Skip to main content

tv   The Exchange  CNBC  April 22, 2021 1:00pm-2:00pm EDT

1:00 pm
>> okay. all right. >>+most of their pus has been shut down in europe. >> he will we will make that your final trade for time's sake josh, then court, thenar issate, give us a name >> i forgot what i was going to say. i'm sorry. >> thank you very much >> score capital i'm sorry. it threw me off with one word. new 52-week high. >> you know what we have got to go. that does it for us. kell, what can i say enough said. the exchange begins now. >> thank you very much scott hi, everybody. i'm kelly evans. here's what's ahead on the exchange today intel is set to report earnings. can the battleground name and key u.s. supplier justify its recent rally with new ceo ambitious turnaround plan and more competition than other. plus, one hot burrito.
1:01 pm
chipotle reports a jump in sales. the ceo joins us to talk spending trends jobs and inflation pressures. plus, an ev call an under the radar stay-at-home stock. we begin with today's market dom chu. >> i keep thinking about hot burritos you got me hungry. looking forward to the chipotle interview. i want to call your attention to the fact that the markets are well off their lows. at the lows the dow was down 182 points the s&p 500 up .1% 4,180 the last trade on the nasdaq up.5%. the outperformer of the three indexes. one hot burrito is the transportation market. the iyt up .5% up 89% over last year. it gets a gold star. it hit a record intraday high in
1:02 pm
trading today driven by strength in airline stocks. equifax. a name we don't often talk about, single handedly the biggest gainer in the s&p 500 today. up about 17 points the consumer data provider that's maybe best known for credit scores, also computer services for companies and enterprise companies we are four years almost removed from the data breach, remember that, kelly, equifax in 2015 sow now the shares are trading higher today >> if you went back and looked at what was the major headline a year ago equifax, that story dominated for months now it is almost four years ago. >> 2017. >> intel results are due after the bell today it has been a wild year for the chip maker manufacturing delays, stiff competition and the chip shortage are all weighing on
1:03 pm
performance. but an ambitious man from the new ceo is giving hope to the street my next guest says the stock will outperform and has an $80 price target matt, thank you for joining us welcome. >> thanks for having me on. >> intel is a major story for the u.s. a major manufacturer it has the opportunity to be in the middle of the american supply chain if it can pull it off. do you think it can hit $80 in the near term? >> our $80 target is a year out, as is typical. step one in the turnaround was technically focused leadership step two, get the 7 nanometer process right. step three, get the progress right. we have seen progress right. competition is tough from amd, from nvidia, apple, going to its
1:04 pm
own silicone for many of its mac products we felt like the stock was being priced as a perpetual share loser. at 550% discoupe and with potential government investment, we couldn't pass it up. >> you get this story yesterday, nvidia hitting intel where it hurts with a data center cpu how is intel going to be able to fends off competition while at the same time relaunching the way it does business and trying to attract new business from people under this new model in it seems like they are trying to did a lot of things at once. >> they certainly are. as you say the folks that invested in the competition, amd, nvidia, those investors have been handsomely rewarded. we have been big sporters of
1:05 pm
those companies in our stock ratings. but turning and looking at what assets intel does have, they are the largest manufacturer of chips in the u.s. by a huge margin u u.s. competitiveness vis-a-vis china over the next decade is significantly dependant on computing leadership, domestic chip supply. i think there are more opportunities here as intel use its breadth and department to keep their server share higher than folks think no question in the next two years share losses are going to happen the new products that pat is proposing essentially will be lawsed in 2023 custom is long time in semiconductors but i think the government support will be significant as will be the assets that intel brings not market. >> there are signals for risk on and risk off
1:06 pm
what is the language at intel that tells you this is a risk on stock? what's the language that could say to you you know, it is going to take longer than i thought? >> i think it is an interesting one. this particular setting earnings we preannounced upside to the first quarter results. they gave us full-ier revenue and eps guidance a lot of the cards have already been played with respect to near term and long term strategy. what we care about is progress on the seven nanometer road map, the potential for funding on capex and r&d dollars and a plan to support customers to bridge the kbap from where the product line is now to where it will be in 2023. it is less sequential numbers tonight it is more about continuing the conversation analyst started with their team months ago. >> for everybody, businesses to
1:07 pm
consumers, what is the latest on the chip shortage. and how realistically do you think it will be resolved? there are a lot of driving factors here what is the latest you are hearing in the industry. >> the chip shortage is real they are across up and down the stack from the highest ends data center chips to those that go into the automotive industry industrial industries. we feel like in our work that by the second half of the year you will see significant raised capex on semiconductor new investment plants from samsung, new investment plans from intel that will be the industrial markets in the back half of this year. in automotive where the margins aren't as high it could take into 2022 and we have heard industry folks talking about longer than that before supply meets demand
