIKING HERE ON THE HEELS OF THIS REPORT. ON THE OTHER SIDE OF THIS BREAK, WE'RE GOING TO ZERO IN ON THE TECH SECTOR. ONE OF THE LEADERS OF THE MASSIVE RALLY THAT WE HAD SEEN IN THE MARKET, UP UNTIL THIS POINT, WHAT WE COULD EXPECT ON THE OTHER SIDE. >>> WELL, NVIDIA IS ONE OF THE OUTLIERS IN TODAY'S SESSION, BUCKING THE BROADER MARKET'S SELLING ACTION, AND YOU CAN SEE GAINS OF JUST ABOUT 1%, AND HASN'T BEEN AN EASY ROAD FOR THIS A.I. DARLING IN RECENT WEEKS, BECAUSE THE STOCK SOLD OFF AFTER IT HIT AN ALL-TIME HIGH OF $950. THAT WAS BACK ON MARCH 25th. SHARES SINCE THEN HAVE FALLEN ABOUT 10%. HERE WITH MORE ON WHAT THE ROAD AHEAD COULD LOOK LIKE, WE WANT TO BRING IN D.A. DAVID'S MANAGING DIRECTOR. GIL, IT'S GREAT TO TALK TO YOU. WE DON'T WANT TO MAKE TOO MUCH OF A 10% DROP, GIVEN THE FACT THAT WE HAVE SEEN THIS MASSIVE RUN-UP SINCE THE START OF THE YEAR, BUT WHEN YOU TAKE A LOOK AT SOME OF THE TECHNICAL LEVELS AND THE PRICING ACTION THAT WE'VE SEEN IN NVIDIA, WHAT DOES THAT SIGNAL TO YOU? >> THAT NVIDIA'S CAUGHT BETWEEN TWO VERY STRONG FORCES. THIS YEAR IS GOING TO BE A SPECTACULAR YEAR FOR NVIDIA. THEY ONLY HAVE FIVE LARGE CUSTOMERS THAT REPRESENT MORE THAN TWO-THIRDS OF THEIR REVENUE AND ALL THOSE CUSTOMERS ARE TELLING US AND THE STREET THEY'RE GOING TO BUY A LOT MORE GPUs THIS YEAR. THERE'S A LOT OF COMFORT THAT NVIDIA CAN EXCEED ITS EXPECTATIONS THIS YEAR. THAT'S ONE BIG FORCE. THE OTHER BIG FORCE IS THAT THERE ARE MANY TECHNOLOGY TRENDS AND MARKET TRENDS THAT ARE INDICATING THAT THIS WON'T LAST FOR VERY LONG, THAT BY 2026, NVIDIA'S REVENUE MAY NOT BE HIGHER. IT MAY ACTUALLY BE LOWER THAN IT IS THIS YEAR. SOMEWHERE BETWEEN THOSE TWO FORCES, THE STOCK IS CAUGHT, AND THAT'S WHY IT'S BECOME SO VOLATILE. >> WHY DO WE THINK 2026 IS THE END FOR NVIDIA? >> NOT THE END. BUT A NORMAL CYCLICAL DOWNTURN. NVIDIA HAS MASSIVE SHARE IN THIS MARKET THAT'S ABSOLUTELY EXPLODED, BUT ITS CUSTOMERS ARE EVEN BIGGER COMPANIES, SO MICROSOFT, FOR INSTANCE, REPRESENTS 19% OF NVIDIA'S REVENUE LAST YEAR, AND THEIR SPEND ON GPUs WAS ALMOST 40% OF THEIR CAPEX, OF MICROSOFT'S CAPEX. THAT MEANS THEIR CAPEX WENT FROM 12% OF REVENUE TO 17% OF REVENUE. IF THAT WAS TO SUSTAIN, OR GROW, WHICH IS WHAT'S IMPLIED IN NVIDIA'S ESTIMATES, MICROSOFT WOULD LOSE FIVE POINTS OF MARGINS OVER THE NEXT FEW YEARS. THAT'S HIGHLY UNLIKELY. IT'S UNLIKELY THAT THIS LEVEL OF INVESTMENT FROM THESE LARGE CUSTOMERS WILL CONTINUE, ESPECIALLY AS THEY DEVELOP REPLACEMENTS FOR NVIDIA'S CHIPS. MICROSOFT, AMAZON, GOOGLE ARE DEVELOPING THEIR OWN CHIPS TO REPLACE NVIDIA. >> AND GIL, I WANT TO TALK MORE ABOUT THAT. CLEARLY, NVIDIA IS SEEING MORE AND MORE COMPETITION, AND IT IS COMING FROM EVEN SOME OF ITS OWN CUSTOMERS. HOW MUCH PRESSURE DO YOU SEE THAT POTENTIALLY PLACING ON MARGINS OR EVEN JUST RESTRICTING SOME OF THEIR PRICING ACTION THEN IN THE YEARS TO COME? >> THAT'S THE THING. NOT MUCH THIS YEAR. THIS YEAR, IT'S STILL GOING TO BE ALL NVIDIA FOR ALL THESE CUSTOMERS. THEY'RE BUYING AS MANY GPUs AS THEY CAN PUT THEIR HANDS ON, BUT WITHIN A YEAR OR TWO, THEY'RE GOING TO HAVE PRODUCTION AT A LEVEL THAT THEY CAN SUPPORT THEIR OWN DEMAND AND IMPORTANTLY, THEY CAN REDUCE COSTS VERY SIGNIFICANTLY BY USING CUSTOM CHIPS THAT ARE ONLY THERE TO DO TRAINING AND INFERENCING FOR A.I. THOSE ARE FAR LESS EXPENSIVE CHIPS THAN GPUs. GPUs ARE EXTRAORDINARILY EXPENSIVE BECAUSE OF HOW VERSATILE AND COMPETENT THEY ARE. IT'S LIKE DRIVING TO THE GROCERY STORE IN A GOLD-PLATED FERRARI. YOU DON'T NEED THAT. A TESLA MODEL Y WILL DO THE TRICK, AND THAT'S WHAT MICROSOFT, AMAZON, AND GOOGLE ARE DEVELOPING IN-HOUSE. >> OKAY, BUT HAVING SAID THAT, IN TERMS OF THE FERRARI VERSUS THE TESLA THERE, I WONDER TO WHAT EXTENT NEW CAR MAKERS ARE GOING TO COME IN AND DISRUPT WHAT WE SEE GOING ON WITH THE NVIDIAS OF THE WORLD. WE ALREADY HAVE INTEL ANNOUNCING NEW CHIPS. GOOGLE ANNOUNCING NEW CHIPS. TO WHAT EXTENT ARE THOSE COMPETITORS PREPARED TO REALLY TAKE SOME MARKET SHARE HERE? >> THE LARGE HYPERSCALERS ALREADY HAVE PRODUCTS. THOSE WILL RAMP UP PRETTY QUICKLY. IN TERMS OF UPSTARTS, THAT WILL TAKE LONGER JUST BECAUSE CHIPS ARE VERY HARD TO MAKE. IT TAKES A REALLY LONG TIME TO MASTER THAT PROCESS, BUT THERE'S A WAVE OF NEW CHIPS THAT WERE BUILT SPECIFICALLY AND EXCLUSIVELY AROUND HOW GENERATIVE A.I. WORKS. THOSE ARE GOING TO BE FAR BETTER AND LESS EXPENSIVE, AND I WOULD EXPECT THOSE TO RAMP UP INTO MORE OF THE THREE TO FIVE-YEAR TIME FRAME. >> WHEN WE TALK ABOUT THAT AT LEAST WHEN YOU'RE TAKING A LOOK AT THE LONGER TERM TIMELINE, WE COULD SEE MORE PRESSURE FROM THESE COMPETITORS WHEN IT COMES TO NVIDIA'S BUSINESS, WHO DO YOU THINK IS BEST POSITIONED, OUTSIDE OF SOME OF THE CUSTOMERS WE ALREADY TALKED ABOUT, TURNED TO COMPETITORS IN THE FUTURE, WHO DO YOU THINK IS BEST POSITIONED IN ORDER TO REALLY CAPITALIZE ON THE A.I. SPENDING AND MOMENTUM WITHIN THE SPACE? >> SO, I DO THINK IT IS THE HYPERSCALERS, BECAUSE THEY'RE THE ONES THAT ARE ACTUALLY USING THIS -- THESE CHIPS TO PROVIDE A SERVICE, AND THAT'S NOT GOING TO STOP. THERE'S GOING TO BE A CONTINUED RAMP OF ACTIVITY, TRAINING AND INFERENCING, ON GENERATIVE A.I., SO IT IS, FIRST AND FOREMOST, MICROSOFT, WHICH IS GETTING A LOT OF CREDIT, JUSTIFIABLY SO, BUT ALSO AMAZON. LET'S NOT FORGET. AWS IS BIGGER THAN MICROSOFT AZURE, AND THEY'RE JUST GETTING WARMED UP IN TERMS OF THEIR ABILITY TO PROVIDE GENERATIVE A.I. SERVICES TO THEIR CUSTOMERS WHICH THEY HAVE MORE OF. AND AMAZON, BY THE WAY, TO TIE THIS BACK TO THE CHIP CONVERSATION, WHEN THEY JUST MADE A BIG INVESTMENT IN ANTHROPIC, $2.57 BILLION, PART OF THE DEAL WAS THAT ANTHROPIC WOULD RUN ON AMAZON CHIPS. SO, AMAZON IS SETTING ITSELF UP TO BE VERTICALLY INTEGRATED HERE AND PROVIDE THESE GENERATIVE A.I. SERVICES AT A MUCH MORE COMPETITIVE PRICE. THEY'RE GETTING SOME CREDIT, BUT NOT NEARLY ENOUGH. >> GIL, TO WHAT EXTENT SHOULD INVESTORS BE WORRIED ABOUT VALUATIONS FOR SOME OF THE NAMES YOU JUST MENTIONED? >> MICROSOFT IS TRENDING CLOSER TO THE TOP OF ITS VALUATION RANGE, WHICH IT DESERVES TO, BECAUSE IT'S A MUCH BETTER COMPANY THAN IT HAS BEEN FOR THE LAST 25 YEARS. AMAZON IS TRADINGS A LITTLE BIT ABOVE AVERAGE BUT STILL NOT AT THE HIGH END OF ITS MULTIPLE RANGE, SO THERE'S A LITTLE BIT MORE OPPORTUNITY THERE. TO CIRCLE BACK TO NVIDIA, IT REALLY HINGES ON WHAT YOU TAKE FOR 2026 ESTIMATES. IF YOU USE THE CONSENSUS ESTIMATES FROM THE 60 OR SO ANALYSTS THAT HAVE ESTIMATES OUT THERE, NVIDIA'S NOT VERY EXPENSIVE. IF YOU USE OUR ESTIMATES, WHICH IS LESS THAN HALF OF THAT, THEY DO LOOK VERY EXPENSIVE. >> ALL RIGHT, NVIDIA, A MIXED PICTURE ON HOW PRICEY THAT NAME IS. GIL, THANKS FOR JOINING US. >>> APPLE'S iPHONE OUTPUT IN INDIA IS RAMPING UP. A NEW REPORT FROM BLOOMBERG SUGGESTING ONE IN EVERY SEVEN iPHONES IS ASSEMBLED IN INDIA. THAT WOULD TOTAL ABOUT $14 BILLION WORTH OF OUTPUT THERE. WITH MORE, WE HAVE YAHOO! FINANCE'S DAN HOWLEY JOINING US. DAN, WHAT IS THIS OUTPUT FROM INDIA TELLING US ABOUT MAYBE DIVERSIFICATION AWAY FROM CHINA? >> THAT'S REALLY THE MAIN STORY HERE. THERE'S TWO ELEMENTS TO IT HERE. IT'S THE DIVERSIFYING AWAY FROM CHINA, ENSURING THAT SHOULD ANYTHING GO SOUR BETWEEN THE U.S. AND I GUESS, MORE SOUR BETWEEN THE U.S. AND CHINA, THAT APPLE HAS A MANUFACTURING HUB THAT IT DOESN'T HAVE TO, YOU KNOW, KIND OF TIPTOE AROUND, AND SO CHINA COULD BE THAT. SO COULD VIETNAM AND OTHER COUNTRIES. BUT IN ADDITION TO THAT, IT'S PART OF APPLE'S STRATEGY OF BEING ABLE TO PHYSICALLY HAVE A FOOTPRINT IN THE COUNTRY AS FAR AS RETAIL SALES GO. THEY OPENED UP THEIR FIRST FLAGSHIP STORE IN MUMBAI. TIM COOK WAS THERE. THIS IS SOMETHING THAT THE COMPANY IS HEAVILY LEANING INTO. JUST TO PUT THAT $14 BILLION INTO PERSPECTIVE, THAT ONE IN SEVEN iPHONES, IN Q1 ALONE, THE COMPANY SOLD $69. BILLION WORTH OF iPHONES, AND IN 2023, IT HAD $200.6 BILLION IN iPHONE REVENUE. SO, IT'S STILL A RELATIVELY SMALL NUMBER OF iPHONES BEING BUILT IN INDIA, BUT IF YOU LOOK ON APPLE'S WEBSITE, IF YOU LOOK ON DIFFERENT JOB BOARDS, THERE ARE PLENTY OF JOBS OPEN FOR APPLE IN INDIA, SO YOU CAN ONLY IMAGINE THEY'RE GOING TO CONTINUE TO TRY TO WOO SOME COMPANIES TO HELP THEM BUILD OUT IN INDIA. THAT INCLUDES FOXCONN, PEGATRON, THOSE CONTRACT BUILDERS FOR APPLE, AS WELL AS INDIAN PRIME MINISTER MODI. >> ALL RIGHT, DAN, THANK YOU SO MUCH FOR JOINING US. LOOKS LIKE APPLE IS PART OF THE OVERALL DOWNTURN WE'RE SEEING IN THE MARKET TODAY, DOWN NEARLY 1% HERE. THANKS SO MUCH, DAN. >>> WE'RE GOING TO HAVE ALL YOUR MARKETS ACTION AHEAD HERE. LOOKING ACROSS THE BOARD, STILL SEEING DECLINES ACROSS ALL THE MAJOR INDEXES WITHIN THE MAG SEVEN. LOOKS LIKE NVIDIA, ONE OF THE ONLY DARLINGS OF THE DAY, UP A LITTLE OVER 1% AS INVESTORS LOOK TO BUY THAT