Companys products spans various sectors. Thats what makes it so interesting. The ceo will join us exclusively ahead, but we begin with todays market and bob pisani at the new york stock exchange. Bob . Hello, jon. Good to see you. We have been chopping around in a fairly narrow range and the trend is up and certainly since the pc report and the s p 500 and the trends been up here were trying to get to the 200day moving average and were at 5114 now, slowly, but surely. A lot of strength in boeing, thats great news. Apple. Caterpillars been strong. Goldman sachs has been strong and thats at a 52week high and a number of big movers nasdaq, the bigcap tech is mixed and lets take a look at the midcap tech stock and meta and alphabet is down 2 and amazon will close tomorrow and it is up fractionally here global industrials have been having a great little run in the last couple of days and thats good to see. Boeing, lets get out of this month and one of the worst month ever and boeing was near a twoyear low just a couple of days ago and its been trending upward recently . I mentioned caterpillar was 330 at the open on thursday. Remember the gdp report and the inflation concerns 330 . It hit 3. 50 today and thats a big move for caterpillar in a short period and freeportmcmoran was at the open, and near 52 this is one of the biggest copper and gold producers in the world. Both of those had been doing really well as commodities recently and some of the big dow industrials are doing well we had rubric and this morning we had word that viking cruise lines which has the big ipo is supposed to happen this wednesday and they have upsized the term of the ipo here theyll be selling 53 million shares, 21 to 25 and thats 44 million shares and the bottom line well raise 1. 2 billion with a single ipo and you saw rubrik got as high as 40 and trading down a little bit today, but bottom line here, jon, is were doing really well on the ipo business we have over 4 billion in the last four weeks and a couple of billion dollars coming in the pipeline in the next up kcouple weeks. Well see if it stays steady. More inflation and more growth and thats the latest according to the cnbc fed survey and were getting ready for another Interest Rate decision this week steve iesman has the details hi, steve. Jon, good afternoon the cnbc is showing forecasters after those numbers last week that bob was just talking about. They ratcheted up the outlook for the Second Quarter, the one were in now and for 2024 inflation. Weve seen these repeated growth upgrades and the weak one keeps coming in better than expected and this is the most substantial inflation boost to the album that weve had in more than a year and here are the numbers after a weaker than expected gdp report and it boosted the Second Quarter real growth real gdp to 2. 1 and thats inflation adjusted from 1. 4 and a decent upgrade. Transferring that, most of it into q2 and inflation is seeing the year up 1. 3 up from 2. 7 in the prior survey and that number in the forecast for core pce for the year with cpi running at 2. 6, still above the target range for the year and that assumes, by the way, a rough formula that cpi runs about half a point hotter than the pce usually does about half of the respondents say the recent run of higher inflation is just a blip half say its part of a longer term stall in inflation progress that will keep inflation stuck around three the fed doesnt act. Barry knapp thinks the federal government should act, too inflation is likely to run above tag until and unless there is a fiscal policy tightening unemployment forecast is seen rising steadily from currently 3. 8, to 4. 3 by next year wed be getting off cheap if we end there. 50 of respondents say the fed cannot hit the target of 2 without growth running below potential and the Unemployment Rate rising by half a point. How much the economy has to weaken, jon, for the fed to hit that target . Thats one of the pressing questions for the central bank right now. Steve, im a simple man i think in metaphor, right im not the senior economics reporter i think a high rate environment like this as being like the economys car is coasting, right . And if we were to give the car more gas eventually it slows down and its not slowing down that much yet, right so i mean, does Something Else need to happen with this car or is the coasting the slowing down from coasting going to be enough higher for longer to get us to where the fed says we need to go yeah. Let me confuse you, jon. I know youre a simple man and we all want to be like that, but heres the problem were not really sure what our ground speed is here its not like youre lifting off a rocket and you know exactly how much fuel you need to get and escape gravity here. Were not sure, relative to the speed of the car how fast were running. So therefore, we dont know how much brake to apply. I dont know if that makes sense, but heres the deal we seem to be running faster than we thought wed be running given the amount of breaks that have been applied to this point. For example, weve ratcheted up the funds rate to 5. 3, 5. 8 , but the economy is not slowing down as much as thought the Unemployment Rate is not rising that suggests that relative to the speed of the car or the speed that we intended were going a bit faster so more breaks would have to be applied or the same amount of breaking for a longer period of time i wish this were science as i like to say Monetary Policy is not rocket science, its harder we dont have full selfdriving coming on the economy any time soon. I dont think elon musk is working. Steve liesman, thank you. Ai for the fed. There you go. Well, our next guest says dont fear higher rates, you know . Embrace them that means the return to a more prosperous time. The bigger worry should be the macro conditions that would force the fed to cut joining me now for more is Chris Grisanti senior Portfolio Manager at Mai Capital Management chris, welcome so things are pretty good and thats why the feds doing what its doing or not doing what its not doing and you say thats fine. Why . I think its more than fine, jon. I think its necessary you dont want lower rates because lower rates dont happen by themselves. The fed isnt a santa claus is going to give lower rate as a gift theyll lower rates when things start to slow down i would much rather live with higher rates and a stronger economy. Look, every economy, every market has problems of one kind or another otherwise i would be out of a job as a strategist, but this problem which is inflations running a little hot and rates are a little high and thats an equity problem for the markets to have. Remember, earnings are reported for nominal dollars and the inflation will feed into the earnings and earnings should be okay this year jobs seem just fine right now. Who knows what will happen in the future and i get it that higher rates take time to slow the economy. They dont happen overnight, but look, its been almost 8 hun nights since the fed started to raise rates and the economys chugging along i think we should hang on tight and enjoy the ride and fear a rate cut chris, for an Equity Investor in this environment, so many stocks are so richly valued its hard to know what to buy so how do you decide right so valuation is a problem, jon i wouldnt go out and buy indiscriminately, but us value investors, we complain about the mag 7 and its gone up so much and unjustified and blah, blah, blah, and the flip side of the mag 7 is all of that capital flowing into the stocks and its had to come from somewhere, and i think theres a bunch of sectors and specific stocks that have been left behind. I particularly like the Health Care Sector right now. I think the slow are growth there compared to Technology Makes it unattractive, but those pe ratios have fallen so low that you can make a decent return even if the market gets more difficult in the six to 12 month ahead. So id look there and theres a couple of other stocks we can talk about, as well. Yeah. Lets talk about one of the others as well and thats meta i understand that just on valuation it looks cheap, but Mark Zuckerberg keeps spending all of this money first on the metaverse and now hes spending it on infrastructure and things like nvidia and hyperscaler chips. Is it really a value play if theyre spending that much on this growth future and we dont know how long it will take to pan out . Right look, its uncomfortable for me as a value guy to recommend a mag 7 stock, but lets look at the stats. So meta is the only mag 7 stock selling at less than a market multiple based on next years earnings and yeah. Its not a top line problem. Its a spending problem. This reminds me very much of amazon two or three years ago where the top line was doing just fine and they were opening warehouses and doing all of this stuff and the bottom line got cut. Thats not the case here meta is still going to grow the bottom line, simply not by as much and the top line is healthy and this is not a slowing economy and this is not a slowing economy. This is a Healthy Company thats investing for the future and we can get it at 17 times next years earnings so love it zuckerberg also has a history of saying hes going to spend a whole lot of money and then just spending a lot of money and not a whole lot and the stock gets the benefit. Its all expectations. Yes there have been some pockets of exuberance within health care because last year the glp won excitement and caused the air to come out of certain stocks oh, everybodys going to be skinny and pretty and wont need those things anymore turns out not so much. Where are the pockets of the largest opportunity relative to the risk, do you think i think theres a couple of largecap pharmas that are selling at singledigit pe ratios i also think United Health group is interesting because the medicare pricing went against them and all of the other companies and they fell precipitously, and they have a history over 20 or 30 years of managing around that kind of negativity they can do other things with such a Big Health Care company that adjusts for that loss of revenue from the medicare side so those are the kind of things that i take advantage of also in health care, again, the capital has been sucked toward the weight loss drugs to the disadvantage of other things that might now look quite attractive. How are you treating sectors like industrials and materials with an overall global macro slowdown were seeing demand problems there that have been hitting new stocks this earnings season. I wonder if thats creating opportunities or if theres a broader reason to stay away from the stocks in your mind. Well, you may never invite me back, jon, but ive been on the show before saying i really like lithium. The shares have dropped by 70 and thats because u. S. Investors see the problems evs are having in the United States that are currently in a demand low, but europe and china are both selling evs like hot cakes. Its a global commodity. Lithium was overproduced and folks stockpiled it because they couldnt get enough and now were in a one to two year recycling and i think thats an opportunity. Again, i wouldnt bmaterials willynilly. You mentioned hot cakes, lets talk chocolate hersheys, how does that affect a player like that and the opportunities you see. I think its creating a great opportunity, and everything thats bad is actually good. So at hersheys, the stocks down 30 because its biggest cost of goods sold is cocoa. So cocoa prices as youve reported have quadrupled in the last two years and theyve doubled in the last two months so thats terrible for hersheys. The stock is naturally down. Also the multiple is down because nobody wants to own a company that will have this big headwind, but if you think a year or two ahead, cocoa prices dropped. Hersheys earnings explode because the margins get bigger and the multiple that increases. Youve got this leverage that can make hersheys a stock that can go up 50 or 60 over two or three years. Thats the kind of stock that can still work in a bad market that us value guys really like maybe like the mini pandemic effect chris, good to have you. Good to see you. If its up