1:08 pm
it is a severe problem it is not just on waivers. it is on testing, substrates, manufacturing. there are a lot of industries that cut back during the peak the covid pandemic and it is going to take time. >> going to be the story of the year maybe it gets worse before it gets better. like you hinted at matt ramsey of cowen joining me. don't miss intel's ceo tonight on "mad money" at 6:00 p.m. eastern. senate republicans unveiling their counter-offer to president biden's $2 trillion infrastructure plan today. it has a smaller price tag it's less than $600 billion. it does still focus on capital improvements to transit systems, roads, and technology. if some version of these proposals is ultimately passed, who stands to gain the most? how can investors benefit? kevin ma joins us. it is a great opportunity to talk about how to separate the signal and the noise what is likely to get passed
1:09 pm
who stands to benefit in and where? >> now we have seen the demo republicans counter-proposal to the democrats infrastructure plan the democrats plan calls for over $2 trillion in infrastructure-related spending whereas the republican's plan calls for roughly $568 billion but it's the scope of the spending and the similarities in the scope of the spending that we believe creates investment opportunity. specifically, as it relates to upgrading and repairs to our nation's roads, bridges, highways changes to our electrical grid expansion of our broadband access all of that creates potential opportunities for certain sectors of the stock market. those being industrials, materials, energy, utilities, and even communication services. >> well, kevin, even as we are speaking there is a headline hitting the wires and hitting the market right now the dow is at session lows, down about 170 points
1:10 pm
president biden apparently is going to propose a capital gains tax as high as 43.4% for the wealthy. tell me about that, the market reaction and what is likely to happen here. >> that's the other side of the potential investment equation that sits off of this infrastructure spending bill as we know, the majority of our infrastructure projects in our country are financed by municipal bonds. it appears as though with this particular infrastructure spending bill, that an increase in taxes may come along with it as well. whether that be corporate taxes or even individual taxes given that, kelly, the demands for tax-free income that's associated with municipal bonds should continue to increase. as that demand increases that should pus prices high sphere ironically you independence could of drool at these prospects. i wonder, we will talk about whether these proposal help or hinder the u.s. economy. you want an efficient economy to
1:11 pm
maximize returns on municipals on municipal debt, right here's a few more headlines from this california's total capital gain levy approaching 56.7% what is that going to do to investment >> obviously, that's going to cripple investment and we have to counter-balance the need to put america back to work again, the need the repair our infrastructure and our country, with the need to also grow our economy at the heart of an infrastructure spending bill is putting america back work again. we have made tremendous strides since the beginning stages of the pandemic when unemployment rose to 14.7%. right now kelly it is around 6%. perhaps with the passage of some form of an infrastructure spending bill we will get that unemployment rate down to 4.5% at the ends of this year but that can't be done at the detriment of economic growth we have to counter-balance the need to put america back to work again with not taxing too high. >> we are showing the dow down
1:12 pm
250 points right now the ten-year 176%. the yield there is sliding i guess now we have this interesting push and pull where the way they are going to pay for it might highlight the need to scale back some of the plans. perhaps. again, it depends ultimately on what constituents' appetite is if something more pared down passes and it is more than $1 trillion in the case of the infrastructure bill, where do you see that shaping up. where were you recommend >> republicans and democrats agree on expanding broadband access throughout the country. that creates a lot of potential opportunities in communication services we just came out with our tax advanced growth and income trust. couple of the names we like in that area include verizon and at&t
1:13 pm
then you look at some of the traditional infrastructure stocks, martin marietta or caterpillar. they are going to be a large benefactor of whatever the infrastructure spending bill ultimately comes. >> maybe some of that is already priced in. maybe we have to wait and see how much of this really does pass as the details become pattern kevin thanks to you. we will leave it there appreciate it. coming up, we will have more on what the president is announcing, and what it means for the economy. plus, chipotle's orders are surging 130% the ceo brian niccol will talk to us about digital delivery one plan, two outcomes new studies on the president's jobs plan are at odds over the end result, whether it would be more jobs or less. we will debate, with the margaret down approximately 250 points stay with us
1:14 pm
>> announcer: this is "the exchange" on cnbc. at calvert we know responsible investing is hard. if you're concerned about the environment and climate change, how do you find companies that are driving the right outcomes? if you care about economic equality and social justice, which firms are addressing it in their workplaces and their communities? for nearly 40 years, calvert has delivered competitive returns by investing in companies making a difference because we see value in doing good.
