background it's a well-earned company and totally different business than at first republic. >> good point you just made and thank you for doing that >> joe t.? >> a quick update on eqt which i bought a month ago and i have a 7% gain right now on the stock and take a look. natural gas prices are higher, as well. >> stocks are looking to break out higher i'll see you on "the closing bell." "the exchange" is now. thank you very much, scott hi, everybody. happy monday i'm kelly evans. here's what's ahead this hour. the fed is done raising rates and has already won the war on inflation and a bold call from million air paul tudor jones and even with more signs today the growth is slowing and officials say more work is still next to be done and their next decision is more than a month away and we'll take a look at what it means in the meantime. regional banks and you were hearing a debate about that and he sees a buying opportunity in

the crown jewel as the broad index remains 50% below its highs and he'll tell us which names he is eyeing and the first legit merger monday and several big deals to tell you about, but are they part of a larger trend or not we'll dive into who could be next and find out if the answer is yes and we're seeing a much better tone than we were this morning and the s&p is up 11 to 41.35 and the nasdaq is on track for its third positive day flipping over to the rate picture, this is the case even as rates seem to be firming up somewhat the ten-year, 250 and the two year has been almost placid, want moving right at 4%. we had a hawkish fed speak and we have the there are lower after the best week since september. still down over 102. the increasing trend is still evident if you go back to last monday we are watching shake shack where they are planning to run a

proxy of three seats and they can double profitability and it could be a tough two years in terms of the macro shares continue to rally throughout the session here and they're up 9%. hitting a 52-week high today and still 50% below the all-time highs we saw in feb 2021 total consumer debt hitting a new high of $17 trillion and we learned this from the new york fed and this was for the first quarter and mortgage debt, still the biggest chunk of that and offsetting weak activity and refis were the lowest in over a decade and notably, we didn't see the usual q1 drop in credit card debt which came in flat, watching these credit trends closely, as we got evidence, as well that manufacturing continues to weaken. this time the new york region back to those january lows and more than a negative 31 reading and all of which is raising the question is it time for the fed to stop hiking here is what paul tudor jones

told andrew ross sorkin on "squawk box. >> i think they've done hiking i'm so glad i don't have his job because listening to these guys try to not say what they really want to say and what they really think. >> what do you think he really look wants to say? he wants to say we're done we've gone too far and enough's enough >> he was spikily referencing austin goolsbee this morning he spoke to steve liesman in the financial conference let's bring in steve with more reaction along with kathy bosstancyk and going back to michelle bowman on friday, even with goolsbee, there is hawkishness from the fed officials. >> even the dove is a little hawkish. two fed presidents spoke on cnbc this morning saying they were content to hold rates at current levels and gauge the impact of what amounts to 500 basis points of tightening on the u.s. economy before figuringity on

what is going to happen next and his bias is toward higher rates if inflation does not recede. >> if i had a bias between going up and going down as our next action i would say we might have to go up what we've seen is that inflation has been persistently high consumers have been really resilient in terms of their spending and labor markets remain extremely tight all of those suggest that there will be upward pressure on prices. >>stick pushed back against rate cuts in the fall with january '24 trading around 441 rid now or 75 basis points under the fed's own average forecast and bostick said he would not cut rates in a recession and he still had concerns about the impact on the banking turmoil on the economy and that was a decision to support a rate hike earlier this month a tough one >> the thing that made it a close call for me was this big question mark about what is going to be the impact of this

on credit conditions and in our business contacts and our looka the data it didn't look in that period like it had gotten notably worse yet okay, one more neil kachakari, said and i don't think they feel like they've gone too far and i think they are where they want to be right now and just let things hold and settle out and see if they have any impact on inflation. >> or maybe goolsbee would be even more -- he was pretty clear, i thought, in his comments as well kathy, i want to turn to you i don't understand bostick's point where he would not cut rates in a downturn. if there's evidence that wages, for instance, are high because the labor market is so tight do we think they wouldn't come down in a recession?

