operation. >> and berkshire hathaway, i came away from the weekend feeling very good about the succession and todd and ted and i feel like they did it right. >> all right you've had that stock for a good while. >> yes >> all right i'll see all of you on "closing bell" at 3:00 eastern time that does it for us. "the exchange" begins now. ♪ ♪ >> thank you very much, scott. hi, everyone i'm kelly evans. here's what's ahead. the death ceiling showdown we have had a lot of projections, june 1st from janet yellen, the street is guessing a week or two later. but what happens when we hit the s.e.a.l.ing? one of our guests is here to lay things out and what our market guest is waiting for, he says the drama presents a lot of buying opportunities. he tells us what he's watching and speaking of pullbacks, lenders are pulling back, credit is tightening.

we talk to a bank ceo and how much tighter he sees things getting. but first, to dom chu. >> gentle red tonight,because it is wait and see we're not expecting fireworks from this big meeting with joe biden and congress, but you never know so there's a little bit of cautious optimism. the markets haven't rallied strongly or sold off sharply because of it. but as kelly points out, it's just fractionally to the downside the dow down 1/10th of % the s&p down about 14 points it's been a down day so far, but at the highs of the session, we were down 11 points and 22 at the low, so it's been a tight trading range. the nasdaq composite is the underperformer, down about one half of 1% 12,196 the last trade there. let's check on the region al banks, because that is the way

things go. it is a down day we had a sharp upside after a big selloff, obviously for many of these regional banks. but pac west down 3.5% similar for western alliance, as well so snapping that two-day winning streak zion, some of these other western u.s. regionals not directly affected by the selloff and failures of silicon valley, signature and first republic, but caught up in the ripple effects. and then the stock to watch today, the worth performer in the s&p 500, paypal, shares down 12% right now. it was a generally better than expected earnings report, profits and revenues better than expected but even though we talk about this idea that more people are using paypal, venmo, payment volume is growing, but not enough to get paypal going in the right direction, down 12%. >> dom, thanks

the markets are waiting the outcome of joe biden's debt ceiling meeting with congressional leaders today. we're getting posturing headlines. republicans setting the stain last month bypassing a house bill "the new york times" says would cut spending by 14% over a decade the biden administration says it's a non-starter but the debt ceiling fight may just be the opening act in a new age of austerity joining me to discuss, andy blocker and ben white is here onset with me. welcome to you both. ben, you teased real talk, what do investors tell us what's going to happen this time around >> all right, kelly, i don't view this one as likely to be any different than the ones we have covered before, which is a lot of talk, a lot of noise, a lot of mess, and last-minute buzzer beating deal that satisfies pretty much no one out of this meeting today, i don't know where the cautious optimism comes from, because there's not going to be a deal

or even negotiations the white house is calling it a "conversation. good that they're sitting down, we have a few weeks to get this done but what republicans put forward the size of the cuts required in discretionary spending, nowhere close to anything democrats will ever do. republicans will not pass a clean debt limit hike. there will be time to get to that deal. after today, what happens in the next couple of weeks, we'll nash our teeth and get a deal >> it depends on the markets, right? they force a deal and tell you when we're getting to a crisis point. listen, i kind of feel bad for treasury secretary yellen. she's handed a house to manage and no money to do so. so she has to give us nthese headlines. when do you think the x date really is? >> so that's the trillion dollar question, i might add. look, i think june 1 is actually the front end of the possible x date but it can go all the way to

august the reason it can is because if you get to june 15th, you get a bunch of tax revenue you get to june 30th, you have a batch of new measures that gets you to august. but if you don't get to june 15th, that window is real. >> so june 15th is when corporate taxes are due, where you can get a couple more months out of this. what about june 30th what different things could they start to tap into if we had to >> yeah. so june 30th, you have an extra $145 billion that the treasury is able to move off of and not pay or suspend investments in the civil service retirement disability fund and the post office retirement health benefits fund e. that's $145 billion. that gets you to the end of june, july, to august. so that's what the june 30th importance is. >> so i have to say, you wonder why we've been talking about this today it's may 9th so maybe in the next 21 days, if i'm doing the math right, the money could run out and maybe we hit the debt ceiling