PULLBACK. AS WE CONTINUE TO SEE DOLLAR STRENGTH INCREASING TODAY, OFF OF THAT HOTTER THAN EXPECTED CPI PRINT, WE'RE GOING TO TALK ALL THINGS CURRENCIES. THAT'S COMING UP RIGHT HERE AFTER THE BREAK. >>> WE'RE SEEING THE DOLLAR RISING THIS MORNING ON THE BACK OF THAT HOTTER THAN EXPECTED CPI PRINT, UP A LITTLE OVER -- IT'S LOOKING LIKE 0.8% HERE, BUT OUR NEXT GUEST SAYING THE DOUBTS FOR RATE CUTS COULD SUGGEST THAT THE STRONGER FOR LONGER DOLLAR COULD REMAIN. WE'RE GOING TO BRING IN JANE FOLEY, HEAD OF FX STRATEGY. THANK YOU SO MUCH FOR BEING HERE. TO WHAT EXTENT DO YOU ANTICIPATE THIS STRONGER FOR LONGER DOLLAR HAVING LEGS HERE, GIVEN SOME OF THE RISKS THAT WE SEE OUT THERE, GEOPOLITICALLY, WITH THE ELECTION, HOW LONG WOULD THIS LAST? >> I THINK THIS COULD LAST FOR QUITE SOME TIME. IF YOU LOOK AT THE U.S. ECONOMY, IT'S CERTAINLY A LOT MORE RESILIENT THAN OTHER MAJOR ECONOMIES. I'M FOCUSING HERE PARTICULARLY ON EUROPE, BUT CERTAINLY IF YOU LOOK AT CHINA, LOOK AROUND THE WORLD, WE SEE A LOT OF WEAKNESS ELSEWHERE, SO YOU HAVE THIS POINT OF TIME WHERE THE MARKET CONSENSUS IS QUITE STRONGLY IN FAVOR OF AN ECB. INTEREST RATE CUTS IN JUNE, WHEREAS EVERY WEEK IT SEEMS LIKE MORE DATA FROM THE U.S. IS CHASING AWAY THE POSSIBILITY OF A SPRING OR EVEN A SUMMER RATE CUT FROM THE FEDERAL RESERVE. SO, THAT, IN ITSELF, INTEREST RATE DIFFERENTIALS, IS FAVORING THE DOLLAR. AS YOU MENTIONED, THERE ARE GEOPOLITICAL CONCERNS. THEY HAVE HAD AN IMPACT ON MARKET PRICING, CERTAINLY LAST WEEK, CERTAINLY IF YOU LOOK AT WHAT IS HAPPENING TO GOLD, OIL, LAST WEEK. THEY COULD COME BACK, CREATE SOME SAFE HAVEN BID FOR THE DOLLAR TOO, BUT ALSO, IF YOU LOOK AFTER THE U.S. ELECTION, PARTICULARLY IF WE HAD, FOR INSTANCE, A TRUMP PRESIDENCY, IF HE WERE TO INTRODUCE THOSE TARIFFS THAT HE HAS WARNED ABOUT, THAT COULD BE FLAE INFLATIONARY FOR THE U.S. TOO. THAT COULD MEAN THAT THE U.S.'S OR THE FED'S EASING CYCLE COULD REALLY BE QUITE SHORT LIVED COMPARED WITH SOME OTHER COUNTRIES, AND THAT, TOO, COULD SUSTAIN THE DOLLAR BEING STRONGER FOR LONGER. >> SHORT-LIVED, JANE, WHAT YOU WERE TALKING ABOUT. WHAT, MORE SPECIFICALLY, DO YOU THINK WE COULD POTENTIALLY SEE? >> WELL, I MEAN, CLEARLY, THAT'S GOING TO VERY MUCH DEPEND ON THE DATA. THE FED HAVE MADE IT CLEAR THAT THEY ARE DATA DEPARTMENT, AND T THEY STILL ARE, BUT I THINK THEY WERE HOPING FOR EVIDENCE THAT THE STRONGER INFLATIONARY IMPULSES THAT WE HAVE BEEN SEEING OVER THE PAST COUPLE MONTHS, PERHAPS THEY WERE JUST BUMPS IN THE ROAD, AND THE FACT THAT WE GOT A STRONGER NUMBER TODAY MEANS THAT MAYBE THESE AREN'T BUMPS IN THE ROAD. MAYBE INFLATION IS JUST MUCH MORE STICKIER THAN THEY HOPED IT WOULD BE. BEFORE THE SUMMER, WE WILL, OF COURSE, HAVE MORE U.S. DATA, BUT EVEN IF WE LOOK TO THAT PAYROLLS REPORT WE HAD AT THE END OF NEXT WEEK, IF WE LOOK AT THAT EARNINGS NUMBER, THAT'S NOT PARTICULARLY CONDUCIVE TO A 2% INFLATION TARGET, SO IT IS QUITE DIFFICULT TO PUT THE ARGUMENTS TOGETHER NOW TO SUGGEST THAT THE FED SHOULD BE CUTTING THREE TIMES THIS YEAR. THAT ARGUMENT OR THOSE ARGUMENTS ARE LOOKING, YOU KNOW, QUITE FLAKEY RIGHT NOW. WE REALLY WOULD HAVE TO SEE SOME CONCERTED WEAKNESS IN ALL OF THE OTHER U.S. INFLATION INDICATORS BETWEEN NOW AND THE SUMMER FOR THE FED OR THE MARKET TO BE CONFIDENT THEY CAN GO THREE TIMES THIS YEAR. >> JANE, I'M LOOKING FOR EVIDENCE IN THIS MARKET THAT WE'RE SEEING A REPRICING OF NOVEMBER FOR THE POTENTIAL FIRST GO AT THE FED CUTTING RATES. WITHIN THE FX SPACE, WHAT WOULD YOU BE LOOKING AT TO INDICATE THAT THE MARKET IS PRICING IN NOVEMBER AS THE FIRST CUT? >> OF COURSE, FIRST AND FOREMOST, WE MUST LOOK AT THE ECONOMIC DATA, AND THERE'S A LOT OF FIGURES BETWEEN NOW AND NOVEMBER. IN FACT, THERE'S A LOT OF DATA BETWEEN NOW AND SEPTEMBER, WHICH COULD, YOU KNOW, PUSH US IN EITHER DIRECTION. BUT CLEARLY, THE MARKET IS TAKING ON BOARD THE RISKS THAT THIS RESILIENCE OF THE ECONOMY, THE RESILIENCE OF ALL THE STICKINESS OF INFLATION COULD CONTINUE, BUT AS WE GET TO NOVEMBER, WELL, YOU KNOW, WE DO HAVE THE ELECTION THERE, AND THAT'S POLITICALLY DIFFICULT FOR THE FEDERAL RESERVE. THEY WON'T WANT TO BE SEEN AS BEING POLITICALLY MOTIVATED. THAT COULD IMPACT THEIR CREDIBILITY. SO, NOVEMBER IS A DIFFICULT TIME. SO, POSSIBLY, YOU KNOW, YOU COULD MAKE AN ARGUMENT THAT IF THEY CAN'T CUT BY SEPTEMBER, IF THE ECONOMIC DATA ISN'T WEAK ENOUGH BY SEPTEMBER, MAYBE THEY WON'T BE ABLE TO GO UNTIL AFTER THE ELECTION. THAT IS NOT A CONSENSUS VIEW RIGHT NOW, BUT IT IS OUT THERE. IT'S -- IT IS BEGINNING TO BE DISCUSSED. >> DO YOU THINK THE ODDS OF THAT ARE MORE LIKELY ON THE HEELS OF THIS PRINT, CLEARLY? >> YEAH, THE ODDS HAVE CERTAINLY INCREASED ON THE HEELS OF THIS PRINT, BUT YOU KNOW, IT IS, RIGHT NOW, STILL ONLY APRIL. WE ARE GENERALLY STILL LOOKING AT MARCH DATA, SO WE HAVE A LOT TO DIGEST BETWEEN NOW AND THE SUMMER. BUT SERM, THE ODDS OF THAT HAVE NOW INCREASED. >> TALKING ABOUT THE IMPLICATIONS OF THE STRONGER DOLLAR, SOME OF THE CRITICAL LEVELS THAT YOU ARE WATCHING WHEN IT COMES TO THAT TREND THAT WE SEE, AN UPSIDE TO THE DOLLAR, WHAT ARE THOSE, AND TALK TO OUR INVESTORS ABOUT WHY IT'S SO CRITICAL THEY PAY CLOSE ATTENTION TO THE PRICE OF THE U.S. DOLLAR AND THE IMPLICATION FOR MULTINATIONAL COMPANIES. >> WELL, YOU KNOW, THAT'S A VERY INTERESTING QUESTION AND CAN BE ANSWERED IN SEVERAL DIFFERENT WAYS. WHAT I WOULD SAY IS, FOR INSTANCE, IF YOU LOOK AT THE EUROPEAN CENTRAL BANK, THE EUROPEAN CENTRAL BANK WILL NOT BE AS WORRIED ABOUT THE RELATIVE WEAKNESS OF THE EURO TODAY IN THE SAME WAY THAT IT MAY HAVE BEEN SINCE MONTHS OR 18 MONTHS AGO, AND THAT'S BECAUSE INFLATION IS FAR MORE UNDER CONTROL IN EUROPE. A WEAKER CURRENCY IS CLEARLY AN INFLATIONARY IMPETUS. IT BRINGS THAT WITH IT, BECAUSE IT BRINGS IN HIGHER IMPORT PRICES, BUT IF YOU LOOK AT INFLATION BEING MUCH LOWER, IF YOU'RE LOOKING AT ECONOMIC WEAKNESS, LIKE THE ECB, YOU KNOW, CERTAINLY IS WHEN IT LOOKS AT GERMANY, WELL, THE WEAKER CURRENCY WILL NOT BE SO MUCH OF A RISK TO ITS POLICIES, AND THAT'S WHY THE MARKET CONSENSUS IS STILL VERY MUCH IN FAVOR OF A JUNE INTEREST RATE CUT FROM THE ECB. NOW, CLEARLY, IF THE DOLLAR CARRIES ON STRENGTHENING, IF EURO-DOLLAR, YOU KNOW, GOES DOWN MORE THIS YEAR, 105 OR EVEN LOWER, THAT MAY HAVE AN IMPACT ON THE PACE OF INTEREST RATE CUTS, BUT IT'S NOT THE THREAT. THE CURRENCY WEAKNESS IS NOT THE THREAT THAT IT WOULD HAVE BEEN A WHILE AGO. THAT SAID, IF YOU LOOK AT DOLLAR-YEN, IT'S AT 152. THE MARKET IS VERY FRIGHTENED THAT WILL BRING IN SOME FX INTERVENTION FROM THE MINISTRY OF FINANCE, AND CERTAINLY, I THINK, BETWEEN THESE LEVELS AT 152 AND 15 5, THE RISK OF INTERVENTION, JUST TO STABILIZE THAT CURRENCY, TO KEEP THE EYEN FROM WEAKENING TOO MUCH, DOES HAVE TO BE CONSIDERED. THERE IS A VERY STRONG RISK THAT THE MINISTRY OF FINANCE WILL INTERVENE TO TRY TO PROP UP THE END. >> IT'S A GREAT POINT THAT SEANA BROUGHT UP ABOUT THE SPILLOVER EFFECT OF ECONOMIC DATA LIKE THIS IN THE U.S. GLOBALLY. SINCE YOU MENTIONED THE DOLLAR-YERNGS I WANT TO TALK ABOUT THE YEN BREAKING THROUGH THAT 152 LEVEL, AND YOU MENTIONED THIS AS WELL. HOW LIKELY DO YOU THINK IT IS THE JAPANESE AUTHORITIES ARE GOING TO WANT TO INTERVENE NOW THAT WE'VE BROKEN THROUGH THAT KEY LEVEL? >> I DON'T THINK THEY WOULD EVER HAVE GONE IMMEDIATELY AFTER THAT LEVEL. THEY'RE UNDERSTANDING THAT THE MARKET WAS VERY MUCH FOCUSED ON THAT LEVEL BECAUSE THAT'S WHEN THEY'VE INTERVENED BEFORE. BUT YOU KNOW, I THINK BETWEEN 152 AND 155, THE RISK DOES GO UP. BUT FX INTERVENTION IS NOT WITHOUT COST FOR A MONETARY AUTHORITY, AND THE COST COULD COME BOTH IN FINANCIAL BUT ALSO IN TERMS OF CREDIBILITY IF THE INTERVENTION SORT OF FAILS TO TURN A CURRENCY PAIR AROUND. I THINK WHAT THE MINISTRY OF FINANCE WILL -- THE BANK OF JAPAN WILL BE WAITING FOR IS HOPEFULLY SOME STRONGER ECONOMIC DATA FROM JAPAN. MAYBE FROM THE APRIL 26th BANK OF JAPAN MEETING, MAYBE MORE HAWKISH COMMENTARY, BECAUSE IF THAT HAPPENS, THE IDEAL SITUATION FOR THE MINISTRY OF FINANCE IS THAT THAT WILL HELP STABILIZE THE YEN. THEY WILL NOT HAVE TO DIP THEIR TOE IN WITH ANY MORE THAN VERBAL INTERVENTION. THE NEXT FEW WEEKS, I THINK, ARE GOING TO BE REALLY CRITICAL FOR THE JAPANESE AUTHORITIES. >> ALL RIGHT, JANE FOLEY, APPRECIATE YOU HOPPING ON WITH US HERE THIS MORNING, HEAD OF FX STRATEGY AT RABOBANK. THANK YOU SO MUCH. >>> WELL, TREASURYS JUMPING AFTER HOT INFLATION DATA DASHING INVESTORS' HOPES OF A RATE CUT COMING ANY TIME SOON. WE WILL DIG INTO THE BOND MARKET AND THE MOVES THAT WE'RE SEEING HERE ON THE HEELS OF THIS PRINT ON THE OTHER SIDE. >>> THE HOTTER THAN EXPECTED CPI REPORT PUSHING TREASURY YIELDS UP THIS MORNING. I WANT TO TAKE A LOOK AT WHAT WE'RE SEEING, SPECIFICALLY IN