>> kelly, happy to be with you >> well, i think this time it's different. after pausing after the fed is traditionally cutting rates and that's usually because we are in a recession or heading into one. i think this time it's different because inflation is so elevated and sticky, and wage growth. we talked about this before and wage growth is the main reason it went up and it helps to keep it elevated. so i do think this time it's different. the key is seeing inflation slow if they see that meaningfully and their confidence going back to 50% >> i guess i would take issue with the idea that inflation is sticky or elevated because we don't know yet we've already seen the cpi retrace a third of its increase and we've seen it go way hot and turn way down and michael darden was going like this the other way and the fed had predictive

power and it was positive 200 and now it's negative 200 and it seems like this is going and we're not in a situation where inflation would stay high and sticky and maybe only the consumer expectations, but it wouldic make sense that they would be delayed and why he thinks that they would be a case for keeping rates high even as the economy starts to weaken >> well, i think that, you know, i guess we would take a different view in saying it's not clear that inflation is going to decline swiftly i think it will be a gradual descent, and look at transportation services excluding airfare. we're seeing a lot of still, rapid increases and car repairs which we look at very closely and maintenance is up almost 17%, running around 20%, really. so that's a real problem and

that is really to the lack of supply for new cars and also used cars and that has improved, but it is still far from back to normal and that may take until 2025 to get back into better supply/demand balance. >> i think there is a bias and that's where we would be, as well >> i guess it would make sense that it would take to 2025 because it took us months to get to cpi inflation it takes a long time it happens with the lag and we can say inflation is still down to 2025 and that's still consistent with us being able to cut rates considerably and the neutral rate keeps dropping right now. arguably, policy has tightened without them doing anything further. >> yes, that's true, but it's not going to come down on its own and i think it's the idea of the federal reserve and you heard them talk about the history of these things which is quite a bit. in the past when they've taken

their foot off the brake and inflation is back and they're definitely concerned about that. i do want to underscore austan goolsbee who said it laughing and kind of serious and he pointed out that svb, as part of its outlook and its interest rate stance on the portfolio and the idea that the fed would cut and inside of that is a little warning of don't fight the fed take the fed very seriously when it says it's going to maintain a high rate until inflation comes down the market has this bias in it for cuts we've got 75 bases points next year and cuts as soon as september, and i keep hearing that's not on and the market has that wrong and even goolsbee as you correctly point out is one of the more dovish guys out there saying you'd be making a mistake if you bet the farm on it >> we have the senior loan survey there doesn't seem to be emphasis at all with leading

indicators and i think it's fine because they're pointing one way, but time will tell and the future is never certain and i don't see a lot of discussion here at all and what would you say is in terms of what the economy looks like in two or three are thequarters' time and maybe the numbers didn't rise as much as some people thought, but the cost of funding went up, right and the spread relative to banks and funding cost and there is a significant tightening coming on and we don't know the degree and i don't think they're going to pause and i don't think they'll raise rates any further and they want to see inflation come down and as steve said, they saw the 1970s and they don't want to repeat that and unfortunately, they're going to err on the side of the interest rate economy and they're really going to want to see the whites of the eyes of inflation slowing before they

take the restrictiveness out of policy >> quick last words, steve >> yeah. kelly. how tight the fed is depends a lot upon what input you use to come up with the real funds rate and the inflation-adjusted rate. if you use the current one-year inflation expectations and the fed is not that tight and it is relative to ten or five or ten-year expectations and, but not one-year expectations and people who i'm speaking with that perhaps the fed needs to go higher, 5.5 or 6% is a possibility out there with the big caveat being how much work does the banking credit standards do for the federal reserve and what i'm hearing here is that there's not an expectation that is going to make me a major economic downdraft and it would take a point of gdp right now and that's the thinking and they are not banking on a recession being caused by tighter.