1:15 pm
for more information, visit
1:16 pm
welcome back if you didn't see it chipotle ace first quarter earnings beat wall street expectations handily as the company's online sales overtook in-person orders for the first time the reopening of dining rooms was also a big boost for sales
1:17 pm
kate rogers joins us now. >> adjusted oopsz coming in at 536 a share, 10% above analyst estimates. revenue in line at $1.74 billion. same store sales climbing 7.2% the company pointing to marketing, new menu items and government stimulus for the boost this quarter digital sales of course always a key metric for the company up 134% year over year to 50.1% of sales. the company also hanging on to those digital customers even as its dining rooms reopen. chipotle also adding 26 new chipotlanes driving sales. joining us brian nicholls, chipotle's ceo congrats on the quarter. >> thanks, kate. it is great to hear all of these numbers. >> let's talk about digital sales. you noted you are hanging on to the digital customers.
1:18 pm
you are also seeing digital sales right before their covid peak that's amazing because dining rooms are opening and customers are coming back through that channel. as ceo what is the preferred mix between digital sales and in-person sales moving ahead >> we want to provide access both ways. obviously, the digital transaction where you order ahead and pick up, whether it is in the which i boat lane or in our restaurant is our most profitable transaction but, look, we have a great economic model, whether it is an in-dining room experience or digital experience we are diffindifferent. we want to commit ourselves to great food, a great experience and fast we have capacity coming out of the kitchen to service both of these occasions for chipotle, you are seeing the power of it in our results. >> i know the case dia is something you said over the years people had been asking for.
1:19 pm
launching it has been a success. you had a record amount of new customers in march come to the brand trying that out. are you retaining them how does this process inform new menu additions moving ahead? >> we are really excited about the launch of the case dia we are a couple weeks in as you mentioned we saw our highest level of new users to the chipotle business. the case dia has dhifrd on all expectations it is giving a great customer experience the number one requested product. our teams are doing an outstanding job on the digital side of it and our operators are saying, look, it makes the case dia operational, easier than it was before when people used to order it off menu. those folks that are ordering case dias, we are seeing them coming back. it has been early days but i am confident about the new entry in the chipotle mix. >> it is kelly, brine. thank you for joining us viewers are anticipating and
1:20 pm
waiting with baited breath for you to talk about the labor market can you talk about what is going on with wages, with finding workers? give us as much sense as you can of what challenges you are facing ow there right now? >> so i will speak to what we are seeing what we are seeing is, you know, our business -- i think businesses in general are going to find out really started to ramp up in march as the vaccine rates went up and obviously covid cases started to decline and then you layered in the stimulus checks. so the consumer, i think was ready to get out and have these social experiences so we have seen our business really accelerate. you know, now we are trying to play catch up a little bit with our hiring to match the acceleration in the business and it's a competitive market. what we are seeing is when we bring forward chipotle's purpose around cultivating a better world and food with integrity paired up with all the great
1:21 pm
benefits, wages, and growth opportunities, we get really good applicants to come into our business then what we focus on is how do we keep them in the business it's more of a challenge of making sure people know, hey, we are hiring in a meaningful way once we get that word out, we see really good applicant flow: then our biggest challenge is keeping them in the business beyond those first 30, 60, 90 days >> brian last question here just on technology. technology has become synonymous with chipotle. you are doing it really well the company revealed its investment in nearo the robotic delivery company how are you evaluating opportunities for investing both internally and externally in the technology space the continue to differentiate? >> i think you hit the nail on the head we are always looking for technology that gives a better employee experience or a better customer experience. we start with that lens. then we want to hold the
1:22 pm