but if we don't, we could be talking may 9th about an issue that won't be front and center until august 15th. >> which reminds me of 2011 when we were doing this and got downgraded while i was on a bus to the jersey shore. but this is a difficult environment with the partisan dynamics so the path to get from where we are to a deal is not easy to see. but the time frame is longer than june 1, and there are other things that can be done and we can get to priorization at some point. there are other nings that can happen before we default on existing debt. but it is early in the game to freak out, but it is good to at least see the players in the same room for a cordial conversation the risk is republicans get

pissed off and somebody storms out, and the markets react >> this isn't just about the debt ceiling even if you're sick about hearing about the debt ceiling or think that the fight is stupid, we are going to have these debates how to manage government spending for the next couple of years. so the point is, debt servicing cost jumped in april almost 13% of tax revenues. once we get 14%, we start to see that we have to have a response, an austerity response in other words. i don't know what austerity looks like in the biden age, but it seems like we have to be aware that high interest rates could probably push us to that point one way or the other >> i think you make a good point. to be honest, in the biden age, austerity at the most is capping discretionary spending i don't see any major cuts beyond that. so i think, look, the republican package that now they're at the table they can do a deal, i think what the deal will come down to is more on the

extraneous issues, more like covid spending, things hike that, that can be the makings of a deal >> and we talked about that this morning, where there is a narrow discretionary spending cap of some kind. he said he thought the best of the worst options would be -- this suspect just about raising the debt ceiling we're going to have these fights about spending and austerity every time these issues come up now. >> that's right. peter and i talked about this, too. the 14th amendment is an interesting one which it says the full faith and credit of the united states cannot be questioned, therefore supersedes the act that established the debt s.e.a.l.ceiling in 1917 dug world war ii markets would not like that. some legal debate going on while we're unsure about whether we can pay our bills. but yes, once we're through completely the covid period, the

fed rate hiking cycle, that's when we can talk about some of the discretionary problems we have yes, we have been saying we're going to do that for decades, but borrowing costs rising, meaning we will have to do it eventually, but it's not going to happen now. there's too much in this economy that is at risk to be talking about austerity or to be flirting with potential default. sit a ridiculous thing to do >> final comment, andy, at what point would we start to see social security payments become jeopardized as we approach or pass the debt s.e.aceiling? how many different things have to happen before that's the next thing on the table >> once you pass the ex-date, you will have a situation where they meet all their debt obligations first and then protect social security. but once you get past the x date, it gets very uncertain it gets very dicey so it's not a game i would like

to play. >> all right we'll leave it there we appreciate it today again, that white house meeting takes place around 4:00 p.m. eastern time. we had some bond option results to get to. rick, how did it go? >> spectacularly well. all things considered. yes, it's the first of three auctions for a total of $96 billion. the front leg here today, $40 billion three-year notes as you look at the chart, you see the way yields fell at 1:00 eastern? it was a solid auction i gave it an a the only reason i didn't give it an a plus, there was one category on the light side 3.695 was the field at this auction, which is many basis points below where the market was trading. and if you look at the 2.93 bid to cover, that was the best since march of 2018.

indirects, 73.3, kelly i don't see that on my the category that was light at 13.7 and dealer 13%, a very low amount, which speaks volumes about the good demand that this auction and the fact that it's a short maturity only one of two, two year and three year are the only maturities that took out the fall high yield closes this year, even though after that, of course, they dropped like a rock in a river back to you. >> we will see if they drop like a rock again rick, thank you very much. rick santelli. the debt ceiling drama is not the only concern for investors. banks are positioning for an economic downturn. those conditions were seen across all business sizes, as well here to weigh in is the chairman and ceo of stifel.