>> i'm sorry, steve, the consumer expectation or what the market thinks? >> consumer one-year expectations is somewhere in the 4.5, 4, 6 area that mean the fed is a half a point or 60 basis points tight it would suggest that you would be 1.5 to two percentage points tight relative to where they are and the target. >> as we heard this morning from mr. bricks when he was on the 11:00 hour when he said those consumer expectation, and that becomes one of the most important things every second friday at this point we'll leave it there and appreciate it, and steve liesman and kathy bostjanic on the economy. believing the markets will finish the year higher from here and saying he'd buy any debt ceiling tips and my next guest is picking through the regional banks for opportunity and sandy

vilar is here and you've been busy, sandy and looking at the regional banks in particular >> yeah. it just seems kind of the pond we want to fish in we always want great stories with short-term awards on them and it just seems this is an area where we were under weight and we don't want to be long financials in the recession and now it's down 36% on the year and it's down 50% off its high and now you're seeing opportunities with really, really high quality banks with it feels like a nice area to dust off the file and put some money to work. >> we just showed your five names and the pncs of the world and is that because you wouldn't get into that market cap size or you think they're less attractive >> yeah. i just think this is where the opportunity is the regional banks have four times as much exposure and commercial real estate is the money center banks and so they've been overly beaten up, i

think, because of that and anybody with exposure to office and hit 12.9% as far as vacancy goes and that's an all-time high and if we can see those exposures and we can find a little bit of a diamond in the rough and i just think that's a great opportunity to pull up the webster financial in new york and health savings accounts and very sticky, small balances and it just feels to me like something of an opportunity as opposed to not >> eric rosen green, which would make some sense if you think those are really sophisticated players who are eager especially if there are more commercial clients to pick up that yield and almost have a fiduciary duty to whereas banks have an opportunity clause, but i'm not yet needing to pick up my money to move it there >> yeah. we're seeing it with our clients. we are a custodian

we are buying the money market accounts at 4.8% and deposits are certainly leaving banks to go to higher money market yields and you're certainly seeing that with the net interest mortgage and it's come down as people are not going to borrow as much money with higher rates and they'll certainly put their money away, but at some point you're left with core deposits that are tied, too and you can see some stability and the banks we talk to, it feels like the deposits are no longer fleeing, it seems like and this is a great opportunity to buy when things are really uncertain and things are cheap >> webster financial is a new york bank and pinnacle is in nashville and we've spoken with the ceo of number bank prosperity you're looking at regions of the economy that are strong are and what about the new york bank, webster? >> yeah. i think -- again, i don't own

it we're looking at hard, but i do like the stickiness of the deposits and not as much commercial exposure and not as much office as you see elsewhere and i think it's one worth taking a look at and we certainly like those texas markets and prosperities in houston and number bank is basically in mckinney just north of dallas and also had exposure at denver and if you look at those really, really nice regions and a solid backdrop, you can pick up a crown jewel of franchises and say there's blood rising in the street and if anyone has a two or three-year horizon, this is when you're buying into sectors like this. >> i think recession could be coming in q3, are you waiting for that for valuations to be deeper or will you buy them here >> we'll be looking in the next month. we're getting into the seasonal type of timeframe where you could see a little more volatility, but if you were to

get a bigger sell-off because of the debt ceiling which i think, they've raised the ceiling, 78 times since 1960 i just feel it's more of a political situation at this point and it's something done and you do see sell-off as it relates to that and you could be moving quickly than waiting a month or two >> thank you so much today we appreciate it sandivilleari with villari and co >> one of these deals are worth $19 billion and it's an energy play and could there be more mergers in the pipeline? we'll debate first, chewy poefrting back-to-back weeks, and one analyst naming it a top pick ahead of results on the valuation call is it more bark than bite? as we head to break, a quick check on markets and the dow is at session highs with the dow, racing a loss. the s&p is up at 4140 and the small-cap russell as sandy was

talking about up 1.6% and the ten-year note up 51, and we'll be back here on "the exchange. >> this is "the exchange" on cnbc oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business. ♪ imagine, a car that goes as far as it does fast. as sleek as it is spacious.