THE TEN-YEAR, HITTING THAT 4.5 HANDLE, WHICH WE HAVE BEEN CALLING A KEY TECHNICAL LEVEL FOR THE TEN-YEAR HERE, AND AS YOU CAN SEE, WHAT IS THIS BUMP UP HERE? THAT IS, OF COURSE, OUR HOTTER THAN EXPECTED CPI PRINT, HITTING AT 8:30 A.M., PUSHING UP THE TEN-YEAR TO THAT 4.5 LEVEL, INVESTOR NOTES THIS MORNING AND SOME CONVERSATIONS I HAVE HAD SAYING THAT 4.7% IS THE NEXT KEY LEVEL TO LOOK AT WHEN IT COMES TO THE TEN-YEAR. ALSO, TAKING A LOOK AT THE 30-YEAR YIELD. THAT'S HITTING A LITTLE OVER 4.5% HERE. WE ALSO HAVE THE FIVE-YEAR NOTE. REALLY SEEING MOVEMENT ACROSS THE CURVE HERE. I ALSO WANT TO TRANSITION A LITTLE BIT, BECAUSE WE'RE NOT JUST SEEING THE STRENGTH IN THE TREASURY MARKET, WHICH INDICATES A HIGHER FOR LONGER ENVIRONMENT. WE'RE ALSO SEEING STRENGTH IN THE DOLLAR HERE. YOU CAN SEE HERE AS WELL THAT PUSH UPWARD WHEN IT COMES TO THAT CPI PRINT, SO YOU CAN REALLY SEE EVIDENCE ACROSS THE BOARD HERE, EVEN IF YOU TAKE A LOOK AT SOMETHING LIKE THE VIX UP THIS MORNING AND WITHIN THE TREASURY SPACE, SEEING INVESTORS PRICING IN THIS HIGHER FOR LONGER ENVIRONMENT, AND SEANA, I'M LOOKING AHEAD TO WHEN WE MIGHT SEE INVESTORS PRICING IN NOT ONLY LESS OF A CHANCE FOR RATE CUTS IN THE FALL AND THE SUMMER RATHER, BUT WHETHER OR NOT WE MIGHT SEE INVESTORS STARTING TO PRICE IN NOVEMBER AS THE FIRST POTENTIAL CHANCE FOR THE FED TO CUT RATES. >> THE LIKELIHOOD OF THAT, CERTAINLY RISING AFTER TODAY'S PRINT, AND WE HAVE SEEN THE SHIFT IN TERMS OF THE FED -- IN TERMS OF WHAT TRADERS ARE PRICING IN WHEN THE FED IS GOING TO CUT ITS RATE FIRST. >>> LET'S TALK ABOUT THAT MOVE, MADDIE, THAT YOU WERE JUST MENTIONING IN THE TEN-YEAR YIELD, BECAUSE TOUCHING THAT 4.5% LEVEL, THE FIRST TIME WE'VE SEEN THE TEN-YEAR TREASURY TOUCH THAT LEVEL THIS YEAR. WE WANT TO BRING IN KELSEY B BARROW, JPMORGAN ASSET MANAGEMENT FIXED INCOME PORTFOLIO MANAGER. FIRST, YOUR REACTION TO THIS MOVE HIGHER THAT WE HAVE SEEN IN YIELDS, AND NOW THAT WE'RE AT THAT 4.5% LEVEL, MADDIE WAS JUST MENTIONING 4.7% COULD BE THE NEXT LEVEL TO WATCH. WHAT DO YOU THINK? >> IT'S BEEN A LARGE MOVE BUT A RATIONAL MOVE. THE FED HAS BEEN HOLDING ON TO THE IDEA THAT THEY COULD CUT AS SOON AS JUNE AND DELIVER THREE CUTS THIS YEAR. AND THAT PATH TO THAT OUTCOME HAS NARROWED A LOT, AND AS A RESULT, THE MARKET HAS PRICED OUT THE NUMBER OF RATE CUTS TO LESS THAN TWO. BUT I THINK THAT RIGHT NOW, WE'RE DEALING WITH SOME EXTREMES. IF YOU LOOK BACK TO Q4, THAT WAS AN EXTREME. INFLATION UNDERSHOT WHAT THE TREND WAS, AND THE MARKET WAY OVERPRICED THE NUMBER OF RATE CUTS. THEY WERE PRICING AS MUCH AS SEVEN OR EIGHT RATE CUTS. NOW, WE'RE TESTING THE OTHER EXTREME. THESE EXTREMES TEND TO CREATE OPPORTUNITIES FOR INVESTORS, SO IF YOU WERE LOOKING FOR THAT ENTRY POINT TO LOCK IN YIELDS, YOU FOUND ANOTHER ONE TODAY WITH THIS MOVE HIGHER, PARTICULARLY IN THE FRONT END. >> I WAS JUST GOING TO SAY, WHERE IS THE BEST ENTRY FOR INVESTORS? YOU'RE THINKING TWO-YEAR? >> THE TWO, AND THE FIVE AND THE TEN-YEAR, THAT INTERMEDIATE PART OF THE MARKET, AND I THINK THE OTHER THING WE'RE REALLY FOCUSED ON RIGHT NOW IS NOT SO MUCH THE PATH OF THE FED, BUT IT'S THE STRENGTH OF THE CORPORATE FUNDAMENT FUNDA FUNDAMENTALS AND THE BALANCE SHEETS OF COMPANIES, SO THE PRIMARY PLACE WE'RE FOCUSING OUR RISK BUDGET IN FIXED INCOME PORTFOLIOS IS ON THE CREDIT SIDE AND A LITTLE BIT LESS IN FOCUSING ON THE DAY-TO-DAY OF WHAT THE FED IS DOING TO BE DOING. WILL THEY CUT IN JUNE OR SEPTEMBER? WILL THEY CUT IN DECEMBER? THE KEY, THOUGH, IS THAT EVEN THOUGH WE'RE PRICING OUT RATE CUTS, WE'RE NOT TALKING ABOUT RESTARTING RATE HIKES. AND THAT IS REALLY IMPORTANT FOR INVESTORS RIGHT NOW. YEAH, WE'RE TALKING ABOUT THE FED DELAYING, BUT WE'RE NOT TALKING ABOUT A REGIME SHIFT WHERE WE'RE TALKING ABOUT RATE HIKES AGAIN. >> IF THE FED DOES MOVE SIDEWAYS, MEANING THEY DON'T CUT, SO WE'RE IN THIS HIGHER FOR LONGER ENVIRONMENT, DO THOSE TRADES THEN STILL MAKE SENSE IF WE DON'T GET A RATE CUT BEFORE THE END OF THE YEAR? >> DO THINK IT STILL MAKES SENSE. WE'RE LOOKING AT BUILDING FIXAL INCOME PORTFOLIOS THAT ARE RELATIVELY HIGH QUALITY BUT STILL CAN SIGNIFICANTLY OUTYIELD THE U.S. AGGREGATE BOND INDEX. IF YOU LOOK AT THE U.S. AGGREGATE BOND INDEX, THE YIELD IS AROUND 5%, PROBABLY A LITTLE BIT HIGHER AFTER TODAY'S MOVE. WE CAN LOOK ACROSS THE UNIVERSE, NOT JUST TREASURYS, NOT JUST THE VERY HIGH-QUALITY STUFF, BUT CORPORATES, HIGH-YIELD, AND BUILD A PORTFOLIO WITH THE YIELD AROUND 6% TO 7% AND EVEN IF YIELDS JUST STAY AROUND HERE, THE RETURN IN YOUR FIXED INCOME PORTFOLIO SHOULD GENERALLY MATCH THE YIELD ON THE PORTFOLIO, ASSUMING WE'RE KIND OF IN A STABLE RANGE. SO, WE DO THINK IT MAKES SENSE. THE PUSHBACK WE HEAR A LOT IS THAT CREDIT SPREADS ARE REALLY TIGHT, SO THAT INCREMENTAL COMPENSATION THAT YOU'RE GETTING FOR BUYING CORPORATES VERSUS TREASURYS IS SMALL. WE WOULD SAY, YES, IT IS, BUT IT'S JUSTIFIED FOR THE FUNDAMENTALS, AND IF YOU LOOK AT OTHER TIME PERIODS WHERE THE ECONOMY WAS EQUALLY AS ROBUST, YOU SAW SIMILAR PERIODS WHERE SPREADS STAYED TIGHT FOR A LONG TIME, AND THEN THOSE PERIODS, IT'S BEST TO STAY INVESTED IN THE MARKET AND COLLECT THAT CARRY, CLIP THAT COUPON, AND GET THAT INCOME. >> WELL, YOU MENTIONED KIND OF INVESTMENT-GRADE CORPORATE BONDS. FOR INVESTORS WHO ARE SEEING A SELLOFF IN EQUITIES LIKE WE'RE SEEING TODAY, IS THAT A BETTER WAY TO OWN SOME OF THE NAMES LIKE A BIG TECH NAME, FOR EXAMPLE, TO AVOID SOME OF THE DAY-TO-DAY DIPS THAT WE MIGHT SEE IN EQUITIES THAT ARE NATURAL AFTER SOME OF THE WHIPSAWS IN VOLATILITY THAT WE'RE SEEING IN THE DATA? >> ABSOLUTELY. I THINK YOU WANT TO FOCUS ON DIVERSIFICATION IN YOUR PORTFOLIO, THINGS THAT ARE GOING TO KEEP YOU INVESTED, AND WHEN YOU SEE A MOVE LIKE WE DID TODAY WHERE THE TWO-YEAR IS UP 20 BASIS POINTS, THAT'S PROBABLY A 1.5 TO 2 STANDARD DEVIATION MOVE. THE KEY IS NOT TO GET PARALYZED. IT'S TO THINK ABOUT, WHAT ARE THE NEXT OPPORTUNITIES? WHAT WE'VE NOTICED IS THAT THERE IS STILL A LOT OF MONEY IN CASH RIGHT NOW, OVER $6 TRILLION IN CASH SITTING IN MONEY MARKET FUNDS, AND TYPICALLY, WHAT HAPPENS IS ONCE THE FED STARTS CUTTING RATES, YOU SEE THAT CASH POUR OUT BECAUSE THEY'RE NO LONGER RECEIVING THOSE SAME VERY ATTRACTIVE YIELDS, AND CHASE RETURNS IN OTHER ASSET CLASSES. SO, RIGHT NOW, THIS IS AN OPPORTUNITY TO GET AHEAD OF ULTIMATELY WHAT WE THINK IS GOING TO BE THE NEXT MOVE BEING A CUT AND DIVERSIFICATION OUT OF CASH INTO OTHER ASSETS. >> KELSEY, WHEN YOU TAKE A LOOK AT THE CPI PRINT TODAY, WE'RE GOING TO GET PPI TOMORROW. WHAT DO YOU EXPECT TO SEE FROM THAT, GIVEN WHAT WE JUST SAW NOT TOO LONG AGO IN THE PCE PRINT? >> THAT'S A REALLY GREAT POINT, BECAUSE THE FED'S TARGET FOR INFLATION, THE WAY THAT THEY ASSESS INFLATION PROGRESS, IS USING THE PCE, NOT THE CPI. SO, THE DATA WE GOT TODAY WAS CPI. TOMORROW, WE GET SOMETHING CALLED PPI, THE PRODUCER PRICE INDEX, AND WITH THE COMBINATION OF THE CPI AND THE PPI, WE CAN PROJECT WHAT WE THINK PCE IS GOING TO BE, WHICH, AGAIN, IS WHAT THE FED IS ULTIMATELY LOOKING AT. NOW, THERE'S A LOT OF WRINKLES TO THIS STORY, BUT ESSENTIALLY, PCE, WHICH IS THE FED'S PREFERRED METRIC, IS RUNNING A HUNDRED BASIS POINTS OR 1% SLOWER THAN THE PACE OF INFLATION IN CPI. SO, WE HAVE PART OF THE STORY RIGHT NOW, BUT WE DON'T HAVE ALL OF THE STORY RIGHT NOW, AND SOME OF THE CATEGORIES THAT HAVE BEEN PARTICULARLY HOT IN THE CPI, THE ONE I WOULD POINT TO IS AUTO INSURANCE, WHICH IS RUNNING AROUND 20% ANNUALIZED RATE. THAT DOES NOT TRANSLATE INTO THE PCE. THE WAY THEY MEASURE AUTO INSURANCE, THIS IS A LITTLE WONKY, BUT IT'S DIFFERENT, AND THAT'S ONE OF THE REASONS YOU'RE SEEING THIS WEDGE BETWEEN CPI AND PCE GROW. >> MAKES A LOT OF SENSE. GREAT JOB EXPLAINING IT, BECAUSE I THINK A LOT OF PEOPLE DON'T UNDERSTAND THE NUANCES AND THE DIFFERENCES AND WHY THERE IS THAT 100-BASIS-POINT GAP THAT YOU WERE JUST TALKING ABOUT, AND WHAT EXACTLY THAT MEANS FOR THE FED'S POSSIBLE NEXT MOVE. KELSEY, THANKS SO MUCH FOR COP COMING IN TODAY. >>> COMING UP, OUR VERY OWN BRAD SMITH TOOK A QUICK TRIP UP TO BOSTON, ALWAYS ON THE MOVE, AND SPOKE WITH THE CEO OF NEW BALANCE. WE'VE GOT THOSE DETAILS FOR YOU AND PART OF THAT CONVERSATION WHEN WE COME BACK. ♪ >>> NEW BALANCE IS BACK, AND TAKING ON HEAVYWEIGHTS LIKE NIKE AND ADIDAS AS THE SNEAKER BATTLE CONTINUES TO BE HOT. OUR VERY OWN BRAD SMITH WENT TO BOSTON TO SPEAK WITH JOE PRESTON. THEY TALKED ABOUT HOW HIS COMPANY IS INNOVATING TO KEEP UP WITH THE COMPETITION FOR THIS WEEK'S "LEAD THIS WAY." BRAD, THANK YOU SO MUCH FOR JOINING US AND BRINGING US THIS FANTASTIC PIECE. TALK TO ME ABOUT WHAT THE BIGGEST TAKEAWAY WAS FOR YOU. >> THE BIGGEST TAKEAWAY IS THAT NEW BALANCE IS BACK. THIS IS A 1909-FOUNDED COMPANY