technology to kind of a standard that either is improving efficiency or somehow or another makes us better at what we are trying to execute. so you have seen this with our digital make line business we are doing some thing on forecasting, supply chain management and we are seeing technology really play a role from the very first day we sign up a new employee, to train them, get them develops, all the way to how do we give more access to chipotle at a great value. we are really excited about the neuro investment but i still believe there is growth opportunity in our business we are going the use technology to enable that growth. >> brian, really quickly i want ask this as a follow-up you said you are not having trouble finding workers to start. you are having trouble keeping them past 30 and 60 days we have heard anecdotes where they are giving people bonuses if they stay on past 90 days why is it so hard to get people
1:23 pm
to stick around? >> what we are seeing is definitely a little bit more of this dynamic where people are job switching more aggressively. i think these one-time incentives that are popping up what we are focused on is trying to get people to understand, look, there are rewards in the short-term and there are also rewards by staying with our company you can come in as a crew member and tooind find yourself running a multimillion restaurant making $60,000 or $80,000 in a matter of two years but you have got to get through the first 90 days. it has become much more competitive in the first days to retain and develop your people. >> more on that next hour. kate and brian thank you both. chipotle's ceo with kate rogers. we will talk about this social stock that's up 240% in the past year. can it keep going post pandemic. plus the president's american jobs plan will it help or hurt the
1:24 pm
ecom we have a great debate lined up next.
1:25 pm
these days you have to keep everything moving and reinvent the wheel. with a hybrid, you can do both. that's why manufacturers are going hybrid with ibm. with watson on a hybrid cloud factories can use ai to automate the little things so they can focus on the next big thing. businesses that want to innovate at scale are going with a smarter hybrid cloud using the technology and expertise of ibm.
1:26 pm
with a bang, energy and change came to every part of our universe. seismic or small, it continues. change is all around us. shaped by technology and human ingenuity, we can make it work for you and your business. welcome back to the exchange we want to get you caught up on the markets which slid to session lows at the top of the hour on headlines. the biden administration is reportedly looking at possibly raising the cap gal gains tax up towards 40% in order to pay for the american families plan included in the build back better plan. we were down 216 at the moment
1:27 pm
we are working to confirm with the administration the details the ten-year yield also slid below 1.6%, which can be as you can see earlier in the session as something that was for possible, more bullish a change there mirroring the sentiment in the market. let's go to rahel solomon for our cnbc news update. >> ukrainian officials are welcoming russia's withdrawal of troops along its border with crimea they were part of what russia called military exercise that is greatly increased tensions between the neighboring countries. it inno calls it important and timely the house voted along party lines to make the district of columbia a state that said, the measure will almost certainly fail in the senate democrats need 60 votes and each some members of their own party aren't on board. tonight on the news with shepard smith the senate votes
1:28 pm
on a covid-19 hate crimes bill. the senate in massachusetts urging the national highway safety administration to improve driver advanced safety systems saying the crash of a tesla that killed two passengers is part of an emerging pattern. there is no evidence that their assistant pilot program played a role in the crash. heavy snow and cold temperatures made for dangerous driving. this is on interstate 41 in wisconsin. police say at least 80 vehicles were involved in crashes and they left one person dead. >> awful it has been a bizarre weather week thank you very much. >> sure has. coming up, too much competition. appliance reliance, wall marlt says domo ar gatto to mr. robert and a crazy summer
1:29 pm
it is all on rapid fire. stay with us
1:30 pm
when it comes to autism, finding the right words can be tough. finding understanding doesn't have to be. together, we can create a kinder, more inclusive world for the millions of people on the autism spectrum. go to
1:31 pm
welcome back let's catch you up on some stories that should be on your radar today. it is time for rapid fire.