to me well have you back. Thats great. Ageold debate of renting versus owning is starting to change in a big way thanks to soaring Mortgage Rates our diana olick has that story diana . Jon, the rent versus own math used to play out different city to city. Home ownership has become so expensive that rennting a home s cheaper than buying one in all metropolitan markets and thats from bankrate which compared monthly mortgage payments to current rents. The monthly mortgage payment for a medianpriced home for 112,000 was 2,703 as of february of this year and that includes property taxes and insurance. So compare that to the National Monthly rent of 1,979 which includes renters insurance. Thats a 37 gap between the two, but in 21 markets that gap is actually 50 or more. Those markets include san francisco, seattle, salt lake city, austin, denver and dallas. Cities with the smallest gaps, although still more expensive to own, include detroit, pittsburgh, philadelphia, cleveland, st. Louis and tampa these numbers are as of february when rates were slightly lower than they are today. Rents are easing despite rising demand because theres so much new rental supply coming on the market, multifamily starts have dropped sharply. Once that supply does get eaten up, rents could start to rise again and jon, one more note, even though its more expensive to own you are building equity when you do own a home because ho house prices go up for houses. What is this doing to the multifamily investor market because i guess on one side tenants are more likely to stick around if theyre not moving up and its hard to buy something new unless youre paying cash because capital is at a premium. Yeah, i mean, look, the oversupply in the rental market with the big reits and were talking about class a multifamily apartments are still doing quite well, but theyre strong lower prices a little bit or give concessions on that first month of rent. So the multifamily market is still very strong again because we have this large demand from renters, but again, once that rental supply does get eaten up, you are going to see those rents start to pop back up again so i dont think investors in multifamily have anything to worry about. Diana olick, thank you. Coming up, shares of tesla sharply higher today after the company cleared a key and longawaited hurdle. Shares up there 15 and how important it is for the company and the stock here three more names on deck to report including this one. Its already up 85 in one year, but thats not stopping our trader from buying it. He says let your winners run hell join us ahead in Earnings Exchange were back in two. This is the exchange on cnbc your shipping manager left to find themself. leaving you lost. You need to hire. I need indeed. Indeed you do. Indeed instant match instantly delivers quality candidates matching your job description. Visit indeed. Com hire what took you so long . Im sorry, there was a long line at the thai place. You get the sauce i like . Of course youre the man i wish. The future isnt scary. Not investing in it is. Nasdaq100 innovators. One etf. Before investing, carefully read and consider Fund Investment objectives, risks, charges, expenses and more in prospectus at invesco. Com and theyre all coming . Investment objectives, rithose who are stillses with us, yes. Grandpa whats this . Your wings. Light em up gentlemen, its a beautiful. Day to fly. Welcome back to the exchange. The company passed a major milestone in china chinese regulators are removing restrictions on the ev makers advanced Driver Assistance Technology after passing the countrys Data Security requirements as part of that deal, chinas baidu will prevent mapping for tesla. Those shares also higher on the news and we should note this news coming on the heels of elon musks surprise trip to china where he met with the chinese premier in beiging on sunday for more on how significant this is to tesla and the stock going forward, i am joined by the lead Equity Analyst at rbc autos at rbc capital. I get conceptually why this is a big deal the part i dont get yet, maybe you can help me is how relevant is the existing u. S. Data in training for chinese for selfdriving or regionally is this completely straight training because i imagine, you get training in des moines is not going to go ahead in new york city and we drive different places in this world yes and no. So what weve learned from fsd in the u. S. Is the highway driving is as good as its going to get its amazing the difficult part is the urban environments and what we noticed from urban environments in china is that they actually are pretty similar to urban environments in the United States, and the other thing i would note is remember the chinese, the Central Government authority that wants this to happen, that wants to have level 2 and potentially more robe o taxi, et cetera. There is more chance that well get to faster autonomy than in the u. S. In rural areas and highways are maybe somewhat different that part is not the difficult part its really the urban environments and the dense urban environments in china are not as different as what we have in the u. S. Looking out for investors, is there a kind of tiktok risk here for tesla . Tesla ares driving around with cameras on them, sensors and looking at whos going where and how people drive and the argument could be made from the chinese governments side and thats why it took this long to get this kind of approval, but boy, that spy material if its all getting sent to the u. S. Could this end up being a bargaining chip being turned on and off in the period of u. S. China tensions or is there enough benefit, social societal benefit that china is getting, and theyre not going to want to do that. Yeah. This has been going on for a long time where they didnt allow the data to go back to the u. S. For the all g al go rhythmc learning its tieffive times safer, not five times safer theyre looking for the greatest good to society and its saving lives. Its definitely huge utility that it does, so i think its really them looking at whats the best thing