PURCHASED BY JIM AND ANN DAVIS DECADES LATER, AND WHAT THEY DID WAS ESSENTIALLY SAID, THIS IS MORE THAN SHOE INSOLES. THIS IS ALL ABOUT PUTTING A SHOE, PUTTING A SILHOUETTE AROUND THE INSOLE THEY WERE KNOWN FOR. THAT WAS THE BUSINESS THEY PURCHASED, AND FOR JOE PRESTON, TRUSTING IN HIM WITH STEWARDING THIS COMPANY FORWARD INTO THE NEXT GENERATION. IT'S A COMPANY THAT, OF COURSE, HAD TO CAPITALIZE ON TAYLOR SWIFT WEARING THE LATEST ITERATION OF THE RETRO SHOES AROUND, ONE OF THE MAJOR SILHOUETTES THAT TOOK OFF LAST YEAR. IT'S A COMPANY THAT'S SEEN A RISE IN POPULARITY AMONG THE SILHOUETTES THAT GET PURCHASED ON RESALE PLATFORMS AS WELL. STOCK X, GOAT GROUP DATA THAT WE'VE SEEN HAS SEEN THEM IN THE TOP 16 SELLING SILHOUETTES REPEATEDLY AND ESPECIALLY OVER THE COURSE OF THE LAST YEAR, AND I THINK ONE OF THE FINDINGS THAT I WAS REALLY ABLE TO TAKE AWAY FROM THE CONVERSATIONS WITH JOE WAS REALLY JUST BASED AROUND HOW HE IS CAPITALIZING ON THESE MOMENTS WHERE WE'RE ALL TALKING ABOUT THE DAD SHOE, THE DAD HATS, THE DAD BODIES, THE "CALL HER DADDY" PODCASTS, ALL OF THOSE THINGS AND MORE, AND MAKING SURE THAT NEW BALANCE IS AT THE CENTER OF THE CONVERSATION AND ALSO CONTINUING TO PUSH THE ENVELOPE WITH EVEN MANUFACTU MORE RESEARCH. SOME OF THAT RESEARCH AND INNOVATION, YOU'LL SEE IN THIS CLIP HERE. >> THIS IS A BRAND-NEW FACILITY THAT WAS BUILT WITHIN THE TRACK. IT'S OUR NEW INNOVATION CENTER, AND THIS HELPS TO TEST THE RESILIENCY OF THE MID SOLE AND HELPS TO TEST ENERGY RETURN, AND IT'S USED THROUGHOUT THE DEVELOPMENT PROCESS TO MAKE SURE THAT WE HAVE THE OPTIMAL AMOUNT OF CUSHIONING IN THE MID SOLE. >> HOW MANY TIMES DO YOU KIND OF HAVE TO GO BACK AND FORTH TO SAY, THIS IS NOT ENOUGH OF THE BOUNCE THAT OUR USERS, OUR RUNNERS ARE LOOKING FOR? >> WE HAVE THIS, AND WE ALSO HAVE TESTING. WE HAVE ATHLETES THAT ARE WEARING THE PRODUCT AND EVERYDAY RUNNERS THAT ARE WEARING THE PRODUCT, AND WE TAKE THAT QUALITATIVE FEEDBACK, TAKE IT WITH IN QUANTITATIVE FEEDBACK, THAT'S VETTED TO OUR DEVELOPERS. >> WHAT IS THAT NEXT CHEMICAL COMPOUND THAT YOU'RE REALLY EXPERIMENTING WITH NOW THAT GETS YOU EXCITED ABOUT THE FUTURE FOR NEW BALANCE? >> WE DO BELIEVE THAT THE NEXT BIG REVOLUTION IS GOING TO COME IN MATERIALS. I FUNDAMENTALLY BELIEVE THAT, AND I THINK IT WILL COME FROM PLANT-BASED, SOMETHING THAT WILL REVOLUTIONIZE THE INDUSTRY. >> YOU SAW THAT BOUNCE RIGHT THERE. THAT WAS REALLY SHOWING THE DISBURSEMENT OF THE MATERIALS THAT GO INTO THE SOLE OF OUR SHOE AND GIVE US THAT REBOUND. WHAT IS THAT FEELING THAT YOU LOOK FOR WHEN YOU GO FOR A RUN, SEANA, FOR INSTANCE? >> I WOULD LOVE -- YOU'RE NEVER GOING TO TURN DOWN ANY SORT OF BOUNCE. I HAVE NEVER RUN IN NEW BALANCES. I HAVE TO TRY THAT OUT AFTER SEEING THE SMASH LAB. BUT I THINK YOU'RE ALWAYS LOOKING FOR COMFORT, LOOKING FOR SOMETHING THAT GIVES YOU AN EXTRA SPRING IN YOUR STEP, AND I THINK THAT IS WHAT NEW BALANCE NEEDS IN ORDER TO CAPTURE MORE OF THOSE ATHLETES, AND YOU WERE JUST MENTIONING BEFORE WE WENT TO AIR THAT THEY HAVE A NUMBER OF KEY PARTNERSHIPS WITH ATHLETES WHO HAVE HAD A TREMENDOUS YEAR THAT'S GOING TO HELP SALES. >> GO DOWN THE LIST. YOU GOT COCO GAUFF COMING OFF A U.S. OPEN WIN LAST YEAR. YOU'VE GOT, OF COURSE, SHOHEI OHTANI. SYDNEY McLAUGHLIN, GOING TO BE PARTICIPATING AND COMPETING AND REPRESENTING TEAM USA IN THE PARIS OLYMPICS THIS SUMMER AS WELL, WHO IS ALREADY A GOLD CHAMPION MEDALIST AS WELL FOR THE U.S. IN THE RELAYS, AND SO SHE'S GOT AN EXCLUSIVE PARTNERSHIP. I HAD TO PICK UP SOME OF THOSE SHOES FOR MY OWN SIGNIFICANT PARTNER. SO, MAKING SURE THAT WE GOT IN ON THAT SPECIAL. >> BRAD HAS HIS NEW BALANCES ONLY RIGHT NOW TOO. >> ROCKING THE KICKS. >> THERE YOU GO. >> IF YOU WATCH THE VIDEO, YOU CAN SEE BRAD RUNNING AT AN ALL-OUT PACE WHILE CONDUCTING AN INTERVIEW. I HIGHLY RECOMMEND WATCHING THAT. BRAD, IT WAS A SIGHT TO SEE. THANK YOU SO MUCH FOR JOINING US, AND OF COURSE, TO BRAD AND THE GREAT PRODUCTION TEAM BEHIND HIM ON THIS PIECE. STAY TUNED FOR BRAD'S FULL INTERVIEW WITH JOE PRESTON. THAT'S COMING OUT TOMORROW AT 10:40 A.M. EASTERN. YOU WON'T WANT TO MISS IT. >>> LET'S DO A FINAL CHECK OF THE MARKETS HERE. AGAIN, WE ARE STILL LOOKING AT SOME LOSSES ACROSS THE BOARD, GETTING BACK TO THE HEADLINE STORY OF THE DAY. CPI PRINT COMING IN HOTTER THAN EXPECTED FOR THE THIRD MONTH IN A ROW. WE ARE SEEING SELLING ACROSS THE BOARD FOR EQUITIES. YOU GOT THE DOW OFF THE LOWS OF THE DAY, STILL DOWN JUST OVER 400 POINTS. NASDAQ AND THE S&P, BOTH OFF JUST ABOUT 1%. MORE ON THE SELLING ACTION THAT WE ARE SEEING AND ALSO THE SPIKE THAT WE ARE SEEING IN YIELDS. COMING UP NEXT, OUR BRAND-NEW SHOW, "WEALTH!." IT'S DEDICATED TO ALL YOUR PERSONAL FINANCE NEEDS. BRAD SMITH IS GOING TO HEAD FROM HERE TO THE STUDIO. HE'S GOT YOU FOR THE NEXT HOUR. STAY TUNED. ♪ >>> WELCOME TO "WEALTH." I'M BRAD SMITH AND THIS IS YAHOO! FINANCE'S NEWEST GUIDE TO BUILDING YOUR FINANCIAL FOOTPRINT. OUR EXPERTS WILL GIVE YOU THE RESOURCES, TOOLS, TRICKS AND TIPS YOU NEED TO GROW YOUR MONEY. WE'VE GOT A BIG SHOW AND BIG STORY TODAY. STOCKS ARE PLUMMETING RIGHT NOW AFTER A HOTTER THAN EXPECTED INFLATION PRINT SPOOKS INVESTORS. TAKE A LOOK AT THE DOW, S&P 500 AND NASDAQ ALL IN TEGIVE TERRITORY. DOW DOWN BY 1%, S&P 500 AND NASDAQ THE SAME, ONE PERCENTAGE BASIS. THIS COMES AFTER WE'VE SEEN THE CPI PRINT COME IN AND COMPLICATE THE FEDERAL RESERVE'S IMPLICATIONS. LET'S START WITH EQUITIES. A RED-HOT SELLOFF. STOCKS SELLING AFTER A THIRD STRAIGHT HOTTER THAN EXPECTED INFLATION PRINT. YAHOO! FINANCE REPORTER JARED BLIKRE IS HERE TO BREAK DOWN ALL THE ACTION. WALK US THROUGH WHAT'S GOING ON RIGHT NOW? >> THANK YOU, BRAD. WE'RE SEEING A BIG SPIKE-UP IN YIELDS. ALL THE RED IN THE U.S., SMALL CAPS LEADING THE WAY DOWN, DOWN BY 2.5%. ARGUABLY MORE SENSITIVE TO THE RATE SITUATION AND ALSO A SURGING DOLLAR. LET'S GET TO THAT RIGHT NOW AND DOUBT THE CHASE. HERE IS THE U.S. DOLLAR INDEX. HARD TO SEE RIGHT HERE. I'M PUT CANDLESTICKS UP. THIS IS A BIG DAY. YOU CAN SEE NOW WE'RE TAPPING ON THE HIGHEST LEVELS SINCE ABOUT LAST NOVEMBER OR DECEMBER. THERE WE GO. I'LL PUT A LINE CHART SO YOU CAN SEE THAT A LITTLE BETTER. THEN LET'S GO TO THE TEN-YEAR T-NOTE YIELD. THAT'S ADVANCING BY 13 BASIS POINTS. THAT'S A HUGE MOVE. THIS IS A ONE-YEAR CHART. THE TREND IS UP HERE. NOW WE'RE AT THE 4.5 BIG PSYCHOLOGICAL LEVEL. SO WE MAY PAUSE HERE. NOW I THINK TRADERS WILL PUT 5% BACK IN THEIR SIGHTS. WE'LL HAVE TO SEE WHAT'S THERE. AS A GENERAL RULE, HIGHER RATES TEND TO WEIGH ON THOSE LONGER DURATION STOCKS. NOW, HERE WE SEE REAL ESTATE AND UTILITIES TAKING THE BIGGEST DROPS. REAL ES SEDATE DOWN 4%. THAT'S VERY SENSITIVE TO THESE HIGHER RATES. UTILITIES, SAME VOTE THERE. WE'RE ALSO SEEING CONSUMER DISCRETIONARY, TECH, MATERIALS DOWN BY MORE THAN 1 .3%. THAT'S DESPITE WTI CRUDE FALLING AFTER A SLIGHTLY BEARISH WEEKLY REPORT. PSE IS SMALL CAP OIL. THAT'S ALSO IN THE GREEN. CANNABIS BARELY IN THE GREEN. FOR THE MOST PART, LOTS OF RED. THE DARK RED, 4.57%, KOREAN ETF EWY. THAT'S A LEADER FOR THE CHIP SPACE. SOLAR ENERGY, TAN DOWN 4%, REERJS NALL BANKS DOWN 4% AND HOME BUILDERS DOWN ABOUT 3%. WE CAN REALLY SEE WHAT'S HAPPENING INSIDE THE SEMICONDUCTOR MARKET HERE. NVIDIA, THE PERENNIAL, WE CAN CATCH A BIT UP 1.3%. FOR THE MOST PART, WE'RE LOOKING AT A LOT OF PRESSURE AROUND U.S. EQUITIES. >> CAN YOU TAKE A LOOK AT BITCOIN OR CRYPTOCURRENCY MORE BROADLY? I WANT TO SEE HOW THE RISKIER PARTS OF THE ASSET SPACE ARE DOING RIGHT NOW. >> IN THE PAST BITCOIN HAS REACTED AS A MULTIPLE OF WHATEVER U.S. STOCKS ARE DOING. WE'RE NOT SEEING THAT TODAY. BITCOIN IS ONLY DOWN ABOUT .8%. LET ME GIVE YOU THE FIVE-DAY VIEW. NOT MUCH OF A HICCUP THIS MORNING WHEN WE GOT THE REPORT AROUND 8:30. WITHIN THE CONTEXT OF THE MARGER MOVES AROUND BITCOIN, THAT'S NOT MUCH. WE'VE RECLAIMED THE PRIOR LEVELS. RIGHT BACK TO WHERE WE STARTED FROM BEFORE THAT REPORT. BITCOIN SLUGGING THIS OFF. INTERESTING TO SEE THAT DYNAMIC AT PLAY AT WELL. >> REALLY INTERESTING. A LOT TO CONTINUE TO TRACK, JUST COMING IN BLACKROCK'S RICK RIEDER, MUCH CURRENT DETAIN, IMPORTANTLY WHAT THE FEDERAL RESERVE IS MOST FOCUSED ON. UNFORTUNATELY IT'S HARD TO SEE IT AS ANYTHING OTHER THAN A SETBACK, HE SAYS. JARED, THANK YOU FOR TAKING THE TIME TO BREAK DOWN THE MARKET ACTIVITY. >>> AMERICANS PLAGUED BY SURGING PRICES OVER THE PAST 20 MONTHS CONTINUE TO FACE STRAIN AS THE COST OF MEETING EVERYDAY NECESSITIES REMAINS STUBBORNLY HIGH. THE LABOR DEPARTMENT'S MOST RECENT CPI REPORT SHOWING THE PRICE OF EVERYDAY GOODS ROSE .4% IN MARCH WITH RISING SHELTER AND GAS COSTS DRIVING OVER HALF OF THE HEADLINE CPI INCREASE LAST MONTH. WHAT TYPES OF IMPACT DO THOSE PRICES HAVE ON YOUR EVERYDAY