1:32 pm
here to break down the headlines, bob pisani, cema mody and robert frank let's begin with moody's downgrading two ev companies fisker is dropped from sell to neutral, and lordstown now in neutral. they lowered the price targets to $10 a share they write, we believe the time the margaret and platform will take added pornz as it becomes competitive. they go on to say risker is moving too slowly and lordstown is driving an inferior product to market. they are only down 1%. >> goldman is late getting to the story about let's get real on electric vehicles they all have three or four things in common number one, none of them make money. number two, they have all had huge speck thattive run-ups going into med february. number three, they all got hit big when interest rates started
1:33 pm
moving up mid february and all of them were clobbered along with the speculative areas of the market, spaces and they are all 40 to 70% off of their 52-week highs as a result of all of this, the run up in the speculative fever and the run up in interest rates. we knew there was competition but everyone was in the grips of this crazy that the market was going to go up now let's go back to reality i think it is good and high time. >> excellent point from the market point of view, bob. that's why robert i wonder, from the car point of view, where are we on some of the emerging brands >> i love how bob says that goldman is late in saying that these companies are a little late to the market everyone is late on this the issue, as he pointed out is, you know, just in the past quarter you have wean vw, ford, you have seen gm really coming into the market. it is kind of the empire strike
1:34 pm
back moment in evs where all of the eo merkss are finally releasing evs everyone thought they would release years ago to catch up to tesla. product quality. lordstown, they stock was down 10% because they entered their endurance truck in this baja race and the truck basically stopped after 40 miles the range is supposed to be over 200 miles. but the truck stops after 40 that didn't give people reassurance about the endurance truck. so i think a lot of these companies that were good at raising money but not at building product and delivering it, you for example it's all coming home to roost. >> cema, final word? >> time line is key. excitement around electric vehicles is great. but we need to see products come to market. >> exactly it is all fun and games when you can talk about how great it is going to be. it is more difficult to engineer. appliances are doing well.
1:35 pm
working really well for whirlpool. the home appliance company delivered a blowout quarter just now with sales soaring 24%ier on year stock lower today, you can imagine it priced in a lot the ceo sass he thinks the work from home boone will continue. here's his optimism on "closing bell" yesterday. >> people have a stronger orientation to house and home. if you listen to all the companies auns thouing their work policies i would say many consumers will stay on average one or two more days at home that drives appliance consumption. literally, alliance consumption. that will not go away in any time soon. >> cema, that to me is what -- it all comes down to, are people still going to be home one or two days a week? i know people moved away from the city because they are betting their futures on it. i see guys running around the neighborhood on conference calls and think they are happier doing it this way than being stuck in the office we don't know for sure it must be hard for any ceo like
1:36 pm
whirlpool the try to make investment decisions around this. >> he was talking about this multi-year cycle unfolding in the housing market and how it is going to be a boone for appliance companies. they are implementing price increases. it is working in their pave because at the same time they kbemted cost cuts. you heard the ceo saying how the underlying factors of the housing boone will continue to help his company. >> they have priced in optimism. cema was talking about pricing pressures. but they are up 30% this year. >> that's right. whirlpool is emblematic of the problem with the stock market right now. how much better could you do with this earnings report? they beat by 50% they are able to raise prices. the ceo was talking about 5% to 10 trz price increases it may not impact their margins as a result of that and yet -- yet, look at it. the stock is up 30% this year,
1:37 pm
as you pointed out the market has anticipated that they were going to have this amazing number and this is the problem all the trading desks are having well, how much mar amazing are the numbers actually going to have to be for us to get the stock to move forward? the answer is, wow, more amazing than this? i mean that's hard to imagine overall. as you you point out 30% is a lot to move in just a few months no that was just this year after everything last year, up to 140% off the lows robert, this leads into this next question i was going to ask. what do you think is going on? are people you are talking to planning on being able to work from home a day or two, maybe in the hamptons for foreseeable future >> we had buy in jana new refrigerator and a new stove back in december they were saying it would take a week or two weeks. now they are saying neither will
1:38 pm
arrive until october october for a refrigerator and a stove ordered in january the reason this is not going to slow down any time soon is because of that pipeline of delayed orders and backlogs. it is six, eight, nine months. >> wow. >> that bag log. and then you have got people ordering now i think there is so much demand from the housing markets that that's going to continue through at least this year. >> i hear you. that brings us into our next story. there is a house representing in the hamptons this summer for $2 million. is that being driven by the reopening idea that we can all socialize again? is it the opposite, hey, if i need a place to bunker down, that's not a bad place to bunker down or is it because the housing market is hot everywhere >> it is hot everywhere. but the hamptons has a particular dynamic, a lot of wealthy families left the city they went to the hampones, either they had a home there and they rented. they didn't plan to stay that long then they bout or extended they have been out there a year.
