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tv   Fast Money Halftime Report  CNBC  April 9, 2021 12:00pm-1:00pm EDT

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julia, tons of people in l.a. working hard to get to this point. >> yes it has been great to be part of "squawk alley" over all of these years, and it has been so much fun, deidre, to be able to co-anchor the show over the past year of covid. i am really looking forward to what we have coming up, carl we have rick dara, we have others it will be great. >> we will see you all on monday let's get to "the half." >> all right carl, thank you so much. welcome to ""the halftime report". i'm scott wapner front and center this hour, the third inning that's where famed market watcher jeremy siegel says the boom in stocks is. it is a big call we will debate if he is right and what it means if he is joining me for the hour, shannon shikoski, jim lebenthal along with pete najarian and kevin
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o'leary is here as well. i will take you to the wall as i always do to start things off, show you where the trade currently is we do have a big jump today in inflation. so rates are up a little bit they're at 163, 164, no big deal, right? there's the dow, up 75 the s&p, nasdaq, everything is positive at this hour, but it is the big call from jeremy siegel. i want to show you the sound because a lot of people are talking about it here is where he thinks the market currently is. >> real assets is what you want in the economy that i foresee, and inflation. it isn't until the fed finally leans really hard, then you have to work. i mean we could have the market go up 30% before, or 40% before it goes down at 20% when he really has to do that. so we're not in the ninth inning here we are motmore like in the thirn of the boom. >> kevin o'leary, it is a big call by a guy who is bullish a
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lot of the time. the question is, is he right with his premise being, look, until the fed does anything to be, quote, unquote, hostile, the market is going up >> yeah. is he right? yes, but the real question is when is he right now, let's just use a very easy measure in terms of inflation. the handle on the ten year has to break through three got to be over 3% for it ever to become competitive in fixed income against hard assets and equities, and we're nowhere near there. i do agree, and i have been bullish along with him for the third and fourth inning of this game, and let's call it third and fourth quarter, we are way underestimating earnings in the s&p 500 in my opinion. i suggest that what is going to happen in the fourth quarter, and the market is trying to figure this out every day with all of the crosscurrents going on, inflation, no inflation, and everybody else saying tech is over and all of the crosscurrents. bottom line, i think we end up at the end of the year with gdp
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growth rates north of 8% and probably 15% higher in s&p earnings it will be a blow-out ending of the year, something we haven't seen since the 1950s why? well, thank you, fed thank you, president biden free money out of helicopters from everywhere. free money $1.9 trillion in free money and now another $1.5 trillion of free money keep it coming it doesn't get better than this. you will have to pay for it one day, but, hey, let's not spike the party yet. >> that's why pete siegel thinks what he does this was a week in which we heard the word goldilocks be mentioned once again, for all of the reasons that mr. wonderful just said and the reasons that jeremy siegel cited why he thinks we are in the third inning of this boom that you've got between now and at minimum the end of the year to think that stocks are going to go up before you have to worry is he right? >> well, i'm not so sure that i believe before you have to
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worry, but i certainly think that the overall theme right now, scott, when you really look at things is, look, we continue to throw trillions of dollars, as kevin says, free money continues to flow. as that flow is happening, we are also seeing the vaccines as they're rolling out and the acceleration of that and the reopen and all of that that goes into what we are seeing in the markets right now. i think that very healthy rotation from sector to sector to sector, and even the daily sort of rotation that we are seeing, one day it seems like it is the nasdaq that will lead us, the next day it is the dow, the next day we are seeing more from the s&p. it has just been a combination of a lot of very positive things i don't know that that can go on forever, but certainly saying it is maybe in the third or fourth inning makes a little bit of sense to me. i think the reality is look at the volatility of how low we have gotten. i mean we were not too terribly long ago trading in the 30s and 40s and here we are now in the teens. i think that gives people a little bit more comfort in terms of a lot of different ways,