FINANCES? YAHOO! FINANCE'S REPORTER DANI ROMERO AND MOLLY MOOREHEAD HAVE MORE. DANI, TALK TO UGH ABOUT THE HIGH SHELTER COSTS YOU'RE TRACKING. >> BRAD, HOUSING COSTS REMAIN STICKY. SHELTER INFLATION IN AT 5.7% ANNUALLY IN MARCH. THAT'S LOWER THAN LAST YEAR IN MARCH WHERE SHELTER INFLATION PEAKED AT 8.2% ANNUALLY. ECONOMISTS AREN'T EXPECTING IT TO EASE QUICKLY ANY TIME SOON. TAKE A LISTEN TO PIMCO ECONOMIST TIFFANY WILDING. >> THE FACT THAT YOU HAVE A BROADER SHORTAGE OF HOUSING WITHIN THE HOUSING MARKET AS A RESULT OF YEARS OF UNDERBUILDING SINCE THE GREAT FINANCIAL CRISIS SUGGESTS TO US AS WELL THAT YOU WILL PROBABLY SETTLE IN AT RENTAL INFLATION LEVELS THAT WERE ABOVE THOSE OF THE PREPANDEMIC PERIOD. IT LOOKS LIKE RENTAL INFLATION IS GOING TO BE STICKY. >> HOUSING COSTS WILL CONTINUE TO REMAIN STICKY. WHAT'S CURRENTLY GOING ON IN THE RENTAL MARKET? RENT PRICES ARE INCREASING MONTH OR MONTH BUT DOWN ANNUALLY. THE AVERAGE AT $1600. SOME EXPERIENCING HIGHER RENTS DUE TO LOW INVENTORY. RENT INCREASED IN 81 OUT OF 100 CITIES IN THE U.S. IT'S A DIFFERENT STORY IN THE SUNBELT AREA LIKE AUSTIN, ATLANTA AND NASHVILLE. THEY'RE DEALING WITH PRICE DECLINES. MEANWHILE, KEEPING YOUR HOME IN GOOD SHAPE IS EXPENSIVE. THE PRICE TO REPAIR HOUSEHOLD ITEMS STAYED WITHIN RANGE OF 18% ANNUALLY. THAT INCLUDES THINGS TO FIX HOUSEHOLD APPLIANCES, PEST CONTROL AND BASIC UPKEEP LIKE GARDENING. THE COST OF ELECTRICITY ALSO JUMPED 5% ANNUALLY. THE RISE IN ENERGY PRICES DIDN'T HELP ON THAT FRONT. OVERALL CONSUMERS CONTINUE TO FEEL THE PINCH, ESPECIALLY WHEN MAINTAINING A GOOD HOME. >> MAJOR COMPONENT FACTORED INTO THIS CPI PRINT. DANI, THANK YOU. MOLLY, I WANT TO PIVOT TO YOU. TALK TO US ABOUT THE UPTICK IN ENERGY COSTS. >> GAS PRICES UP 1.7 PR IN MARS FOLLOWING A 4% INCREASE IN FEBRUARY. IN SOME WAYS THIS IS TYPICAL. GAS TENDS TO GET MORE EXPENSIVE HEADING INTO THE SPRING AND SUMMER TRAVEL SEASON. RIGHT NOW THE AVERAGE COST OF A GALLON OF GAS IS ABOUT $3.62 NATIONALLY. BUT THAT IS NOT ALL FOR DRIVERS. AUTO INSURANCE WHICH WE'VE TALKED ABOUT A LOT JUST CONTINUES TO SPIRAL. IT WAS UP 22% YEAR-OVER-YEAR FROM THIS MARCH READING. CAR REPAIRS ALSO MORE EXPENSIVE, UP OVER 8%. IF THREES GOOD NEWS FOR DRIVERS, THE ACTUAL COST OF CARS FINALLY IS SLOWING DOWN. THE PRICE GROWTH FOR A NEW CAR AND A USED CAR WHICH WAS REALLY HIGH DURING THE PANDEMIC, THAT'S STARTING TO SETTLE DOWN. >> DANI ROMERO AND MOLLY MOOREHEAD, THANKS FOR DIVING INTO THE DETAILS OF THIS DATA WITH US THIS MORNING. APPRECIATE IT. >> THANKS, BRAD. >>> STOCKS FALLING AS HOTTER THAN EXPECTED INFLATION IN MARCH PUT INVESTORS ON EDGE. THIS IS THE THIRD HOTTER THAN EXPECTED REPORT. IT COMPLICATES THE FED'S NEXT MOVE ON INTEREST RATES AS THE CENTRAL BANK WORKS TO BRING DOWN INFLATION TO ITS 2% TARGETS. THE BIG PRESSURE IS ON PRICES. SHELTER ACCOUNTED FOR OVER 60% OF THE TOTAL 12-MONTH INCREASE IN CORE PRICES. ENERGY PRICES LARGELY TO BLAME FOR THE RISE IN HEADLINE FIGURE, AMERICANS ARE PAYING MORE AT THE PUMP. HERE WITH MORE WE'VE GOT STEVE SOSNICK, INTERACTIVE BROKER'S CHIEF STRATEGIST ALONGSIDE CHRIS VERSACE. GREAT TO HAVE BOTH OF YOU WITH US TODAY. FIRST AND FOREMOST, I'VE GOT TO WONDER HERE, STEVE, WHAT WENT THROUGH YOUR MIND WHEN YOU SAW THIS REPORT COME OUT, SAW THE FIGURE DROP AND YOU SAW THE MARKET REACTION LIKE THIS? >> GOOD MORNING, BRAD. LITERALLY I TWEETED MY FIRST RESPONSE WHICH WAS JUST "GULP." IT WAS A BIT OF A STUNNER. WHEN YOU THINK ABOUT IT, WE REALLY WERE UNCHANGED ON THESE METRICS VERSUS MONTH OVER MONTH. REMEMBER IT'S MUCH MORE OSTENSIBLE TO LOOK MONTH OVER MONTH THAN YEAR-OVER-YEAR. YOU WANT TO SEE THE ONE MONTH OF FRESH DATA RATHER THAN THE 11 MONTHS OF OLD DATA. WITHIN A MATTER OF SECONDS, MY THOUGHTS CHANGED TO WHY -- HOW CAN THE FED REALLY CONSIDER CUTTING INTEREST RATES IN THIS ENVIRONMENT. REMEMBER, THE FED HAS THE DUAL MANDATE. FULL EMPLOYMENT WHICH WE SAW AS RECENTLY AS LAST FRIDAY, STILL SEEMS TO BE IN PLACE, AND STABLE PRICES, WHICH WE GOT ANOTHER REMIND TORE DAY THAT THAT PART OF THE MANDATE IS NOT IN PLACE. WE DON'T HAVE THE ABILITY TO CUT RATES. THE MARKET HAS ADJUSTED TO THAT. I THINK THE MARKET WAS REALLY JUST NOT IN THE MOOD FOR AN UPSIDE SURPRISE IN INFLATION, AND THIS IS THE RESULT OF WHAT WE'RE SEEINGTION, AND THE BOND MARKET CERTAINLY IS NOT IN LOVE WITH THESE NUMBERS. >> CHRIS, I WAS LOOKING AT YOUR TWITTER OR X OR WHATEVER WE'RE CALLING IT TODAY, THE PROFILE AS WELL. YOU WERE OF THE SAME THINKING. FEWER RATE CUTS THAN EXPECTED COMING. WHAT DOES THE REALITY OF THAT LOOK LIKE AS WE GO INTO NOW AND IN THE MIDST OF THE SECOND QUARTER AND STARING DOWN PERHAPS A BACK HALF OF THIS YEAR TYPE OF CUTTING ENVIRONMENT, IF ANY CUTS AT ALL? >> I WILL SAY THIS, BRAD, I WASN'T SURPRISED BY THE HOTTER THAN EXPECTED PRINT. IF WE FOLLOW THE DATE TAX LOOK AT MARCH PMI REPORTS, INPUT PRICES, WAGE DATA, EVEN COMMENTS FOUND IN YESTERDAY'S MARCH NFIB SMALL BUSINESS OPTIMISM INDEX. SMALL BUSINESSES IN PARTICULAR STRUGGLING WITH INFLATION. NOT OVERLY SURPRISED, BUT I THINK WHEN YOU LOOK AT THE DATA, PARTICULARLY THE CORE CPI ON A YEAR-OVER-YEAR BASIS FOR THE LAST SIX MONTHS, IT'S TRAPPED BETWEEN THIS 3.8%, 4.0% RANGE, EFFECTIVELY STALLING OUT FROM THE PROGRESS WE SAW IN 2023 THE FIRST 6-9 MONTHS. I REALLY DO THINK THE FED IS -- THEY'RE IN A VERY TOUGH POSITION HERE. WE ARE SEEING RATE EXPECTATIONS FALL. I'VE BEEN IN THE CAMP THAT WE'LL PROBABLY SEE TWO, MAYBE ONE RATE CUT. I THINK THE MARKET IS COMING AROUND TO THAT. BUT REMEMBER, BRAD, WE ALSO HAVE THE PPI REPORT TOMORROW. IF YOU LOOK AT THE TREND OF LATE IN A NUMBER OF DIFFERENT COMMODITIES, THEY ARE HIGHER. THAT'S GOING TO IMPACT THE PPI REPORT. AND THE PPI DATA TENDS TO LEAD THE CPI BY A COUPLE MONTHS. >> CERTAINLY HERE, MARKETS CAN BE UPSET, THEY CAN INGEST THIS DATA FOR A PERIOD OF TIME AND HAVE THE REACTION LIKE WE'RE SEEING RIGHT NOW, BUT EVENTUALLY STRATEGY HAS TO EMERGE. STEVE, I WONDER IF THERE ARE ANY POCKETS OF RESILIENCE YOU'RE SEEING EVEN AMID THE PULLBACK WE'RE WATCHING RIGHT NOW. >> IT WAS INTERESTING. THE MARKET CAME OFF ITS LOWS TODAY PRETTY MUCH AS NVIDIA STARTED TO TURN HIGHER. THE FAITHFUL ARE STILL OUT THERE WITH NVIDIA AFTER IT HAD A -- WHAT'S CALLED A CORRECTION. I THINK SOME OF THE WEAKNESS WE SAW WITH NVIDIA HAD TO DO WITH TAXES. I THINK PEOPLE WHO TRADED IN AND OUT OF IT IN 2023 HAVE TO PAY THE TAX MAN ON MONDAY. REALITY -- ENERGY IS WHAT'S LEADING. THAT DOES CAUSE A PROBLEM BECAUSE THE RATIONALE FOR ENERGY LEADING THE MARKET IS NOT A POSITIVE ONE FROM AN INFLATION POINT OF VIEW BECAUSE IT MEANS THAT ENERGY PRICES ARE RISING. IT MEANS OIL PRICES ARE UP, WHICH THEY ARE. ONE CAN ARGUE WE PUT IN A RELATIVELY MEDIUM-TERM DOUBLE BOTTOM IN THE PRICE OF CRUDE. THAT'S A DEFENSIVE -- A, IT'S A DEFENSIVE SECTOR. AND B, IT'S SORT OF AN INFLATIONARY HEDGE IN SOME REGARD. IT'S A LITTLE DISMAYING TO SEE THAT LEADING, ALTHOUGH RIGHT NOW IT'S A SAFE HAVEN BECAUSE MOST OF THE BIG ENERGY STOCKS PAY A SOLID DIVIDEND AND ADD A LITTLE BIT OF BALLAST TO YOUR PORTFOLIO. IT'S NOT A GREAT SIGN FOR THE MARKETS GOING FORWARD NECESSARILY. >> NOT A GREAT SIGN, AND NOT A GREAT TIME AS WELL. IT'S COMING UP AS A PRELUDE HERE FOR EARNINGS SEASON. CHRIS, I WONDER, IF YOU'RE THINKING ABOUT SOME OF THIS WEAKNESS AND HOW THAT CARRIES THROUGH THE POST ECONOMIC DATA, AND HOW IT CARRIES THROUGH TO THE EARNINGS SEASON THAT'S TEEING OFF. >> I THINK THE MARCH QUARTER EARNINGS SEASON IS GOING TO BE REALLY IMPORTANT, BRAD. NOT SO MUCH FOR THE MARCH QUARTER, BUT REALLY FOR THE GUIDANCE. I SAY THAT BECAUSE WHEN YOU STEP BACK, THE MARKET CONSENSUS FORECAST FOR S&P 500 EARNINGS THIS YEAR IS UP ABOUT 10.6%, SOMETHING LIKE THAT. IT REALLY, REALLY PICKS UP IN THE JUNE QUARTER AND STRENGTHENS IN THE BACK HALF OF THE YEAR. SO GUIDANCE IS GOING TO BE KEY. HOW DO THESE INFLATION FACTORS FIT IN? ARE COMPANIES STILL SPENDING IN AREAS WE THINK THEY ARE. AI, DATA CENTER, CLOUD, INFRASTRUCTURE SPENDING IN OTHER AREAS. THAT'S WHAT WE'RE GOING TO WANT TO SEE. IF THEY'RE FEELING THE PINCH OF THESE HIGHER INFLATION PRESSURES, DOES THAT MEAN THOSE EARNINGS EXPECTATIONS FOR THE MARKET HAVE TO COME DOWN? >> STEVE AND CHRIS, I KNOW OUR TEAM WAS LIGHTING UP YOUR PHONES TRYING TO GET YOU TO COME ON. THIS IS THE REASON WHY. GREAT ANALYSIS AND INSIGHT AND PERSPECTIVE AS ALWAYS. THANK YOU FOR TAKING THE TIME, STEVE SOSNICK AND CHRIS VERSACE. >>> COMING UP, IS YOUR RETIREMENT PROTECTED FROM INFLATION? WE BREAK DOWN WHAT YOU CAN DO TO PROTECT YOUR FUTURE. >>> AND INFLATION-PROOF INVESTMENTS YOU MIGHT WANT TO MAKE. THAT'S AFTER THE BREAK. >>> YOUR RETIREMENT ACCOUNTS MAY HAVE TAKEN A LITTLE BIT OF A HIT TODAY. AFTER MARCH INFLATION DATA CAME IN