before getting into this issue about loan demands and availability, what do you think is going on with the banking system we get the weekly updates, they tell us maybe things have stabilize, but no one kneels great about the situation and there's been no movement on the deposit insurance, at least on the business side. >> the fact that the fdic did come out with a proposal and their preferred proposal was something that i certainly feel is the right one, which is to expand insurance for business deposits but kelly, it's all interrelated the banking system is under some stress and they're under stress because of deposits and, you know, one month that's yielding by 50. you combine that with the failures and the regulatory response and what people are talking about is not making loans. they're talking aboutincreasin

liquidity and making sure the deposits stick around. that is called a tightening lebldzing environment that will impact the economy it's not difficult to see. the problem will be that we don't have an overly zealous regulatory environment that even puts tighter screws on this issue. >> one of the things that jumped out to me was weak demand. why do you think that is >> because loans are now what used to be able to borrow at 3% to 4%, now you're borrowing at 8% to 9% when you put that in your hp-12 calculator, what you can afford to pay, a house, office building or making an investment, if you are financing it with debt, your ability to pay has gone down and that is -- that's

effectively what the fed intended to happen that's why they raised rates in the first place was to slow down the economy. so this is all to be expected. i think the bigger thing is, i'll say this, the fed needs to stop right here, right now, oh okay and they need to look at the data inflation will come in tomorrow, but we've reached a point where the next couple of moves, i think, brings recession into play >> i take your point, but i'm sorry, my heart is not with you, it's with the american people and they're suffering from inflation. >> well, no, i think that's right. the heart should be with the people who would lose their jobs in a recession, when you see the unemployment rate get up to 6%, 7% chairman powell has the toughest job in the world i gave you my opinion, which is that you're seeing enough things break and come under pressure

that it doesn't hurt to take a little account of what's going on you can always move, but i think -- we'll see tomorrow, but i believe that we're in a place where we can pause, not only rate increases, but pause a little bit and let this economy get back on steady footing including the banks. >> absolutely. so we look at the data coming in it's lagging, grant it, the lagging employment, inflation looks sturdy but do you think the risk of a sudden stop in the economy is growing? >> you're talking about a recession? >> yeah, but kind of like, you know, more of a climactic crisis type of event that triggers that >> yeah, you know, that would be a geopolitical event, in my opinion. i think a lot of people got all -- got excited about a couple banks that failed

i was in the business in the '80s the savings and loans crisis was much bigger to the economy than what this is so i don't see that. in fact, we see the market rallying from here there's so much negative sentiment. you know, the old adage that markets climb a wall of worry. we upped our s&p forecast up 5%. >> i saw that. >> just yesterday. the fact that you're smiling makes me even more bullish >> no, no, listen, he's raising it to 4400 while he and others, yeah, we're going into a recession. why do people want to keep chasing this i don't understand it's like we're all having a wild party knowing that this terrible ending is coming. i don't know it's odd >> i don't know what wild party they're having >> the market since jan 1, ron this is not what anybody thought was going to happen.

>> true, true. but i think that there is a lot of negative sentiment, and i believe that if you look at the yield curve, what is it telling you? short-term rates are going to come down. you don't have this much of an inversion at the short end of the curve with the ten-year where it is unless you believe that inflation will come in and rates will come down they're not going back to one or two, nor is inflation. but we're not going to sit with this kind of inversion, the yield curve for, you know, for much longer. >> i just think you're in a good mood to throw out that first pitch you threw out on tuesday >> it's a curse. kelly, i want to talk about the pitch. it was a strike. don't put a speed thing on it, but it was a strike. >> we're showing you and the mascot of the cardinals. thank you for your time today. cond

look forward to checking in soon >> thanks, kelly >> let's juxtapose what we just heard, not the baseball, talking about the lending data with what is going on, on main street, with optimism is hitting a ten-year low and new data from goldman sachs shows 77% of small business owners are concerned about their ability to access capital. a year ago, 77% said they were confident about that how does it compare with the latest data? kate has the latest. >> reporter: getting new data on the small business lending situation. 6% of owners said their loan was harder to get, down three points from the pre-recession level that we talked about last month. interest rates are continuing to rise for owners at the highest level since october 2007 at 8.5% on short maturity loans. of note, as you just mentioned, the data lags, so this is prior to the latest banking collapse that will happen in the may