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welcome back to "the

exchange," everybody chewy is up higher today, but still down more than 70% from the all-time high. naming the stock a top pick saying the shares were at the lowest valuation since the first quarter and versus a peak at five times sales and here to discuss why he sees 50% upside the analyst behind this call is david behind this call. >> hi, kelly thanks for having me. >> is cohen still involved in this stock >> he is not this is a ryan cohen-free, chewy as a business, valuation reset is it profitable does it make money yet >> chewy's had an inflexion point in my view and they've had a big step up in active customers and the end of 2019 had 13 million actives and now we're sitting at over 20 million and over the last four quarter and positive ebitda and positive net income with the conversation or not, and i think this is becoming a much more profitable

business from here you've got $11 billion in revenue now and about 7 or 8 billion of that is auto ship and you are around that and they have great visibility just given the subscription model is really working and i think that's what helps chewy get to the next level from here. >> at some point do we start talking about valuation in old fuddy duddy p-e terms or are we aways from that? >> i'm looking at valuation in terms of revenue at this point as chewy continues to invest and build out their business model, but as we get a little further out and maybe a couple of years from now we'll start looking on this on an ebitda basis and eventually p-e, and i do think there is a coiled spring dynamic here within the earnings line and once they move past these larger investments, chewy is going international now and they're also going into health care and the higher margin businesses and that can push them into a high single-digit type ebitda business and with

that you get a big step up with earnings growth. >> is online delivery a business model with long-term promise and is the profitability going to deliver high valuations? >> it's a great question and it depends on the category. chewy, it is a big and bulky product and they are delivering some 50-pound bags of dog food, cat litter and things of that nature and going back to my point earlier. they have hit the tipping point in terms of scale where they can make these two-day deliveries and do it in a very profitable way and just step back here for a second chewy is not like some of these other e-commerce names where you had a big pull forward in demand and i'm talking about a wayfair and carvana. >> and i was thinking about wayfair and the management team's aggressively investing behind it. so chewy's largely sidestepped that and they didn't step up and over hire or build their expense base in a way where they can't

catch up to that and now we're seeing some of these other models, really have the pull back and revenues unwind and chewy is largely immune to that and there is a double digit quip and that continues from here on out. >> i was going to ask if they were the only name in your universe that they were positive on and they're the only online retailer which mostly has names like autozone and five below and yes, wayfair and home depot which you're neutral on. why do you think there's 50% upside in the near-term in what could be a recession within a quarter or two >> yes i do cover an interesting group and the consume are e-commerce and chewy is one of these names with big potentialupside here and it's a bit of a hybrid where we're all talking about recession and it's been a fantastic story. they've passed through pricing inflation and the largely a

beneficiary of that and it is one of the healthier categories. if we do have some kind of spending pullback, i think chewy is pretty safe and if we get a all-clear to the growthier names and names like autoparts like autozone, riley, and they could potentially become a source of funds for the higher growth names if we do have the all-clear. mastercard and visa and nvidia last decade and autoparts retailers are in a similar hot streak lately and you're positive on them still, right? >> i am in unison with this. i notched down o'reilly auto for my top pick and i still have a buy rating on it and this grinds higher from here, but if you look at the last year, the stock is up 60% and i think smarter investors are getting ahead of that and start to trim, and i think the days of 60% upside a year it's largely in the rer view at this point >> all right

david, good to have you on today. thanks for your time >> david bellinger with roth mkm. >> still ahead, the clock is ticking and it's a session to get a deal done and what he expects to happen with the debt ceiling on markets and the economy. >> as we go to break, here's a look at the dow heat map and we are evenly split and the blue ntr s are trying to avoid thei teh down day in 11, by the way. "the exchange" is back after this no, don't worry about that. here we go. - asking the right question can greatly impact your future. - are, are you qualified to do this? - what? - especially when it comes to your finances. - yeehaw! - do you have a question? - are you a certified financial planner™? - yes. i'm a cfp® professional. - cfp® professionals are committed to acting in your best interest. that's why it's gotta be a cfp®. find your cfp® professional at letsmakeaplan.org. ♪

