'BOND VIGILANTES': Expert says they're BACK

INDEX, YOU CAN SEE 42% GAIN IN PAYPAL UP 32%. LET'S GET RIGHT TO THE FLOOR SHOW PORTFOLIO MANAGER, I WANT TO PIGGYBACK TO THE EARNINGS NUMBERS IN A MOMENT OF GOT TO ASK YOU ABOUT THE ECONOMY AND BOND MARKET IN PARTICULAR. I HEARD ANALYSTS COME ON THE NETWORK AND SAY IF THE FED WON'T RAISE INTEREST RATES AND DEAL WITH INFLATION, THE BOND MARKET WILL DO IT FOR THEM. >> HAPPY FRIDAY, HAPPY SUMMERTIME. WE HAVE THE BOND VIGILANTES CERTAINLY OUT AND IF YOU WILL BE FISCALLY IRRESPONSIBLE, THE PEOPLE WHO WANT TO BUY OUR BONDS WILL REQUIRE HIGHER RATES FOR THAT RISK AND WE DO HAVE THIS OIL, MIDDLE EAST PROBLEM PUSHING ENERGY PRICES UP THAT PUSHES INFLATION OF SO INTEREST RATES ARE KIND OF DOING WHAT THEY SHOULD BE DOING SHORT-TERM AND THE MARKET HAS LOOKED THROUGH THAT AND BONDS ARE MORE CHALLENGED, BUT FROM THE EQUITY PERSPECTIVE, SOME OF THE BOND PROXIES STILL LOOK PRETTY GOOD EVEN IF INTEREST RATES MOVE UP AND USUALLY THEY ARE PRETTY CORRELATED BUT THEY HAVE BEEN SAFE HAVENS, PARTICULARLY THIS MONTH. >> ONE OF THE OFFSHOOTS AS WE WENT THROUGH THIS GDP YESTERDAY MORNING, ONE THING HE SAID IS THE REPORT HAD ITS OWN PRICE DATA WHAT YOU NEEDED TO LOOK UNDER THE HOOD. GROSS DOMESTIC PURCHASES PRICE INDEX SPIKED TO 5.7% FOR THE QUARTER AND IN LAYMAN'S TERMS, IT TELLS YOU WHAT AMERICANS ARE PAYING STUFF, IS THE MARKET LOOKING PAST THAT AT ITS PERIL RIGHT NOW? >> I THINK IT'S GOING TO BE A LITTLE MORE IMPORTANT. YOU JUST NEVER KNOW WHEN THINGS COME IMPORTANT EVEN THOUGH THEY ARE. CONSUMERS ARE FEELING MORERE INFLATION, INPUT COSTS FOR BUSINESSES AND MORE INFLATION YOU HEARD FROM APPLE AND EVENTUALLY IT BECOMES AN ISSUE IF IT STAYS FOR LONGER SO THIS INFLATION IS NOT TO BE RECKONED WITH AND IT DOESN'T APPEAR TO GO AWAY ANYTIME SOON. >> LET'S GET TO YOUR STOCKS BECAUSE YOU STILL SAY AMAZON IS TO CHEAP STILL, WHY IS THAT? >> I THINK PEOPLE HAVE BEEN -- THEY'VE ALWAYS UNDERESTIMATED THE RETAIL SIDE BUT IT'S A MASSIVE PART OF THE BUSINESS AND MARGINS GROW UP AND COSTS COME DOWN SO UNDERESTIMATED AND OBVIOUSLY IT WAS A BREAKOUT AND WE SAW HIM GOOGLE CLOUD, MICROSOFT AND NOW AWS, THE MARKET WAS WORRIED AND PUT THE STOCKS IN THE PENALTY BOX BECAUSE OF THIS, UP NEXT SPEND AND NO SITE INTO A GOOD ROI ON THAT SPEND, WE ARE NOW SEEING AS SOON AS CAPACITY BECOMES AVAILABLE, THEY PUT THE MONEY TO WORK AND GET PAID SO REVENUE HAS BEEN UP AND MARGINS EXPANDED SO WHEN I LOOK AT AMAZON, IT'S WONDERFUL LONG-TERM FOR THE LAST FIVE YEARS HAS BEEN ANEMIC AND THAT TENDS TO BE BECAUSE OF FUNDS, BUT I THINK PEOPLE REALIZE THESE ARE GOOD CAPITAL ALLOCATORS AND TODAY IS A BIG CATCH UP BECAUSE I THINK MONEY IS ROTATING BACK INTO THOSE NAMES, THEY CAN FEEL GOOD ABOUT THE ROI FROM THAT UP NEXT SPEND AND THAT'S OKAY. >> THE ROTATION IS BEEN HEALTHCARE AND FINANCIALS IN THE TECH NAMES, WE SHOULDN'T WORRY TOO MUCH ABOUT APPLE AND STOCK IS DOWN. IT'S GREAT TO HA