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scott, because when they see that they realize, and everybody always calls it the fear index i don't agree with that as the monicker, but it is oftentimes called that. people are looking at that saying, hey, look, this is telling us something, and it is telling us we don't need to be afraid right now i don't necessarily subscribe to that, but i do think that people are feeling very, very comfortable as they're entering the markets and shifting around and being much more involved in the markets than ever before >> shannon, you know, maybe it is no more complicated than exactly what the professor was talking about. he said that he has never heard a fed chairman as dovish as jay powell was yesterday in that exclusive conversation that our own sara eisen had, and it was basically a reiteration of, a version of, we're not even thinking about, thinking about, thinking about raising rates any time soon, not worried about inflation, it is temporary, it is transitory. you have too many dislocations still within the economy, we are
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trying to vaccinate the world. until that happens to a great degree, there's no reason to worry about much at all, that the fed is not going to make a move because of all of those variables that are still in existence, and, therefore, you've got to buy stocks >> well, the fed set this up last year, scott although many of us were talking about this change in their approach from an expectation to outcome approach as it relates to inflation and employment, i think what we're seeing is that we're seeing that in practice, not only from the meeting minutes but in every single conversation that chairman powell has he is trying to reiterate that he believes that we are clearly in the midst of a very sharp k-shaped recovery. his view is that a great economy does not just benefit one side of the economy so, in setting up that new paradigm, those new expectations in the fourth quarter of last year, the fed has a ton of cover
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to see what they can do to potentially impact this and make this more of an even recovery across the board and not just a k-shaped recovery. i can't state how important that is every time that we get into these modes where we are expecting this temper tan draw, a la 2013, we should come back to the fact that the fed's mandate and the way they're looking at their mandate is different today than it was then another point i want to make, and pete talked about this, this volatility activity, whether you measure it through the vix or through volume, we are entering a period of relative calm over the last couple of days and one could say complacency. i think it is based on the fact we had these sharp increases in volatility in first quarter, and yet at the end of the quarter when we looked at the returns it really wasn't indicated in those. so i do think that there are going to be these bouts of volatility there will be these one-off examples of excess but with the fed at our back, and i think they will be regardless of what things like
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the ppi that we saw today look like, i think we need to kind of move forward and have that as our expectation. >> now, rob, i'm sure there's somebody, and maybe there are groups of people out there who are saying, well, what else is the professor going to say of course jeremy siegel is bullish because he is always bullish. so he is ignoring some of the risk, he is complacent like everybody else, he is complacent like what the vix is showing a lot of people are. but you know what? it is not just siegel. you look at bank of america flow show, the amount of money flowing into stocks is nearly unprecedented. i mean we are talking about things like the amount of money flowing over the last, you know, five weeks or so or five months is equal to like the last 12 years. there's your number. over the money flowing in over the past five months is more than over the past 12 years. that is inflow into global equity funds david cost in, goldman sachs, he is bullish he said we will still hit 4,300
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this year. wells fargo says there's a lot of optimism now about earnings, that expectations were so low and now they're higher, and that will be good for the market as well so it is not just the professor, the bulled-up professor. >> it is really everybody. but there is also on the other side of the ledger from a positioning standpoint, scott, a lot of skepticism, too a lot of bears pronouncing this is the top, we've come too far, too fast just look at twitter you can see all of these guys, they're typically not on this show, but too far, too fast, rate fears, covid fears, inflation fears. there's a lot of bearish sentiment out there, and yet there's the positioning indicating there's a ton of cash on the sidelines so what we've seen is a lot of people being drawn into markets from the sidelines, so i think the numbers that you just showed are just the beginning
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something that was particularl encouraging about this week's rally is it was achieved, even though industry, the best sector year-to-date, up 28%, was down 3.6% going into the show tech, which lagged the market year-to-date, actually led this year's rally so it is great to see a broadening out we see that vaccine penetration continues ahead of schedule, and the reason for commerce interrupting lockdowns diminishing is that each shot that somebody gets allows the economic reopening to overpowe all of these negatives and literally forces these investors from the sidelines and into the most attractive assets, which we still think are the cyclicals. there was a pause this week in cyclicals, but we think that ultimately they re-emerged their leadership but it doesn't mean you have to abandon the stocks that did well this week, which are the large