1:39 pm
they enjoy it. there is an ecosystem around wealthy consumers out there, the restaurants, the galleries, the stores there is an entire big new rear round community in the hamptons that now wants to stay and maybe come back to the city one or two days a week. the problem there wasn't a lot of new building in the hamptons. inventory is down 4:1% prices are up 31%. there is house in the hamptons renting this summer as i wrote on for $2 million for the summer that's $20,000 a day >> wow. >> for the entire summer that speaks to how little supply there is. >> even a weekend, memorial day coming up. five bedroom in the hamptons, $3,000 a night i mean prices have skyrocketed it is not confined to just the hamptons americans are dying to get out this summer. weddings, vacation rentals owners feel like they have pricing power and they are
1:40 pm
continuing to demand more for their rentals. people saved last year and they are putting it to work this year there is a race under way to get the property you want this summer hotels, you are not seeing it reflect there had. >> from 338 to 550 the graphic on southampton pricing bob is crazy last word. >> just on the hamptons rental, if the stock market was down 20% this year instead of being up 10% as it is now, you would not see $2 million houses in the hamptons bear that in mind. just to the overall situation, you saw that, what cema just put up there, rental prices being twice that of the hotel prices -- that's amazing to me i mean at least with a hotel they change the sheets every day for crying out loud. look at this, a vacation rental you have got to change your own sheets i am sorry i am staying in a hotel. >> i want the roof top deck, the pool service, the margarita. i don't want the make my breakfast and lunch day. who are these people
1:41 pm
you are on vacation. >> sometimes the rentals are right there where you want to be. >> that's the thing approximate the hamptons there is the fear of missing out. everyone wants to be in the hamptons this summer as if there are no other etch beaches on east coast crazy. >> a gynthe manhattan market doing okay thank you all for rapid fire still ahead, claims for pandemic unemployment assistance up slightly over the past week but falling significantly over the last few months. with bide's american jobs plan will things keep getting better or could it cost jobs in the long run in we will debate it long run in we will debate it after this the rx crafted by lexus. get 0.9% apr financing on the 2021 rx 350 exzing at your lexus dealer.
1:42 pm
what happens when we welcome change? we can make emergency medicine possible at 40,000 feet. instead of burning our past for power, we can harness the energy of the tiny electron. we can create new ways to connect. rethinking how we communicate to be more inclusive than ever. with app, cloud and anywhere workspace solutions, vmware helps companies navigate change. faster. vmware. welcome change. man: "fender bender," take 1. tonight's matchup: me versus an ugly fender bender. if i can eke out a win, it's going to be a miracle, baby! uh, mr. vitale? it wouldn't be a miracle because geico gives you a team of experts to help manage your claim. it's going to be a nail-biter.