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where our focus is to always support the people who live and work there. because you call these communities home, and we do too. pnc bank. (christina) with verizon business unlimited, i get 5g, truly unlimited data, and unlimited hotspot data. so, no matter what, i'm running this kitchen. (vo) make the switch. it's your business. it's your verizon. welcome back to "the exchange." the dow is trying to avoid its eighth down day out of nine in what's been a bumpy session. the s&p a bigger margin of

safety and the nasdaq's got the cushion today. it's up two-thirds of 1% let's take a look at shares of sofi, we covered them in the last couple of weeks and today a very different story with the shares down 5.5% and earlier down as much as 11% on the sessions why? web bush this morning downgraded the stock to underperform and slashed their targets trading at 4.75 to 2.50 from $5, sofi used the same accounting club and it dropped 50%. sofi says they're using company-specific and macro factors to what a sale price will be and they're consistent with prior quarters and whether the loans are marked for sale or to maturity and the accounting treatment is the same. you can see a lot of these concerns are evolving around the regional banks and business models in fintech are coming home to roost with sofi shares on the bearish call today. let's get to tyler matheson for

a cnbc news update. here, folks, is your cnbc news update at this hour the united nations has a toll on the russian invasion of ukraine and the u.n. confirming more than 8800 civilian deaths since february 2022 and cautioning the true toll could be even higher this comes as president volodymyr zelenskyy is in europe to shore up support from allies ahead of a planned counter offensive in the east of ukraine. heavy rains over the weekend posing a threat to the migrants crossing the u.s. southern border after the lifting of so-called title 42, officials from the national weather service said the deluge is expected to swell the rio grande river and make crossing even more dangerous amid the expected migrant influx, dhs officials have expanded the cbp1 app to allow up to a thousand people to make appointments to apply for legal

asylum and more severe weather expected in the pacific northwest a weekend heat wave continuing today with cities like portland and seattle setting records. yesterday the hot temperatures also extending into parts of western canada, fueling the unprecedented wildfire conditions out there in the west kelly, back to you >> tyler, i will see you soon. thank you very much. coming up, with the dow hanging on to a four-point gain with microsoft's potentially doomed takeover of activision blizzard and that's just one of three major deals making headlines today, is deal making back into the market and we'll debate as the dow turns negative again next

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benefits. payroll. compliance. trinet. people matter. welcome back to "the exchange." we've got deals to talk about today starting with energy with one oak buying magellan for $19 million and the crude oil transport business and on the deal while magellan is up 11% as the gold producer, and finally, the eu greenlighting microsoft and activision's megadeal after

the uk basically already spiked it both of those shares are higher. where should we expect more dealmaking and we're not for more i'm joined by dan pickering of pickering energy partners and he is the cio and dan axios, welcome to you both dan, let me start with you because what phase of the dealmaking cycle are we in we seem to have as much bankruptcy filings and we see private equity starting to get involved and we're early stages there and we have an administration that's hostile toward a lot of big deals happening. just tell me where we are in the cycle. >> i think we're in private equities' sweet spot and you were talking about a bunch of strategic deals and that was today's merger monday and private equity has an enormous amount of cash and even though there are problems in the leveraged financing market and the private market has access to capital which are often looking to invest and refocus on core businesses as growth slows and then as you said, you do have

this antitrust situation which is what private equity hasn't had to deal with and it's been one strategic buying and another. >> true. >> to me this is for financial sponsors >> let me follow up on that which is an interesting point and they don't want to see corporate combinations although it seems like in energy and mining they'll let these move forward and will they ever step in and tell a private equity firm, and it sounds like they're delivering up these deals if they can't be bought by a competitor >> the next time will be the first time it hasn't happened yet and when you hear the ftc and the doj, they definitely have a much more expansive view than have past administrations and so far, i haven't heard them go into private equity and look, this is a reason private equity is not always systemically risky and they do hold these individual companies and silos and so far we haven't seen private equity