HOTTER THAN EXPECTED SENDING STOCKS PLUNGING IN EARLY MARKET TRADING. BEFORE YOU SCRAMBLE TO REALLOCATE ALL YOUR INVESTMENTS, WE'RE BRINGING IN YAHOO! FINANCE CONTRIBUTOR ROSS MACK. GOOD TO HAVE YOU IN STUDIO WITH US. DO PEOPLE NEED TO INFLATION-PROOF THEIR RETIREMENT ACCOUNTS? >> SHORT ANSWER AND LONG ANSWER. SHORT ANSWER IS, PLEASE, PEOPLE, DON'T DEVIATE FROM YOUR LONG-TERM INVESTMENT PLANS. OVER THE COURSE OF HISTORY, ANY TIME THERE'S A SHOCK TO THE MARKET, SURE THE MARKET RECOVERS AND GOES ON TO MAKE NEW HIGHS. I HAD MY AUNT CALL ME DURING THE COVID CRISIS. OH, MY GOD, WHAT SHOULD I DO WITH MY RETIREMENT. AUNTIE, YOU'RE GOOD. AND SHE LATER THANKED ME. AM I GETTING EXPOSURE TO ASSET CLASSES THAT ARE GIVING GOOD INFLATION HITS. WE'VE SEEN ONE OF THE BEST INFLATION HEDGES IS BITCOIN. NOW, IF YOU FELL VICTIM TO SAYING I DON'T WANT TO OWN BITCOIN BECAUSE X, Y, Z CEO SAID IT'S A PET ROCK, A TULIP. IT IS AN ASSET CLASS THAT SOME ASSET MANAGERS ARE GOING HEAVY INTO. FROM A RISK ADJUSTMENT STANDPOINT, YOU CAN SEE FROM AN ASSET ALLOCATION IT'S OKAY TO GET LONG-TERM EXPOSURE INTO DIFFERENT ASSET CLASSES THAT CAN PROVIDE INFLATION HEDGING. >> A LOT OF PEOPLE LOOKING FOR ACTIONABLE ADVICE, ESPECIALLY WITH THEIR RETIREMENT CUTS. EVEN IF THEY HAVE A RETIREMENT ACCOUNT AND PERHAPS A DIFFERENT ACCOUNT THAT THEY TRADE MORE ACTIVELY IN AS WELL. THEY'RE TRYING TO FIGURE OUT, OKAY, I'VE SEEN A RUN-UP. I'VE SEEN NEW HIGHS FOR COMPANIES LIKE NVIDIA THAT ALL CATCH HEADLINES. WHAT SHOULD I DO RIGHT NOW? WHAT IS THE ADVICE OR THE REMINDER TO THEM? >> I THINK IT'S IMPORTANT TO UNDERSTAND WHAT YOUR OVERALL LONG-TERM STRATEGY IS. ONCE AGAIN, WE'RE NOT DEVIATING. HOWEVER, IN THIS INSTANCE, YOU WANT TO BE DOLLAR COST AVERAGING. IT'S HARD TO SAY IS NVIDIA, BITCOIN OR APPLE GOING TO BE UP HIGHER OR LOWER OVER THE COURSE OF THE NEXT FEW MONTHS OR WEEKS. BUT OVER THE LONG COURSE, YOU'RE SAYING, OKAY, I WANT TO GET EXPOSURE AND I DON'T WANT TO HAVE TO THINK ABOUT IT. DOLLAR COST AVERAGING IS ALWAYS GOING TO BE YOUR BEST FRIEND. >> ROSS, STICK WITH US. WE HAVE MUCH MORE TO DISCUSS AS MAJOR INDICES ARE UNDER PRESSURE AFTER INFLATION COMES IN HOTTER THAN EXPECTED FOR THE MONTH OF MARCH. THAT MEANS EVERYDAY ITEMS ARE MORE EXPENSIVE THAN THEY WERE LAST YEAR, AT LEAST IN AGGREGATE. ALL THAT MONEY IN YOUR SAVINGS ACCOUNT THAT'S BEEN SITTING AROUND IS WORTH A LITTLE LESS. TO BREAK DOWN WHERE YOU CAN INVEST IN HEDGE INFLATION, HERE WITH US IN STUDIO, PART OF OUR ETF REPORT BROUGHT TO US BY INVESCO QQQ. GREAT TO SEE YOU IN PERSON. >> GREAT TO BE BACK. >> LET'S START THERE. WHEN WE TALK ABOUT HOW PEOPLE ARE TRYING TO INFLATION-PROOF THEIR INVESTMENTS, WHAT IS THE FIRST THOUGHT THAT SHOULD COME TO THEIR MIND? >> IT'S FUNNY YOU MENTIONED BITCOIN. THAT'S ONE THAT'S COME UP A LOT. IT'S UP 71% SO FAR THIS YEAR. IT'S TOUGH TO SAY THAT'S A DIRECT INFLATION HEDGE, BUT CLEARLY THAT'S PART OF THE BITCOIN STORY. FOR ETF INVESTORS, THAT'S NOW A VIABLE TARGET. WE'VE HAD 14 BILLION FLOW INTO THE NINE NEW ETFs TARGETING BITCOIN SINCE THE MIDDLE OF JANUARY. OBVIOUSLY A TREMENDOUS AMOUNT OF INVESTOR INTEREST. THE FINANCIAL ADVISERS I TALK TO SUGGEST 1, 2, 3, 4% TYPE ALLOCATION. YOU'RE CLEARLY NOT BUILDING YOUR PORTFOLIO AROUND THAT. I'M HEARING FOLKS LOOKING FOR INFLATION-TARGETED ASSET ALLOCATION UNIT. TICKER PTI, THAT DOES WHAT YOU'D GET IF YOU ASK A BUNCH OF ADVISERS WHAT TO DO ABOUT INFLATION. YOU GET DEFENSIVE EQUITY, ENERGY, INDUSTRIALS, MATERIALS. A LITTLE TIPS. RIGHT NOW PLAYING ON THE SHORT END OF THE TIPS CURVE. YOU GET A LITTLE COMMODITIES, THEY'RE MOSTLY FOCUSED IN GOLD. YEAR-TO-DATE IT'S BEATING S&P 500, BEATING GOLD ITSELF, BEATING MOST BOND PORTFOLIOS. IT HAS BEEN WORKING. THOSE WHAT I WOULD CALL POINT SOLUTIONS FOR INFLATION HAVE COME TO THE FORE. >> CERTAINLY. WHEN WE THINK ABOUT THE BROAD COMMODITIES AS WELL, THAT CONSIDERATION FOR MANY PEOPLE WHO LOOKED AT GOLD, LOOKED AT SOME OF THE OTHER PRECIOUS METALS AND THINK EVEN WITH THE FED'S POLICY PATHWAY, HOW IT CAN AFFECT THOSE HOLDING GOLD AT THIS POINT IN TIME. >> IT'S WORTH POINTING OUT THAT WE HAVE GOLD AND OIL SITTING VERY HIGH RIGHT NOW. IT'S A DIFFICULT TIME TO MAKE THE CASE THAT NOW IS THE TIME YOU SHOULD BE PILING INTO THESE DIVERSE FIRES AS THEY RATCHET UP ALL-TIME HIGHS. I LIKE A BROAD APPROACH THAT DOESN'T GIVE YOU ANY FUNKY TAX TREATMENT THAT DAT THE END OF TE YEAR, SOMETHING THAT GIVES BROAD EXPOSURE. IT'S DONE REASONABLY WELL IN THE COMMODITY SPACE. YOU SHOULD BE EXPECTING THOSE TO BE COUNTERCORRELATED. IF THE S&P 500 IS GOING TO CONTINUES ITS LARGELY DRIVEN RUN WHICH I THINK WE'LL SEE, YOU'RE NOT GOING TO EXPECT BOTH OF THOSE TO BOTH GO UP STATEMENT. SHOULD WE SEE A SUSTAINED PULLBACK IN EQUITIES, THAT'S WHEN YOU'D EXPECT YOUR GOLD, COMMODITIES POSITION OR EVEN BITCOIN TO BE WORKING FOR YOU. >> ROSS, YOU WERE TALKING ABOUT BITCOIN AND THE EXPOSURE THERE, HOW SOME PEOPLE COULD STILL BENEFIT WITH THAT. >> YEAH. AT THE END OF THE DAY, OBVIOUSLY LATER THIS YEAR -- WELL, PRETTY SOON BITCOIN HALVING. I THINK OTHER ASPECTS ALSO LOOK AT -- MAYBE OTHER DEFENSIVE SECTORS, HEALTH CARE, ET CETERA. IN THAT PPI, IS THERE ANY EXPOSURE TO ANY OF THOSE SECTORS? >> IT'S REALLY QUITE FOCUSED ON THOSE DEFENSIVE SECTORS THAT ARE MORE TRADITIONAL IN TERMS OF ENERGY, MATERIALS, INDUSTRIALS. IT'S HANDPICKED. THIS IS AN ACTIVELY MANAGED FUND. IT'S GOT 35 STOCKS IN IT AND USE AS ETFs TO GET THE BROAD COMMODITIES EXPOSURE, THE GOLD EXPOSURE. IT'S AN INTERESTING POINT. WE SEE A LOT OF PEOPLE TRYING TO POSITION AROUND EQUITIES. REMEMBER MOST EQUITIES TRADE ON SENTIMENT AND FLOW FAR MORE THAN FUNDAMENTALS. IF EVERYBODY THINKS THEY'LL GO UP, YOU'LL SEE THEM MOVE LONG BEFORE THE ACTUAL INFLATION IS BENEFITING HISTORICALLY WHAT WE WOULD EXPECT THE GOOD CASH FLOW, THE PRICING POWER, THE INELASTICITY OF DEMAND. >> IT'S INTERESTING. I THINK A LOT OF US WERE THROWN FOR A LOOP IN OUR PLANNING MEETING, TALKING ABOUT TIPS DAVE WILL BRING FORWARD. IT'S TIPS, TREASURY INFLATION PROTECTED SECURITIES. WHY? >> TO BREAK EVEN ON TIPS, YOU GET PAID THE INFLATION UPTICK, ABOUT 2.4, 2.5%. I HAVEN'T LOOKED IN THE LAST HOUR. THAT'S PRETTY GOOD RIGHT NOW. WE'RE SEEING INFLATION PRINT HIGHER THAN THAT. THAT MEANS TIPS LOOK A LITTLE LIKE A BUY. THE CHALLENGE IS HOW ARE RATE CUTS GOING TO IMPACT THAT. YOU DURATION POSITIONING IN TIPS, DO YOU WANT TO BE SHORT, TEN YEARS OUT, I THINK IT WILL HAVE FAR MORE SHORT-TERM IMPACT. >> DAVE AND ROSS, THANK YOU. >>> COMING UP, WE SPEAK WITH WHITE HOUSE SENIOR ADVISER JEAN SPERLING ABOUT THE HOTTER THAN INFL EXPECTED INFLATION PRINT AND WHAT IT MEANS FOR THE BIDEN ADMINISTRATION. THAT'S NEXT. >>> READING MORE INTO THE LATEST INFLATION NUMBERS, ONE NUMBER THAT IS REALLY STICKING OUT IS AUTO INSURANCE PRICES, RISING 22.2% OVER THE LAST 12 MONTHS WITH ABOUT 90% OF HOUSEHOLDS OWNING A CAR, THIS DATA COULD PROVIDE INSIGHT INTO AMERICA'S ANXIETIES ABOUT INFLATION PRICES. PRAS SUBRAMANIAN JOINS US WITH MORE. WHAT STUCK OUT IN THIS REPORT? >> YOU HIT THE NAIL ON THE HEAD WITH THAT BIG HEADLINE NUMBER, 22.7% JUMP YEAR-OVER-YEAR AND THE BIGGEST COMPONENT OF THE INFLATION METRICS THAT ROSE THAT'S THE BIGGEST JUMP WE'VE SEEN SINCE DEESE 1976 WHICH WAS -- BY THE WAY, LAST MONTH WAS THE BIGGEST JUMP AND THIS MONTH IS EVEN BIGGER. THAT'S A LOT GOING ON FROM AN INSURANCE POINT OF VIEW. A NUMBER OF REASONS WHY WE DUG INTO THIS, THERE'S A WHOLE KIND OF -- A MIXTURE OF THINGS. FOR INSTANCE, THE SEVERITY OF AUTO ACCIDENTS IS RISING. GEOGRAPHIC LOCATIONS BECAUSE OF THE FACT THAT CERTAIN WEATHER PATTERNS ARE MORE SEVERE IN THE SOUTHEAST AND THINGS LIKE THAT. STATE-BY-STATE, A NUMBER OF THINGS. ALSO, BRAD, NOTE THAT INSURANCE IS A REGULATED INDUSTRY. SO YOU HAVE TO HAVE INSURANCE IN BASICALLY EVERY STATE. THAT MEANS IF YOU'RE FORCING PEOPLE TO GET INSURANCE, INSURERS, IF THEY KEEP RAISING RATES, THE MAGNITUDE CAN BE MUCH HIGHER THAN OTHER THINGS BECAUSE OF THE FACT THAT YOU HAVE TO HAVE IT. A NUMBER OF THINGS GOING ON AS TO WHY THESE RATES ARE SOARING. >> PRAS, WHEN WE THINK ABOUT HOW LONG PEOPLE CAN WEATHER SOME OF THESE HEIGHTENED PRICES, ESPECIALLY ON INSURANCE AND WHERE THEY'RE PAYING UP IN THE TRAVEL EXPERIENCE, WHAT ARE WE HEARING MORE BROADLY? IS IT CLEAR YET? >> IS WHAT CLEAR EXACTLY? >> IS IT CLEAR HOW LONG PEOPLE CAN ULTIMATELY HANDLE SOME OF THE HIGHER PRICES THAT WE'RE SEEING, ESPECIALLY IN THE INSURANCE REALM AS WELL? >> I THINK PEOPLE ARE NEARING THEIR LIMIT HERE WITH THE INSURANCE HIKES BECAUSE OF THE FACT THAT -- WHAT IS IT? 90% OF PEOPLE ACTUALLY OWN CARS. IF 90% OF THE PEOPLE IN THIS COUNTRY ARE PAYING 20% MORE FOR AUTO INSURANCE, WHICH IS A PRETTY BIG COMPONENT OF THEIR PERSONAL EXPENDITURES, THAT'S A PROBLEM. I WAS THINKING THERE MIGHT BE MORE INVESTIGATIONS FROM STATES ATTORNEYS GENERAL, SECRETARIES OF STATE TO LOOK INTO WHY THE RATES ARE CLIMBING SO HIGH RELATIVE TO INFLATION. IT'S STILL RISING, BUT NOT RISING 20% YEAR-OVER-YEAR. >> PRAS, THANKS SO MUCH. REALLY DO APPRECIATE IT, DIVING INTO A VERY IMPORTANT ELEMENT OF THE CONSUMER PRICE INDEX WITH US TODAY. YAHOO! FINANCE'S OWN PRAS SUBRAMANIAN. >> THANKS, BRAD. >>> REVENGE TRAVEL CONTINUES TO GO STRONG. 