1:43 pm
no, the geico team is there for you 24/7. geico is awesome, baby! (shouting) too much? i think we got it. yeah. thanks. thank you. geico. great service without all the drama. welcome back to the exchange the number of people applying
1:44 pm
for unemployment benefits fell to a low last week the american jobs plan has some concerns with the economic recovery under way is it necessary to create jobs this way or could the plan hurt the economy that's our great debate. joining me president of the american action forum and the chief u.s. economist at oxford economics. steve liesman is here in the middle of it all for us. steve thank you for setting this up greg, let me go to you first if you just set up why you think this plan could boost jobs, boost the economy. lay that out for us first. >> i think what we are looking at, the biden stimulus actions so far they have been mostly cyclical right now we are looking at a plan that is aiming at the structural side of the u.s. economy. really lifting long term growth and long term potential. we don't think it is going to create the most jobs ever since worlds war two but there could be a potential 1 million jobs
1:45 pm
over the next year and a half that's created by this plan and maybe two million jobs over the next three years a net benefit. but perhaps importantly a boost to the economy's potential that's what we are looking for at this stage of the recovery. >> boosting the economy's potential is more than boosting gdp. it means we can do more gp on top of more gdp in the future. it start of multiplies but you are more skeptical on what the jobs plan would do why? what do you think would happen instead? >> i agree with greg that you want to look at the long run peay tension and this is not about the cyclical recovery. we took the candidate at his word and raised $3.3 trillion in taxes. we agreed that was bad news for the economy. then we plowed that $3.3 trillion exclusively into productive infrastructure and r&d, there are stacking the deck as much as possible. we put it into a model and the answer that comes out is over the next ten years the economy shrinks slightly as a
1:46 pm
result the bad news from the tax is not outwayed by the productivity of a much bigger infrastructure stock. it goes up by 16%. on net, that gives you less productivity, less growth in real wage asks that's bad news for the american worker. >> all right doug and greg, i'm happy to know both of you guys and be able to rely upon you. i need to have some kind of closure on this debate here. i can't -- we can't leave here with this kind of thing. and we do not -- i tell you, we do not want to have a deep debate about the differences in economic models because people will turn it off and go right to sleep. >> i would say -- >> let me start with one place i think where the differences are. greg, i will give you the first shot at this greg, the impact of raising corporate taxes. i think doug's model takes that as very, very negative you think it doesn't have that big of an effect make your case on that >> yeah. i think we are both in agreement that increased investments in the long term is good. and there is about over $2
1:47 pm
trillion of additional investment over the next eight years. so that has a fairly strong net positive effect in terms of economic activity, in terms of jobs the key question is how negative the increase in revenues becomes for the economy. when wehook at it, we look at it from a slightly different angle. when we look at the increase in the statutory corporate tax rate, the increase in the global tax, increase in inversions we think it will have an effect on economic activity but it will be manageable it would add to growth .8%age points in 2022 and drag a tenth or two from the up crease in corporate taxation if we look at it from that effect we think that that had a fairly positive effect on business investment but not as much as people were saying we didn't see as much economic activity increase. so it won't have as negative
1:48 pm
effect as others may be saying. >> doug, you think ceos pick up their toys and go home in that's what happens when you raise the corporate tax. >> i think the corporate tax has a strong negative impact, no question but i think there are two very important points to make number one is how you think approximate the baseline in our work, the american rescue plan does its job. we are back to full employment and we credit no cyclical improvement in employment to the american jobs plan that's a big difference i think in some of the results the second thing that's really important here is that, you know w the announcement of today for example, the higher capital gains tax rate, the fact we are going to have an american family plan whens that non-notice of spending, tax credits, paid family leave, thing like that. we are may migrating towards what we priced which was candidate biden's plan with a lot of tax increases, and a lot of spending that has no
1:49 pm
productivity impacts we are migrating toward our result. >> doug, let me ask you as we move forward given the counter proposal that would be under $00 billion in size what are the numbers where you think it could hurt the economy more than it hurts the economy? >> it is not a number thing. i think the mistake that the trump administration made. i think you should close the edital divide. fix roads and bridges and then figure out what that costs, finance as much of it as you can with user fees, the traditional way to finance infrastructure in the united states, more efficient. and as a back stop go to general revenue. that's the right way to go at this but that's not the plan at the moment. >>i wonder if i could bring both of you out of your comfort zone, which is numbers for both of you and talk about what are the added impact -- are we really measuring the impact of something -- for example, how do