take one giant portfolio company and try to merge it with another giant portfolio company and two that are market leaders. >> true. >> so if we are in a sweet spot with pickering i know we spoke to you about this a little while ago and one-oak shares are down 10% today. what does that tell you? >> kelly, in a world where growth has slowed in the oil patch and we're in a capital discipline world for energy companies and when you're not growing organically, you look to grow via consolidation and you combine companies and we're at the pretty early stages for the energy sector. it's not going to be private equity driven and it's self help and organic cash flow driven and i think you'll see more. you see exxon buying pioneer and this is a nice, mid-stream deal and i think we'll see more >> what does it tell you that we haven't seen exxon go for pineer

or anything of that size and scale. is there a sense that they sensed pushback when that was floated? >> i don't think it's an investor issue and i think this is moving a bit slower if you looked historically when oil prices went to the 75, 80, 85, 90 range what they learned this go round is that we'll have more commodity volatility and the likelihood that it sticks around for a while i think is certainly there, and so you don't have to run out in a frenzy to pay up and jump into things you can kind of take your time and pick your partners, and i think that's kind of the process that you're in now we're seeing private equity sell to private companies and we're seeing small private company deals and the big ones are coming in the next few years >> that's interesting. it's running it a slower pace. >> what about microsoft activision if there's any area that we shouldn't expect to have political winds it should be

with the big tech mergers and now the eu says it can go forward. yeah it's interesting because when the ftc kind of sort of sued to block the deal and it was in an administrative court rather than going to a regular court, they were waiting on the eu and they got it out of the k and i understand why it did what it did, and i don't see how this n necessarily helps microsoft because unlike the u.s. antitrust situation microsoft doesn't have to prove or disprove its case in the uk. the antitrust regulators have to prove is that they did their job in terms of following procedure. not that their ultimate conclusion was the correct one or incorrect one. >> right >> for microsoft they'll have to prove that the uk regulators did something wrong by their own standards or maybe just cleave

off the uk business. >> where else should people be looking for targets if this is a sweet spot for private equity. >> it is across the board. although the place we've been seeing to me the most lately has been in health care and that's everything from pharma to devices and from other biotech and that seems to be one of the hottest spaces right now >> dan pickering, where in the energy space now that we're starting to see as you call them these mid-stream deals happen, who else does that potentially imply. >> i think the reality is any company under 10 or 15 billion in market cap feels the need to be bigger whether they're a mid-stream company et cetera, and so i look for sort of a smaller and mid-cap consolidation wave i think the bigger cap stuff is further out. last point on the new technologies and energy, i think that they have really been hurt and we're going to start to see some combinations there out of

sort of desperation or necessity as opposed to opportunism. >> great point i appreciate it and dan pickering, the dan ps on this merger monday. still ahead, president biden set to meet with congressional leaders tomorrow to further discuss a debt ceiling deal and the already tight time line is getting tighter. alec phillips tells us what he expects from that meeting and at to do with the marks in the meantime that's next. good luck. td ameritrade, this is anna. hi anna, this position is all over the place, help! hey professor, subscriptions are down but that's only an estimated 15% of their valuation. do you think the market is overreacting? how'd you know that? the company profile tool, in thinkorswim®. yes, i love you!! please ignore that. td ameritrade. award-winning customer service that has your back. what if buildings could tell you how they could be more efficient?