reading. the group's chief economist writing -- >> the group does note that a banking crisis does not appear to be a major risk and bad loans weren't the cause of the recent failures overall, optimism dipped in april. there are some signs that inflation is easing up a bit, as it's still a top issue, but it's been replaced by quality of labor, which we haven't seen for the better part of a year. along with those who expect the economy to improve so not a great picture here on main street. >> despite the raising cost of capital, 8.5%, 9% for loans, but a lot of the corresrespondents,t saying access to capital was not the top concern. >> as we said, labor quality back in the top spot inflation number two but back to the goldman sachs

survey, 61% of owners found it difficult to access affordable capital. so it's not that they can't get it, it's just it's more expensive, do they want to take on that high interest loan right now in this environment? that's the key point moving ahead. >> kate, thank you we appreciate it our kate rogers. we'll take a quick break coming up, the head of one of the largest hotel chains in the world. we'll get a read on travel demand plus, is it time to t-bill and chill until after the debt ceiling showdown how to protect your portfolio. and here is a hook at the markets. dow is down 37 points. the nasdaq with a half point drop ten-year note back above $3.50 "the exchange" is back after this

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welcome back to "the exchange." choice hotels, shares a little lower after earnings they were up about 11.5% this year, as well. the company posting an earnings beat they raised their guidance, which very few people are doing, although didn't raise as much as investors were hoping. joining me now is the choice hotels ceo pat, good to see you

>> great to see you, kelly >> i thought about our chat last quarter, when you called out infrastructure as driving demand for your hotel rooms i'm curious if that is a strong tail wind or moderating. >> it's still a strong tail wind and a tale of two stories. you have the government infrastructure spending, which will take time to get going. but what's been remarkable is the private sector construction boom that's going on around manufacturing. last year, i think the number was a record number of $108 billion in spend on construction on manufacturing facilities. that is expected to be $141 billion this year. so we are seeing the private sector and the public sector beginning to rebuild america, whether it's infrastructure, whether it's factories you know, we're seeing it in the hotel business, as well. but it's a really nice tail wind that we expect to see that will drive demand for mid-scale hotels which are our sweet spot. >> if you look out to the rest

of the year, what starts to color -- you know, it's the obvious, right we know that the outlook darkens because we just had a, call it a bank crisis. we don't know how that's going to shake out is that where you start to worry about the trajectory >> just two weeks ago, i was with about 5,000 of our franchisees and general managers we gather once a year, and it's a great opportunity to hear what they are thinking about. they're seeing supply growth as muted in the hotel sector. they're seeing demand growth to be at record levels in 2024 and 2025 that's the perfect time to be building a hotel right now, when you look at the ability to get capital, capital is more expensive. but for our hotels, the equity check that our owners write is they put more equity into a project than you might if you're in an upscale hotel. so the debt check, the loan amount is not as large they are optimistic about their

ability to get financing when i look at our hotel pipeline, we have 925 hotels in our pipeline half of that is already financed so we feel good about the ability to continue to grow our business because of the sector we're in and the type of small business owners we have, who own our franchises >> abosolutely i know that work from home is still changing the way maybe that people travel and show up at your rooms. is that going back to normal now, because we know the labor market is tightening and companies are pulling people back >> no, kelly in fact, we're continuing to see occupancy grow on what we call the shoulder nights of the weekend. so we're seeing leisure travelers extend their weekend into sunday night and starting their weekend on thursday night. in the fourth quarter, that was up 4% over 2019. we saw that continue into the first quarter where it was up 2%, as well. so we're continuing to see that remote work trend really

establish itself the other thing that's exciting is the number of retires in this country is growing when you look at the labor force participation rate of people 55 and older, there is a great study that the st. louis fed has done that shows there's a lot of people that retire early because of the value in their homes and stock portfolio, which over the last three years has grown significantly, they feel comfortable with their net worth to retire permanently. so those are folks who have more leisure time they're living longer, more active those are great travelers or our brands >> you sh-- that age cohort, thy tend to be restaurant spenders and could keep restaurants going through a tough, economic period >> by the time we get to 2030, one out of every five americans is going to be over the age of 65 so 3.5 million people a year

reach retirement age, and so we're beginning to see this become a permanent part of our consumer base. the other thing that they got this year was the social security cost of living bump of 8.7% so they do have more spending power to stay in our hotels. >> one more segment turns into a glowing review of 65-year-olds, i'm going to start getting worried. pat, thank you for joining us today. good to check in with you. >> thanks, kelly >> ceo of choice hotels. still ahead, the cost cuts continue with amazon now paying customers to pick up their own orders is delivery past its prime and here is a look at the dow. names like intel, even nike, only a handful of companies in the green. the dow down 35. thng iba aers ckft is