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cap growth stocks that are really almost bullet proof i laugh at the notion that they sell off when interest rates go up they don't need debt financing in most cases. these companies' balance sheets are bullet proof it is an interesting dynamic i think the pause in cyclicals is one that refreshes and investors will continue to be drawn from the sidelines >> so that brings me to the farmer, who has been driving around on his tractor, and he keeps seeing green chutes, right, jim because you are the one who has been -- >> yeah. >> you have been taking the cast y , the cash you have on the sidelines. you are representative of a lot of people. you accumulated some cash, you were concerned about a pull back we didn't get much of one. we did, bur we didn't. now we seem to be the pause that refreshes again and you put money back to work you have bought apple on the dip twice, you bought qualcomm and other things as well, so getting some of the money back into the
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market. >> yeah, and boeing and cisco. it is clear from my action and my words that i'm very bullish right now. i'm not just going to wipe away the accusations of complacency because i think there are excellent arguments against complacency. i think there's fundamental reasons. we talked so far today about aggregate demand picking up, whether it is fiscal stimulus or vaccine, that's fine you know what else will help, is supply chain issues. we have been in a chip shortage issue for the last several months that held back production you can look at gm and ford and how many plants they're idling think about when the chip shortages go away and they will, think about the plants going back online and think about inventories on dealers' lots that are roughly one-third they normally would be. here is the beautiful part that's not tomorrow. that's second half of this year. that's into 2022
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by the way, similar phenomenon on the texas weather situation and the electricity breakdown. fix that, that's going to be cap x that will be spent to fix that and make a more productive supply change because texas, look, it has everything, but think how plastics and petro chemicals were shut down in february the supply chain issues as though clear up over the next year, i think professor siegel is fundamentally right, that this extends well into 2022. so third inning, i'm right there with him >> okay. so, pete, you know, your brother told us about a fairly sizable options trade yesterday, betting on a rise in the vix people are writing about it today. i saw an article that references directly what we're talking about here you know, this one is a $40 million bet on a rise in volatility over the next few months, a bet that the vix is going to rise above 25, which would be a monster jump from where it is now, and go towards 40 by mid-july do you have any more color on
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that would you talk to us about that kind of a bet? >> yes, you know, what is interesting, scott, is yesterday when they initially put on that trade, it was pretty much put on all at once. the 140,000 of it at least was put on all at once, very early in the trading session with that buy. the rest of what filled in after that was a lot of chasing saying, you know what? we do think that maybe we have the chance over the next three months or so to see a pretty nice rise in the vix now, we haven't seen that. in the last month or so, if you go back a full month, yes, we were in the mid 20s, even towards 30, but it has been a well and it has been steadily selling off. at some point you might see something that will disrupt these markets, and i think that's what this trade is telling us we don't know exactly what it might be, but we think when we get a spike it will be pretty significant, because to get back up and over that, scott, you basically have to get over 27 on the vix before this even starts to make much money and a lot has
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to do with pricing i don't want to get into the complexity of that, but the vix is priced far differently than normal options in a regular equity or etf. so just keep that in mind as well but 200,000 of those overall, that is a monstrous trade. it was a huge trade yesterday, and it makes some sense because is it going to be something from the catalyst of earning season, is it going to be something outside of the united states we don't see right now but some sort of a conflict there's a lot of different things that could cause this, and it would make a lot of sense, and it is not when you look at the actual money being spent, yes, because of the size of the trade it is a huge, massive trade. you mentioned $40 million. but the reality is when you look at it, this is a $15 spread somebody is buying for approximately $2 so if this were to rise significantly and actually push towards that 40, then you've got yourself an unbelievable trade so we're going to have to obviously watch this they did buy out to the later part of july for this trade as well >> what is interesting, too,