27% OF AMERICANS WILLING TO TAKE ON DEBT JUST TO TRAVEL. THAT'S ACCORDING TO A BANK RATE SURVEY. I SPOKE TO DELTA AIR LINES CEO ED BASTIAN ABOUT THE DEMAND HE'S SEEING FOR TRAVEL. HERE IS WHAT HE HAD TO SAY. >> I ENTERED THE YEAR WITH A LITTLE BIT OF CAUTION ON THE TRANSATLANTIC. LAST YEAR'S TRANSATLANTIC, THE REVENGE TRAVEL WE ALL SAW, MANY PEOPLE GOING TO EUROPE ALMOST AT ANY PRICE. I THOUGHT IT MIGHT COOL DOWN JUST A TOUCH. IT HASN'T COOLED AT ALL. WE CONTINUE TO SEE THE STRENGTH OF THE TRANSATLANTIC DEMAND FOR THE SPRING AND SUMMER WHICH CONTINUES, WHICH IS GREAT. WE'RE FLYING HIGHER LEVEL CAPACITY THIS SUMMER THAN LAST. WE EXPECT OVERALL PRICING LEVELS ARE GOING TO REMAIN LARGELY THE SAME. >> JOINING US IS HALEY BURG, HOPPER'S LEAD ECONOMIST. I WANT TO START WITH YOUR REACTION TO WHAT YOU HEARD FROM THE DELTA AIR LINES CEO. >> WHAT WE'RE SEEING AT HOPPER IS VERY MUCH IN LINE WITH WHAT OUR FRIENDS ARE SEEING AT DELTA. DEMAND REMAINS STRONG, ESPECIALLY ON SOME OF THESE HIGHER-PRICED ROUTES, TRANSATLANTIC AND TRANSPACIFIC. CUSTOMERS ARE WILLING TO PAY A LITTLE BIT MORE. BUT WE'RE NOT SEEING PRICE INCREASES YEAR-OVER-YEAR WHICH IS FANTASTIC. IN FACT, TRANSATLANTIC ROUTES TO EUROPE ARE DOWN IN PRICE ABOUT 10% YEAR-OVER-YEAR. DOMESTIC AIRFARE IS DOWN ABOUT 3% YEAR-OVER-YEAR. SO ON THE WHOLE, FOR THOSE TRAVELERS, WHETHER THEY HAVE TO TAKE OUT DEBT IN ORDER TO TRAVEL OR NOT, THEY'RE SEEING BETTER PRICES. >> IT WAS PARTICULARLY INTERESTING WITHIN THE AIRLINE FARES INDEX WITHIN THE MARCH CONSUMER PRICE INDEX, IT ACTUALLY DECLINED .4%. AN INTERESTING STAT. ONE OF THE AREAS THAT WE DID SEE A DECLINE, HOW DO YOU THINK AMERICANS, PEOPLE WERE TRAVELING MORE BROADLY, ARE EVALUATING WHAT THAT SPEND LOOKS LIKE NOW VERSUS EVEN A YEAR AGO? >> WHAT WE HAVE HEARD FROM CONSUMERS NO MATTER WHO WE ASK, ANY AGE RANGE, IS THAT THEY'RE CONTINUING TO PRIORITIZE EXPENDITURE ON TRAVEL. AMONG YOUNGER GENERATIONS, GEN Z, MILLENNIAL, THAT PERCENT OF THEIR WALLET GOING TOWARDS TRAVEL IS EVEN INCREASING AS THEY TIGHTEN THEIR BELTS WITH HIGHER INTEREST RATES. THE YOUNGER GENERATIONS WHO HAVE PUSHED OFF MILESTONES LIKE BUYING HOMES, HAVING CHILDREN, THEY MIGHT BE PUSHING THOSE OFF EVEN MORE GIVEN INTEREST RATES AND FOCUSING ON TRAVEL EXPENDITURE. WE EXPECT THE DEMAND TO REMAIN STRONG AND CONTINUE AS THESE GENERATIONS AGE, BUILD WEALTH. THEY'RE GOING TO BE CONTINUING TO SPEND ON TRAVEL. >> HAYLEY, I'M NOT GOING TO LIE. I SEE PEOPLE POSTING THEIR TRIPS ON INSTAGRAM. DO I NEED TO ADD IT TO MY PINTEREST BOARD, SAVE IT TO MY OWN INSTAGRAM. YOU GET SOME TIPS AND KNOW HOW TO PLAN AND BOOK BETTER. WHAT IMPACT HAVE YOU SEEN FROM SOME OF THE DATA AT HOPPER INTO HOW SOCIAL MEDIA IS IMPACTING THE BROADER EXPERIENCED ECONOMY, ESPECIALLY THE TRAVEL COMPONENT? >> SOCIAL MEDIA HAS HAD A HUGE IMPACT ON HOW PEOPLE PLAN AND BOOK TRAVEL. A REPORT WE'RE PUTTING OUT IN A COUPLE WEEKS IS GOING TO REVEAL SOME OF THE DATA WE HAVE IN HOW GEN Z LOOKS AT TRAVEL. THEY USE MEDIA SUCH AS TIKTOK SEVEN TIMES MORE THAN OLDER GENERATIONS WHEN THEY'RE IN THE PLANNING PHASE. MOST OF THEM RESEARCH ON SOCIAL MEDIA BEFORE THEY BOOK A TRIP, WHETHER IT BE A HOTEL, A FLIGHT, EVEN A RENTAL CAR. SO SOCIAL MEDIA IS THE NEW BATTLEGROUND OF WHERE BRANDS ARE GOING TO BE ATTRACTING CONSUMERS WHO WANT TO BOOK THEIR TRAVEL. ON THE FLIP SIDE, SOCIAL MEDIA IS VERY CURATED, AND YOUNGER GENERATIONS ARE LOOKING FOR AUTHENTICITY. A LOT OF THESE OFF-THE-BEATEN-PATH DESTINATIONS THAT OFFER SOMETHING MORE UNIQUE, SOMETHING YOU MIGHT NOT HAVE SEEN ON INSTAGRAM ARE BECOMING INCREASINGLY POPULAR AS WELL. >> I WANT TO KNOW THE AVERAGE HEIGHT OF THE PEOPLE TRAVELING TO NICE, FRANCE FOR $880 DALLAS. HAYLEE BERG, THANKS FOR TAKING THE TIME. >> GREAT TO BE WITH YOU. >>> WE SPEAK WITH WHITE HOUSE SENIOR ADVISER GENE SPERLING ABOUT THE HOTTER-THAN-EXPECTED INFLATION PRINT AND WHAT IT MEANS FOR THE BIDEN ADMINISTRATION. THAT'S AFTER THE BREAK. >>> INFLATION REMAINING STICKY, RISING MORE THAN EXPECTED FOR THE THIRD MONTH IN A ROW. PRESIDENT BIDEN COMMENTING ON THE LATEST CPI PRINTS SAYING FIGHTING INFLATION REMAINS MY TOP ECONOMIC PRIORITY. HE CALLED OUT CORPORATIONS FOR THE POSSIBLE ROLE IN KEEPING PRICES HIGH. JOINING ME IS GENE SPERLING, WHITE HOUSE SENIOR ADVISER. I WANT TO KNOW HOW WITHIN THE WALLS OF THE WHITE HOUSE THIS REPORT, HOTTER-THAN-EXPECTED, IS BEING DISCUSSED AND WHAT IS BEING PUT IN PLACE TO ULTIMATELY CONTINUE TO COMBAT INFLATION. >> FIRST OF ALL, LARGER PICTURE AS WE'VE OFTEN DISCUSSED, WE'RE HAVING AN ENORMOUSLY RESILIENT ECONOMIC RECOVERY. WE'RE JUST A FEW DAYS AWAY FROM HAVING HAD A 300,000 JOB NUMBER OR AVERAGE OF 276,000 JOBS THAT NOBODY REALLY PROJECTED MONTHS AGO: WE'VE SEEN UNEMPLOYMENT STAY BELOW 4% FOR A HISTORIC PERIOD THAT WE HAVEN'T SEEN IN OVER 50 YEARS. BUT IT HAS ALWAYS BEEN THE CASE THAT OUR NUMBER ONE FOCUS IS ON OVERALL COST FOR WORKING FAMILIES. OF COURSE INFLATION HAS COME DOWN SIGNIFICANTLY FROM ITS HIGHS, BUT IT'S NOT GOOD ENOUGH FOR US. WE WOULD HAVE LIKED TO HAVE SEEN THIS NUMBER COME IN LOWER. THERE'S NO QUESTION ABOUT THAT. BUT THE WAY WE LOOK AT IT OVERALL IS WHAT IS THE STRAIN ON WORKING FAMILIES? WHAT CAN WE DO? WE'D OBVIOUSLY LIKE TO SEE PRICES COME DOWN MORE. OBVIOUSLY THE PCE THAT THE FED LOOKS WAS STRONGER THAN THIS. THE LAST REPORT HAD THAT AT 2.5% OVER THE PREVIOUS 12 YEARS -- 12 MONTHS AND CORE AT 2.8. WE WOULD HAVE LIKED TO SEE THIS MOVE IN THE DIRECTION. WE HAVE TO ASK OURSELVES WHAT CAN WE DO OVERALL FOR FAMILIES. YOUR SHOW HAS BEEN DISCUSSING EXACTLY THERE'S MIXES IN PRICES. AIRFARE PRICES ARE DOWN, USED CARS ARE DOWN. DAIRY WAS DOWN THIS MONTH. I THINK SOME OF THE UNHAPPINESS, WHICH IS VERY UNDERSTANDABLE FOR PEOPLE, IN PLACES LIKE DAIRY, MILK AND EGGS, PRICES ARE DOWN BUT STILL MUCH HIGHER THAN THEY'RE USED TO. THEY'RE FRUSTRATED BY THAT. >> THE OTHER FRUSTRATING PART IS ONE AREA WHERE A LOT OF PEOPLE ARE WONDERING WHAT LEVERS CAN BE PULLED EITHER BY THE WHITE HOUSE OR THE FED. THAT'S HOUSING AND THE STICKINESS IN SHELTER COSTS RIGHT NOW. >> RIGHT. WE ALL KNOW THAT LAGS AND THERE'S SOME DEBATE ABOUT OWNER-OCCUPIED RENT, HOW IMPORTANT THAT IS. THERE'S NO QUESTION THAT THIS IS INFLATION IN SOME OF THE SERVICE AREAS THAT WE'D LIKE TO SEE MOD MODERATE. AGAIN, YOU ASKED THE RIGHT QUESTION, WHAT CAN YOU DO ABOUT IT? THAT'S WHY IF YOU LOOK AT WHAT THE PRESIDENT TALKS ABOUT -- NOT JUST TALKS ABOUT, BUT DOES. STUDENT DEBT, THAT'S 30 MILLION AMERICANS WHO ARE GOING TO HAVE LOWER STUDENT DEBT. THAT'S MONEY THEY'RE SAVE ING. ONE THING WE ARE HAPPY TO SEE IS EVEN WITH INFLATION HIGHER THAN WE'D LIKE, YOU ARE SEEING REAL WAGES UP OVER THE LAST 12 MONTHS. PEOPLE SHOULD KNOW, FOR THE AVERAGE PERSON, THEIR RAISES ARE ENOUGH TO COVER INFLATION AND STILL HAVE A LITTLE EXTRA. BUT AGAIN, NOT GOOD ENOUGH. WHAT ARE THE AREAS? HOUSING PRICES. THE PRESIDENT CALLED FOR 2 MILLION MORE AFFORDABLE HOUSING PRICES, REDUCING PRICES. FOR DECADES PRESCRIPTION DRUG COST HAS BEEN A MAIN STRAIN ON FAM FAMILIES. STUDENT DEBT FOR YOUNGER PEOPLE AND PEOPLE 30, 40, WHO STILL HAVE THAT DEBT. THE JUNK FEES, THE AREA WHERE THE PRESIDENT LOOKS AT OVERDRAFT FEES OR LATE FEES FOR CREDIT CARDS, ALL OF THESE COME OUT OF YOUR POCKET IN ONE WAY OR THE OTHER. YOU'RE RIGHT. WE HAVE TO LOOK AT WHERE WE HAVE THE POLICY LEVERS AND MAKE SURE PEOPLE UNDERSTAND THAT THE PRESIDENT IS FIGHTING FOR LOWER COST AND THAT THERE IS A DRAMATIC CONTRAST IN THE LEGISLATIVE AGENDA, NOT JUST IN PRESCRIPTION DRUGS BUT IN CHILD CARE, IN AFFORDABLE HOUSING WHERE VIRTUALLY EVERYTHING WE'RE DOING IS ABOUT LOWERING COSTS. >> GENE, I HAVE TO HUSTLE TO MY FINISH. WE'RE GOING TO LOSE THE FEED IN A HOT SECOND. ONE OF THE HUGE THINGS WE HAVE TO THINK ABOUT, ENERGY. THIS IS A MASSIVE YEAR. MORE THAN HALF OF THE WORLD IS HEADING TO VOTING IN SOME FORM OR ANOTHER, ESPECIALLY HERE IN THE U.S. WHAT SHOULD THE AMERICAN PEOPLE BE THINKING ABOUT ENERGY COSTS ESPECIALLY WHEN IT RELATES TO WHERE THE CAMPAIGNS WILL STACK UP ON FOREIGN POLICY AND WHERE THAT CAN BE AN EXOGENOUS THREAT IN THE ENERGY EQUATION? >> ONE OF THE THINGS THE PRESIDENT HAS TRIED TO DO IS GIVE AMERICANS MORE CHOICES TO HAVE LOWER ENERGY COSTS THAT ARE NOT DEPENDENT ON EVERYTHING THAT