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from those out-of-pocket costs medicare doesn't pay. oh, and happy birthday... or retirement... in advance. welcome back to "the exchange," everybody nasdaq, down half a perpercent let's keep an eye on some of the movers trex show gross margins of 40% this is for the desk ck maker come poise it decking continues to take share, despite a decrease in lumber prices. elsewhere, sky works shares falling. the sky is falling after the shipmaker gave weaker than expected guidance. the worst performer today, where every single name is in the red.

down about 2% overall. but you've got monolithic, analog devices, even global foundries, down 7% today after getting hit on revenue forecasts below estimates. and the ceo of global foundry also be on "closing bell" today at 4:00 p.m. eastern let's get to steve for a cnbc news update. a draft guidance issued by national says women should get screened for breast cancer every other year starting at age 40, ten years earlier than current guidelines which suggests screenings to begin at age 50. the task force says the recommendation is based off of new evidence showing that more women get diagnosed with breast cancer in their 40s. jury deliberations in e. jean carroll's lawsuit against president trump began today. she said he attacked her in a

new york city department store three decades ago. trump calls the allegations a hoax the jury will determine whether trump is libel and if carroll should be awarded financial damages. and starting this friday, international travelers to the u.s. will no longer need to be covid vaccinated in a statement today, joe biden said "we are in a different phase to the response of the coronavirus. the restriction was opposed in october of 2021. for u.s. travelers, keep in mind there are still some countries that do have a rule that you need to be covid vaccinated. >> do you know them off hand >> philippines japan is up there, as well a couple in asia >> seema, thank you. coming up, the debt ceiling overhang on stocks is it time to t-bill and chill we'll discuss that on "the exchange" right after this

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welcome back to "the exchange." stocks are in a tight range ahead of the white house meeting on the debt ceiling. my next guest says any downside volatility is an opportunity to pick up equity the short-term fixed income and money market accounts are a great place to hang out.

joining me now is the ceo of destination wealth management. michael, good to see you again is that where you've been allocating capital, relatively speaking >> we've been raising money for cash, yeah as we rebalance portfolio strategies, we're looking to see where we should -- the most opportunity place to put money, certainly with what's happening with the debt ceiling. we don't think it's time to go out on the edge and take too much risk. however, if you have dry powder, and that's an initial overreaction, which history suggests might not happen, we think there's an opportunity there to move into som equities >> i heard jenny harrington say this last hour, man, if i had just bought lockheed martin a decade ago, it would have been a great name to pick up. is there a name that comes to mind with that kind of opportunity that might present itself >> yeah. i think all of the obvious names, whether it's microsoft or amazon, whatever, any of the obvious names, the big cap check

is appealing, given the multiples they're trading at now. just overall the market, you know, there's a lot of concern about the debt ceiling we could see a selloff i gave your producer some data talking about how the markets vn really sold off in the last three debt issues. the one before that, the market sold off 15%, creating tremendous opportunity >> so the issue now, is if everyone is using the playbook from last time this time, they're waiting to pick up, is it possible the selloff doesn't happen >> very possible i think in my view, it's likely the selloff doesn't happen >> really? >> yeah. i just -- i think this is going to be -- the thing about biden, he's very much a negotiator. even though there's a lot of positioning right now, if they don't come to a debt agreement, they may come to a debt extension, which they've done before and i think it's going to be very short-lived when you start having social