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...and charting a course to get there. sometimes the only thing standing between you and opportunity... ...is someone who can make the connection. at ice, we connect people to opportunity. welcome back to "the exchange." president biden is set to meet with congressional leaders tomorrow the meeting was postponed on friday and some saw it as a sign of progress being made behind the scenes he's staying optimistic and thinks an agreement is within reach. treasury secretary yellen still warning a default could come as early as june 1st and my next guest point out there's little legislative time to reach a deal before then. the house is in the recess, and can a deal each get done before the so-called xshg date. joining me now is alec philips and chief political economist at goldman sachs along with cnbc correspondent kayla tausche.

welcome to both of you give us a sense of the timeframe here do the vacations matter that much can they just barge through them or is it, you know, a very serious thing? >> well, i think that it depends on who you ask, kelly. the white house has been a fan that the president is the president wherever he goes, even when he takes this up to ten-day trip to asia that he will be working the phones and he'll be in touch with his staff and he'll be in touch with whatever it is in washington and republicans have been frustrated vocally and the house had been refused to meet with months and with quite a lot of material to sift through in terms of reaching a deal. as speaker of the house kevin mccarthy said he would feel better about the possibility of reaching a deal if there weren't negotiations and because it's where it is in may that he feels less so. >> anything that you would read into the comments from the president yesterday, kayla >> well, i think the president always wants to seem optimistec.

he has branded himself as a dealmaker, as someone who is willing to bridge the divide and to reach bipartisan agreements and certainly the white house has tried to approach this one no different and it's just that they did so at the 11th hour they are still negotiating for key policy buckets and the president signalled that he's opened to -- recipients of government programs and government aid program, but it is unclear whether that will be enough of moving the needle to actually be what republicans want and what would actually clinch a deal. >> true. kayla tausche. alec, let me ask if you can give us the real story. is there a rell al story does anybody know? what can happen in the next 48 hours here >> probably two things one is we will find out how serious these negotiations

actually are when the president meets with congressional leaders tomorrow rid now right now it sounds that it could go as well as anyone could have expected in the sense that a week ago, a little bit more than a week ago the white house was still maintaining the position that they would not negotiate on spending caps or other, you know, policy concessions as part of a debt limit increase and now a week later we're talking about how long spending caps would last and work requirements will be resolved and so i think that will be the first thing is to sort of see whether all of this negotiation over the last week has amounted to very much and then i think the other thing is we will probably get an update from secretary yellen on when the so-called x date actually is, and my guess is that they will keep it in june, maybe

explain that it is kind of more of a specific date i would imagine probably the week of june 5th is what they'll say, but that could also influence things to the extent that the date changes. >> it's in their interest to say that it's coming because they want a deal done it's her prerogative, right? it's her problem if a deal is not made so she'll want to put the most pressure on them and the markets aren't putting that much pressure on them and maybe july, maybe august and they're very placid, i guess, is the word >> i've been following the debt limit stuff, and i can't remember a time when the deadline was this uncertain, this close to the potential deadline meaning that, you know, right now it looks like could be as early as i'm not sure there's that much of a risk of june 1st and certainly early june, but i can also definitely see the scenario where it slips into

late july and there's only a few days in early june where they might not be able to make payments and they take in a whole bunch of tax money, june 15th and then they'll probably be okay for a while and it's a very unusual deadline. >> we've never had anything like this that i can remember before in any of the other big, debt limit battles. >> they say if we end up hitting it in july and august, no need to fret right now. i don't think anyone is waiting for the market to tell us, it's hard to figure out and i assume stocks will sell off 15% and we'll hit it tomorrow or something. >> i think my impression just in talking about this with a lot of people in the market is that we are ultimately, you know, not going to see big moves until we get within probably a few days of the deadline and the only way that changes is if something, you know, really blows up in the

near-term, but i think more likely, you know, we just see these negotiations go on and everybody assumes that they'll get a deal and it will be, you know, at the last minute in the last few days ahead of whatever the x date turns out to be that somebody says, the and so on and then the market really reacts >> let me ask you, you probably saw lauren's piece, can't president raise the debt limit, didn't feel that way during the obama agency but now feels that way. i mean f the base goes wait a minute the expert says you can raise it using the 14th amendment, why would you agree to these spending cuts and throw republicans a bone you can see those lines emerging is the support for the president doing it unilaterally going to undermine his ability to agree to concessions and come to a deal >> well, i think, you know, one way to read that is that it is