HAPPENS FOREIGN POLICYWISE. WE WANT PEOPLE TO HAVE THE CHOICE BETWEEN A CAR FUELED BY GAS, A HYBRID OR AN ELECTRIC CAR. BUT FOR THOSE WHO CHOOSE ELECTRIC, WHAT THEY'RE ESSENTIALLY DOING IS SAYING THEIR DAILY GAS PRICES ARE NOT GOING TO BE DEPENDENT ON VAPOR RUSSIA OR ALL OF THE DIFFERENT MEASURES -- ALL THE DIFFERENT THINGS THAT CAN HAPPEN IN A VOLATILE WORLD MARKET. DESPITE WHAT SOME OF THE REPUBLICANS SAY, WE'RE NOT FORCING ANYONE TO CHOOSE. WE WANT THEM TO HAVE THE CHOICE OF AN AMERICAN-MADE CAR, AN AMERICAN UNION-MADE CAR THAT GIVES US THE OPTION TO TAKE INTO OUR OWN THE ABILITY TO HAVE CARS -- TO HAVE YOUR COSTS ON A DAY-BY-DAY LEVEL AND BE LESS DEPENDENT ON FOREIGN POLICY THINGS THAT CAN MOVE OIL AND GAS PRICES SO SIGNIFICANTLY. >> GENE, THANKS SO MUCH FOR HOPPING ON AND TAKING SOME TIME WITH US TODAY TO DIVE INTO THE MARCH CONSUMER PRICE INDEX REPORT. APPRECIATE IT. >> THANK YOU. THANKS FOR HAVING ME. >> THAT WAS GENE SPERLING, WHITE HOUSE SENIOR ADVISER. SO FAR THIS ELECTION SEASON POLL AFTER POLL HAS SHOWN THE PRESIDENTIAL RACE BETWEEN PRESIDENT BIDEN AND FORMER PRESIDENT TRUMP INCREDIBLY TIGHT. THE POLLING FOR REAL CLEAR POLITICS AVERAGING JUST SHOWING PRESIDENT TRUMP LEADING BY .6%. WHAT DOES THAT MEAN FOR YOUR PORTFOLIO? A NEW POLL FROM THE CERTIFIED FINANCIAL PLANNER BOARD SHOWS 83% OF CFP PROFESSIONAL CLIENTS EXPECT THE ELECTION CYCLE TO HAVE SOME IMPACT ON THEIR FINANCIAL DECISIONS. FOR MORE WE HAVE CFP BOARD CEO KEVIN KELLER HERE TO EXPLAIN A LITTLE MORE. THANKS FOR JOINING US IN STUDIO FRESH FROM WASHINGTON, D.C. YOU PROBABLY COULD HAVE SAT NEXT TO GENE AND HAD THAT CONVERSATION. >> ABSOLUTELY. TWO BLOCKS FROM MY OFFICE. GREAT TO BE WITH YOU ON A BREAKING NEWS DAY. >> ABSOLUTELY. ONE OF THE HUGE THINGS PEOPLE ARE TRYING TO THINK ABOUT IN AN ELECTION SEASON, IN AN ELECTION YEAR, HOW THEY SHOULD BE THINKING ABOUT THE POLLING WITH RELATION TO THEIR OWN FINANCIAL PLANNING AS WELL. >> HERE'S THE THING THAT THE RESEARCH SHOWED. LAST YEAR WAS BY ALL MEANS 3 MILLION NEW JOBS, THE ECONOMY WAS UP. YET CONSUMER SENTIMENT HAS BEEN LAGGING BEHIND, AND TODAY ISN'T GOING TO HELP THAT AT ALL. WHAT WAS REALLY INTERESTING IN THE RESEARCH THAT WE DID WAS THAT CLIENTS OF CFP PROFESSIONALS ARE OPTIMISTIC. FIVE OUT OF SIX ARE SAYING THEY'RE REALLY OPTIMISTIC ABOUT THE FUTURE AND ABOUT THE ECONOMY. I THINK WHAT THAT MEANS IS IF YOU'RE WORKING WITH A CFP PROFESSIONAL, YOU'RE PLANNING A LONG-TERM PLAN. YOU'RE PUTTING IN PLACE A PLAN FOR THE FUTURE, AND THAT PLAN IS GOING TO LOOK AT UPS AND DOWNS, IT'S GOING TO PLAN FOR VOLATILITY LIKE WE'RE HAVING. I THINK THAT'S ONE OF THE KEY TAKEAWAYS, IS THE CLIENTS OF CFP PROFESSIONALS ARE MORE CONFIDENT IN THEIR PLAN AND THEY UNDERSTAND THERE WILL BE VOLATILITY ALONG THE WAY. >> IT'S INTERESTING. YOU MENTIONED CONSUMER CONFIDENCE. THEIR ASSESSMENT AT LEAST IN THE MOST RECENT READING OF THE PRESENT SITUATION IMPROVED IN MARCH, BUT THEY ALSO BECAME MORE PESSIMISTIC ABOUT THE FUTURE. IT VARIES, OF COURSE, AS YOU GET INTO DIFFERENT GROUPS AND QUARTILES, BUT ALL THESE THINGS CONSIDERED, WHEN YOU ARE PLANNING FOR AND ARE IN AN ENVIRONMENT, TRYING TO FACTOR IN THE LIKELIHOOD OF A PER SEFD RECESSION, HOW DO YOU LOOK PAST A RECESSION AND THROUGH TO THE MAJOR GOALS YOU'VE SET UP AS WELL? >> THAT'S PART OF WHAT A CERTIFIED FINANCIAL PLANNER WILL O DO WHEN YOU'RE WORKING WITH ONE IS PUT IN PLACE A LONG-TERM PLAN AND THEN REVISIT THAT PLAN ALONG THE WAY. AS ROSS SAID EARLIER ON THE SHOW, HE WAS TALKING ABOUT HIS AUNTIE, AM I GOING TO BE OKAY? HE WAS LIKE, YES, YOU ARE. WORKING WITH AN ADVISER WHO IS TAKING A LOOK AT YOUR WHOLE LIFE, THE HOLISTIC VIEW OF A PERSON'S FINANCIAL LIFE I THINK PREPARES YOU FOR THE VOLATILITY AND ALLOWS YOU TO MAKE ADJUSTMENTS ALONG THE WAY. >> WE'RE TAKING A LOOK AT SOME OF THE SURVEY KEY TAKEAWAYS HERE AS WELL. ONE OF THE THINGS THAT I DID SPOT WITHIN THIS WAS THE REMAINING THAT A LOT OF YOUR CLIENTS REMAIN OPTIMISTIC DESPITE THIS ONGOING ECONOMIC UNCERTAINTY. LET'S BRING IT FULL CIRCLE TO WHAT YOU MENTIONED AT THE TOP, TODAY'S ECONOMIC DATA AND HOW THAT CAN BE A JOLT OF UNCERTAINTY. WHAT THEN DO YOU TELL CLIENTS EVEN AMID THOSE TIMES? >> LOOK, WE KNOW THIS WAS A SURVEY OF CFP PROFESSIONALS. THEY HAVE CLIENTS WHO ARE DEMOCRATS, CLIENTS WHO ARE REPUBLICANS. SO THE BIG TAKEAWAY IS STAY FOCUSED ON THE FUTURE, MAKE ADJUSTMENTS AS YOU GO ALONG. DON'T MAKE SHORT-TERM CHANGES LIKE ROSS' AUNTIE WAS TALKING ABOUT. DON'T MAKE SHORT-TERM CHANGES BECAUSE OF THE NEWS OF THE DAY. KEEP FOCUSED ON THE LONG RUN. >> KEVIN, THANK YOU FOR TAKING TIME TO BE IN STUDIO, CFP BOARD CEO. THANK YOU SO MUCH. >>> COMING UP, INFLATION IS TOP OF MIND FOR EVERYONE TODAY. WE HAVE A CONVERSATION ON HOW YOU STILL THINK ABOUT SAVING EVEN WHEN PRICES ARE LIKELY TO REMAIN HIGHER FOR LONGER. THAT'S AFTER THE BREAK. >>> INFLATION STILL PRESENT, AROUND NFOR A WHILE YET. AT LEAST THAT'S WHAT THE LATEST INFLATION DATA IS SIGNALING. SHELTER PRICES RISING, OVER 5% YEAR-OVER-YEAR. ENERGY AND FOOD PRICES BOTH UP 2%. THERE ARE A FEW WAYS TO CUT DOWN ON SPENDING THAT WON'T COMPLETELY DISRUPT YOUR LIFESTYLE. LET'S BRING IN LYNETTE CAL FANNY COX, THE MONEY COACH FOUNDER AND CEO. THANK YOU FOR TAKING THE TIME HERE. AFTER A REPORT LIKE THIS, EVERYONE WANTS THE TIPS ON WHERE SAVINGS CAN TURN INTO EARNINGS HERE. WHERE IS THE NUMBER ONE SPOT THEY CAN START? >> ONE OF THE THINGS I ALWAYS TELL PEOPLE TO DO IS FOCUS ON A STRATEGY THAT I CALL SWITCH AND SAVE. SO THIS IS REALLY ALL ABOUT DOING SOMETHING SMARTER WITH YOUR MONEY, THE STUFF YOU'RE ALREADY SPENDING ON, AND MAKING WISER CHOICES TO GET A CHEAPER ALTERNATIVE. FRANKLY, A LOT OF EXPERTS SAY STOP DOING THIS OR SCRIM AND SAVE AND SACRIFICE. THAT JUST DOESN'T CUT IT FOR A LOT OF PEOPLE. SO THERE'S MANY CATEGORIES WHERE YOU CAN USE THIS SWITCH AND SAVE METHODOLOGY. SO, IF YOU HAVE, FOR EXAMPLE, A SMART PHONE AND YOU'RE ABOUT TO SPEND $1,000 OR SO ON THAT SMART PHONE, MAYBE YOU THINK ABOUT GOING FROM A REGULAR POST PAID PHONE TO A PREPAID PHONE, RESOURCE OUT THERE, STRAIGHT TALK WIRELESS HAS AFFORDABLE PLANS AND PHONES THAT ARE CHEAP FOR YOU TO GET. IF YOU HAVE A CREDIT CARD AND YOU'RE PAYING 20% OR SO IN INTEREST, YOU SHOULD SWITCH THERE TO ONE OF THOSE 0% TEASER RATE CARDS. YOU'LL SAVE ABOUT 2,000 BUCKS FOR THE YEAR. ANOTHER RESOURCE, CARD RATINGS CAN SHOW YOU SOME GOOD DEALS BASED ON YOUR CREDIT. THEN THERE'S THE GROCERIES THAT EVERYBODY IS WORRIED ABOUT AS WELL. ONE EASY SWITCH THERE IS TO SHOP THE PERIMETER WHEN YOU'RE AT THE GROCERY STORE. THIS STRATEGY REALLY JUST IS ABOUT STOP BUYING ALL THE PACKAGED, PROCESSED, KIND OF CONVENIENT FOODS. THE STUFF THAT'S FRANKLY NOT AS HEALTHY FOR US ANYWAY. AND THINK ABOUT THE FRUITS, VEGETABLES, THE WHOLE GRAINS. THE REAL STUFF. THAT WILL SAVE THE AVERAGE FAMILY ABOUT $1500 OVER THE COURSE OF THE YEAR. THOSE ARE IDEA FOR THOUGHT STARTERS. >> LYNETTE, I'M GOING TO BE SUPER PERSONAL HERE FOR A SECOND. I HAVE A PROBLEM WITH JUST UBER EATS, CAVIAR, DOORDASH, ALL THE DELIVERY SERVICES HERE. PERSONALLY, HOW CAN I MAKE SURE I'M REJIGGERING SOME OF MY SPENDING HABITS AND ENSURING I'M APPLYING MORE SAVINGS TO MY OWN SPEND PROFILE. >> FIRST OF ALL, YOU'RE NOT THE ONLY ONE. >> THANK GOODNESS. >> I TELL PEOPLE THIS ALL THE TIME. A COUPLE OF BUDGET TRIXIE FOUND OVER MY TWO DECADES-PLUS AS A MONEY COACH THAT WORK REALLY WELL WITH PEOPLE. ONE IS TO FACTOR IN -- WHAT I CALL A FUN FUND INTO THE BUDGET. THAT FUN FUND MEANS YOU'RE GOING TO ALLOCATE MONEY TOWARDS THE THINGS THAT GIVE YOU VALUE, THE THINGS THAT RESONATE WITH YOU. IF YOU ACTUALLY DO WANT TO GO OUT AND EAT, NO, I'M NOT ONE OF THOSE PEOPLE WHO IS GOING TO SAY NEVER GO TO A RESTAURANT, YOU CAN'T HAVE A LATTE, DON'T ENJOY A GREAT BRUNCH. JUST FACTOR THAT INTO THE BUDGET. THEN, OF COURSE, YOU HAVE TO OBEY WHAT I CALL RULE NUMBER ONE OF BUDGETING WHICH IS YOU JUST CAN'T SPEND MORE THAN YOU EARN. SOMETIMES PEOPLE GO, WELL, DUH, OF COURSE NOT. IT'S LIKE, DUH, BUT YOU'RE NOT DOING THAT, BECAUSE 70% OF AMERICANS ARE IN DEBT. THEY'RE OWING, BUY NOW PAY LETTER, CREDIT CAR DEBT, STUDENT LOANS, WE'RE UP TO OUR EYEBALLS IN DEBT. THINK ABOUT BUDGETING IN A WAY THAT'S REALISTIC AND SUSTAINABLE AND YOU WON'T FALL VICTIM TO WHAT I CALL FRUGAL FATIGUE WHERE YOU'VE BEEN ON LOCKDOWN SO MUCH AND HAVEN'T BEEN SPENDING, AND THEN YOU FEEL THE URGE THAT TO SPLUNG. >> LYNETTE CAL FANNY COX, MONEY COACH FOUNDER. WE'RE RUNNING UP AGAINST THE SHOT CLOCK ON TODAY'S SHOW. WE'RE SHOOTING OUR SHOT ON GETTING PEOPLE SOME TIPS TO SAVE OUT THERE. YOU HELPED WITH THE CAUSE. THANKS, LYNETTE. >> EVERYONE, THAT'S IT FOR US TODAY. I'M BRIAN AD SMITH. THANKS FOR JOINING US. MUCH MORE ON "WEALTH" TOMORROW.