security checks not bouncing but not being septembnt out, the is gets resolved. >> if we don't have a pullback, there's no need in having that list of stocks to buy on a pullback so you have to buy it now or do you wait for a worsingen macro >> i think that what you want to do is look at some names that you would buy, whether or not there's a pullback in other words, good valuation names and get them at even more of a discount. and i heard you say previously what did you say, chill -- >> oh, t-bill and chill. goldman coined that. but it was before the bank crisis, so it doesn't seem so chill anymore. >> exactly but i think you get 4.5, 5% on money market accounts right now. that's pretty appealing. so even if there isn't a pullback, even if you don't have

an opportunity to drop equity, you're getting a 5% yield, which is not bad >> i guess the last question, anywhere you have a high conviction that you would say you're out of consensus with the market anything that you're excited about? >> let's talk about it from a perspective of something that i'm particularly not excited about, which is china. i think there are still big, structural problems in china as they convert from an export economy to an internal consumption economy that's going to cut gdp in half i don't think the market is pricing that >> in half we did see this in earnings. estee lauder, a few other names were stumbling we're going, you would think with all this penlts up demand, where is it going? you think their gdp is cut by half >> china used to be a 10% gdp country. the expectations for china, it's

not so great it's about whether your economy is based on exporting goods at a cheap rate with low labor costs, or if income goes up, internal consumption. that's where china is right now. income is significantly higher therefore, they're focusing more on internal consumption, which is going to naturally slow down gdp growth and naturally, in my view, will affect the equity market there, as well. >> and there's some disappointment in some u.s. stocks hoping for big opportunities there. michael, always a pleasure thank you. >> thank you, kelly. the tech cost cutting measures continue and amazon will now pay customers spotify is purging tens of thousands of songs thanks to ai. we have all the details, next. and ibm taking another chance on watson the ceo will join "closing bell" to discuss that today. don't miss it. "the exchange" is back after this

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welcome back, everybody. you can nab an extra $10 just for walking to your extra whole foods. amazon is giving customers money to pick up their packages rather than have it shipped to their homes. i'm thinking about it, diedra. >> amazon has put so much capital into building its network, and they have been rewarded but others like shopify have tried and failed amazon may now be trying to shave costs off of logistics by offering $10 to pick up their own packages from an amazon pickup point like whole foods. they're also encouraging customers to group packages. $1 to push out delivery dates or a small fee for ups returns.

amazon says this is not a cost-cutting measure they have offered this time of promo before and they say this is all about convenience for the customer but even that raises the potential challenges of amazon's network against that traditional brick and mortar retailer like a walmart, which 890% of the population lives within ten miles of a walmwalmart. >> i think that you're right when you talk to the retailers and the analysts, they say the buy now, pick up in -- any way, that is kind of the new -- the best opportunity that has good marge bs, works well for them. so amazon needs to match them at that strength. >> and amazon, remember, doubled its network capacity over the pandemic, sent billions of

dollars. walmart is using what it has, spending a lot of money on the back end for that e-commerce piece of it. but they have this -- what did you call it? they have that built in, and during the pandemic, amazon, still trying to be everything to every consumer, but it's going to cost in different ways. >> we saw the earnings in the margins were slim to begin with. spotify is now using -- is it using ai to purge songs or who is booming what's happening here? >> okay. so this is wild, actually. so boomy is an app to make muse wick the assistance of artificial intelligence. that's not new people have been doing that for a long time. what is sort of new is that a lot of those songs are ending up on spotify, kelly. do you remember the weeknd and drake? it was a huge and gigantic hit more people are listening, but

also there's more bots on spotify moving up the song count. so it sounds like more people are listening to these songs, but they're not actually these are just ai bots this is really confusing bots on bots on bots but the point is, we are starting to see very quickly the unintended consequences of generative ai, of ai being put in the hands of consumers, leading to all sorts of problems with copyright, with listen counts that's one stat that my producer just identified to me, boomy says it has created nearly 14% of the world's recorded music. so 14% of the world's recorded music is generated by ai >> in a way, i say we should embrace this, as long as the drakes of the word can get royalties somehow. >> well, that's the question, right? are they able to and it's already such a difficult issue, who gets what, are you how breaking up the

artists don't necessarily get enough of that if you're bringing ai into this, then on the flip side, folks argue too that ai will help solve this problem ai can do everything >> diedra, thank you very much we appreciate it by the way, speaking of ai and how to deal with it, lina khan will be on "squawk box" tomorrow coming up, shares of primerica a little low, but they did beat earnings. we'll talk to the ceo about the health of the american consumer, next and cnbc is celebrating asian american and islander heritage h ♪ ♪ >> it's really important for allies and those not in the asian community to understand some of the values, some of the cultural nuances and beliefs of