setting up theadministration t maybe drive a harder bargain than they would otherwise drive because it allows them to say, either you do the deal that we want, or we're going to take care of this unilaterally and you can try to stop us at the same time, though, i would say, you know, if you look at what secretary yellen has said about these options, it is not been that enthusiastic and my sense is that while it sounds good on paper or, you know, i'm not even sure it sounds good on paper -- >> right. >> i think there's a real question as to whether it would be a practical solution because, of course, somebody would challenge it, you know, one of his points it's not clear people actually have standing to challenge it, but ultimately somebody would challenge it and how do you auction treasury securities in the midst of legal proceedings over whether those treasury securities were actually issued under u.s. law

>> no. >> and it's difficult to do. >> it's a big platform, you know, it's -- it's unclear if we're trying to help or hurt the cause, but perhaps he would just say to be intellectually honest he thinks that is an option and we'll see if we get closer to that in the weeks to come. i'm most interested in how it influences the negotiations right now. thanks for your time we'll check back in soon. >> thanks. >> alec phillips before we go thing me ka cap tech stock has climbed, and its market cap is greater than the e w dn ussell 2000. thdoisow33 lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast,

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welcome back apple, that was our mystery chart. apple is worth more than the entire market cap of the entire russell 2000 that's the focus of today's tech check from deirdre bosa. >> it's another in a list of milestones apple was the first to reach a trillion in market cap, then $2 trillion, and its market cap bigger than almost any stock market in the world. a lot was made of it, and now bigger than the combined 2,000 small caps in the russell 2000 apple grows, as always, the valuation question arises again. is apple overpriced. we'll take a look at forward priced to earnings basis, revenue growth is expected to contract this year on the flip side you heard the

argument from the bulls to justify that premium and proven gross margins, rise of services and something discussed more and more these days, growth in apple's installed user base and that creates that ecosystem that is within apple that bulls love and point to. >> we got through all of tech earnings season. what's interesting, i saw the wall street journal covering, and i'm others too, the headset and it's got the battery pack, mega battery pack thing, saying is its because johnny ives isn't there anymore or the kind of product you have to get out there and experiment seems like it's for gamers >> that will have the bulls and bears divided. it could be a risk or the next revenue driver i did see a tweet from palmer that created oculus that was then purchased by facebook, now meta, and he said it's great i don't know if he's joking, but

coming from him, that's kind of important. the guy that created oculus is saying it's great. >> can you imagine if it's a hit and meta, they're like the intel and windows. apple hardware, meta doing its thing and who gets the last laugh. >> that's what apple does, right. patiently waits and creates something and comes into the market and doesn't need the first mover advantage. the iphone and my beloved rim and blackberry i saw someone the other day using a blackberry and got nostalgic. >> there's a netflix series out or something about it. everyone says check it out thank you for that we appreciate it deirdre bosa a programming note must mention and must watch, david faber will have a live interview with tesla ceo elon musk, 6:00 p.m. eastern after the company's annual meeting right here live on cnbc. that does it for us on "the exchange." next on "power lunch," the pandemic home improvement boom is winding down but the ceo of

trex is staying bullish. tyler is getting ready for that. i will join him on the other side of this break you got this. let's go. gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq,

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so we don't have to worry. so you never- no. never. join 17 million people and take control of your financial future to empower what's next. start today at empower.com good day welcome to "power lunch. alongside kelly evans who is just over there, i'm tyler mathisen coming up today, it is a merger monday several big deals happening today, is it a sign that corporate america is getting ready for an economic recovery down the road, buying low in hopes that values go higher? commercial real estate called the next shoe to drop we'll talk to a big cre investor about what he's seeing in office retail and residential we'll dive through it. hi, everybody. i'm over here checking on the markets where the dow turned negative again it was positive abouth