1:50 pm
each of your analyses capture the idea if you think that carbon analysis is good thing. is that captured in your analysis in the idea of providing more child care or elderly care we could argue whether or not they are good things but does that first. >> i believe that reducing greenhouse gas emissions is a good idea and analysis doesn't have anything for that that's a benefit of the plan my observation would be that's not how they're selling it they're not saying, look, we might have to have slower economic growth with other benefits to accomplish make that case i'm happy to have that debate. they're saying, it is all win-win. have a clean environment and get jobs, too. that's not an honest sales job. >> greg? >> there are some potential jobs in investing in green energy if you look at some of the details of the plan there are
1:51 pm
tax credits for housing and green energy there is investment in the workforce which is important and to your point about child care is an important element knowing that people were negatively impacted because of child care issues so addressing the displacements of manufacturing workers because of globalization, addressing the shortfalls in the labor force and training it for the economy of tomorrow are all good investments that can create jobs, perhaps different jobs over the longer run and generally beneficial. >> i think about it sometimes to create jobs to create -- you know, everybody goes into the workforce and now you need child care and everybody -- sometimes feels like layers on top of layers but the question earlier is right which is is this really about economic growth goals or political goals ab maybe i
1:52 pm
suspect they can't answer that but we could this is to point us in a direction maybe on where that is heading. we'll leave it there this was enjoyable hope to do it again. >> thank you. coming up, snap is a social media winner in the pandemic yothr sus g u eirelt right after this
1:53 pm
did you know that petco, is now a health and wellness company? their groomers work wonders for my confidence. i trust their vets, and i'm known to have trust issues. they deliver high quality food the same day. i was outside digging, what'd i miss? just everything regarding our physical, social, and mental health. exciting. i'm gonna take a spin around the room. great idea. ♪ ♪ petco. the health and wellness company.
1:54 pm
it's moving day. and while her friends are doing the heavy lifting, jess is busy moving her xfinity internet and tv services. it only takes about a minute. wait, a minute? but what have you been doing for the last two hours? ...delegating? oh, good one. move your xfinity services without breaking a sweat.
1:55 pm
xfinity makes moving easy. go online to transfer your services in about a minute. get started today. talking about intel but snap is set to report the first quarter results today. the stock is up 600% from the pandemic lows in march 2020. where does it go from here julia boorstin with key numbers to watch hi, julia. >> hi, kelly the key question is whether the company can keep up the growth of the pandemic. analysts expect 9 million daily active users to total of 274 million after adding 47 million daily users last year. revenue's projected to grow to $743 million on a narrow loss of 6 cents per share. key topics to watch are the impact of the apple's operating system to prompt users to prompt
1:56 pm
out of ad and how user engagement is changing as people start to interact more in person jpmorgan writing snap should continue to benefit as a strong direct response platform as marketers look to diversify ad dollars away from facebook and google we look for more color on how they make money from the different parts of the business like the spotlight and maps programs we expect strong margin expansion this year and snap remains in an investment mode with the spotlight creator fund likely weighing on near term profitability. the shares are up about 16% year to date and 72% of analysts have a buy or overweight rating on the stock but the numbers are going to be watched very carefully as a sign of what could come next week when facebook, twitter and pinterest report. >> twitter with a tough session
1:57 pm
today. thank you. before we go, take a look at the markets that tanked the past hour all started with headlines from bloomberg suggesting president biden to raise the capital gains tax rate, double it, no confirmation from other news outlets so the investors are still just perhaps mulling that and future tax increases likely to be needed one with an or the other for the proposals. we'll have more on "power lunch" after this quick break and talk about what's been going on in the housing market with home prices hitting historic highs and see you with tyler matheson right after this
1:58 pm
1:59 pm
wealth is breaking ground on your biggest project yet. worth is giving the people who build it a solid foundation. wealth is shutting down the office for mike's retirement party. worth is giving the employee who spent half his life with you, the party of a lifetime. wealth is watching your business grow. worth is watching your employees grow with it. principal. for all it's worth.
2:00 pm
good afternoon welcome to "power lunch. i'm tyler matheson kelly evans will join me there's reports that president biden will propose a 43% capital gains tax for high income earners. we'll break down the numbers and whether this is in any sense a surprise or whether he is saying it all along we all know the housing market is super hot right now prices are up. who's buying the homes a hint is your new neighbor may not come with two kids and a dog. i don't know whaat


info Stream Only

Uploaded by TV Archive on