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welcome back shares of primerica slightly lower this morning the life insurance company saw a 14% uptick in issuance from the prior year and the stock is up 28% since january 1. joining me now to discuss is the ceo, glen williams great to have you here today >> good to be with you. >> would you consider yourself a beneficiary of this high bond yield era?

>> the increasing interest rates do aid most life insurance companies. while we were a term insurance company it doesn't help as many of the others but it is certainly a positive. >> a lot of millennials because of the pandemic started realizing maybe they need life insurance. have you noticed that as a driver of your trends? >> we clearly saw during the pandemic the demand for life insurance increased. you can imagine why. that happened across all age groups we saw. i think millennials are taking a particular interest as they age into the period of more responsibility for others in their lives. we see them coming forward and needing financial guidance and protecting their families more than before. >> how expensive is the product? is it a hedge win to people who want life or term insurance? >> we serve the middle income market place and they are living a difficult time right now many of your guests today talked about frightening topics middle income families hear about a bank crisis or debt crisis but they are living a cost of necessity crisis every

single day they're always prioritizing in their budgets. we find they place a high priority on protecting their families, investing for the future, and getting out of debt. we are seeing a good strong demand. >> what about investment products is it a big part of your business and how does it compete with the pretty high rates on something as safe as a treasury bill >> there are head winds in the marketplace right now. we are a long term, systematic type of investing company, the type of guidance we give so any time to start is a good time as long as you have a systematic plan to invest over a long period of time. we see periods of head winds and tail winds but we are seeing good net flows as you mentioned in our business right now. we're seeing more people coming to us to invest than redeeming for those financial challenges that they are experiencing there is good, strong demand in spite of all the noise around us >> i am curious about annuities

which are starting to get more interest lately. i'm thinking about the fixed annuities that may pay out in conjunction or after a 401(k) plan there is a lot of uncertainty and the idea of hey i know what my income stream is going to be is very attractive to people i think they are maybe making moves, maybe offering in 401(k) or corporate plans do you think there is going to be more interest in annuities in the years to come? >> we do see a shift toward annuities during uncertain times because of the guarantees embedded in the product. so that is what we're seeing today in this uncertainty and i think probably consistent with the rest of the industry even outside the middle market where we live and do business. i do think there is going to be increasing demand. i imagine it will ebb when there is more confidence in the future of the market. some of these frightening dynamics we're discussing today start to ease some, i think you'll probably see a make shift back to less guaranteed products. >> would you say the bank crises

over the past couple months have been a head wind or is there any opportunity there for you guys >> as i said, the middle income market knows about that. middle income families, clearly, it is frightening. so there is an emotional impact if nothing else. if they don't see it in their day to day finances yet or at all they still have the emotional reaction we find most middle income families are looking for someone to help talk them through it and walk them through it to get to the right place. so it is clearly a head wind but may not be affecting every middle income family every day. >> right do you think that population group is still going to be doing fine in six or nine months' time >> they are a resilient bunch. we survey the middle market every quarter to make sure our finger is on the pulse of how they're feeling and their views of how deep a crisis is or how much opportunity is available. i'm always amazed at how resilient and optimistic they are. we are seeing reduced savings rates, increasing use of credit cards, less confidence in the ability to save for the future

and so over time it is starting to put real stress on middle income families and their budgets. >> interesting glenn, thanks for joining us with those details we appreciate it. >> great to be with you today. >> glenn williams is the ceo of primerica. that does it for us on "the exchange" today. we'll talk to the ceo of an all electric tractor company next on "power lunch.

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welcome to "power lunch. the big story today as the u.s. gets closer to that debt ceiling deadline and potential default, president biden is meeting with congressional leaders this afternoon. we'll look at the potential economic damage and the market impact plus, paypal plunges after its earnings report amid weake