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pete, is i'm looking at the vix on the screen as you are talking here, as our viewers are so vix, 17 you get -- and you are talking about what catalysts, you know, could be out there that could send the vix rocketing higher and maybe stocks lower you know, obviously interest rates have been much talked about of late, but even a move today in inflation, which was a big jump, is sort of a ho-hum. it is not like rates are really moving on that it is not like the vix is really moving on that this is perhaps just one person's point of view and perspective. everybody has got that. >> right. >> everybody has their own point of view and perspective. >> sure. >> maybe it is, the one thing that could be unnerving to people and that would be a significant move higher in interest rates by the mid-summer, let's say. >> and let's not drop off the idea. >> hey, scott -- >> that it could be a hedge. sorry to interrupt that it could be a hedge, scott. you are hedging. if you have monster positions on
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and you are really bullish, but the one thing that could cause that bullishness not to look so good a few months from now would be whatever that event might be. so this is a phenomenal way to hedge something, especially if it is s&p related. this is a great way to actually have some form of a hedge in place so in case there is some sort of disruption you at least have got this. >> i want to move the conversation along for a second, too. because if you are talking about risks and interest rate rising, you know, as being a risk, it certainly relates to what we've witnessed in the growth trade and the tech trade on that note i want to bring up a comment from jp morgan who, by the way, will be with us on monday rob, you can have this one he thinks the bulk of the momentum sell-off is done, and that would be significant. even if rates rise a little bit, if the bulk of the momentum sell-off is done and you think that that trade is going to come
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back, plus he believes value has more room to run, that would be the catalyst that people are looking for for a next leg, participation from both growth and value moving the market higher. >> i think some of that expectation, scott, was priced in to the market, to the market this week. i think the fed has said they're going to be incredibly supportive, although we know that markets kind of set rates and that the fed is not entirely in control of that when they're not doing any quantitative easing i do think that is massively supportive we kind of have a 2% expectation on the ten-year this year. i view that as long as the pace of the rise is measured, markets will desensitize to that being a front burner issue i think the other thing that's interesting, just to pivot back to the volatility statement, which is an important one, we have to remember the macro managers in many cases are completely willing to bleed
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premium to hedge their portfolios this could just be a big bet to hedge -- not even a bet. it is just a hedging exercise to say, hey, listen, this is our positioning and we're going to have something in place just in case that doesn't work, and we're okay ifwe spend a little premium to get that, as pete said so i think a lot of these things that we're worried about, whether it be inflation, whether it be interest rates, whether it be valuations, whether it be a covid variant, whether it be taxes, are things that are going to be overpowered because it really takes -- overpowered by the opening of the economy, because it really, really takes something significant in any one of those to kind of change this trajectory i just don't see it happening. >> right, right. hey, pete, you know, speaking of the growth trade -- >> yeah. >> -- and the pickup in stocks like facebook and alphabet, microsoft, these mega cap techs
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which have been hitting new all-time highs apple is one of the leaders of the week you bought more microsoft. think you trimmed a little bit since you bought more but you continue to place your bets towards big tech. >> yes, i absolutely do. i think it was jim that was talking about big tech and the possibilities going to the upside, and i still believe in it, scott. i mean it made sense to me they had a big, long pause, because it was really one of the areas where we saw the most growth early on then we started rotating around and suddenly it was the financials and the industrials and materials and all of the rest of it while we had that pause in these big, mega cap type names but when you look at the balance sheets, they're phenomenal when you look at the potential for growth they've already got in some of the areas they're moving toward where there's even more growth, i think there's a real reason to take a long look at some of the names and say once again, you know what? microsoft might be too cheap apple might be too cheap when you look at the pe, you say, well, looks like it is higher than normal
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oh, that's true, but there are so many other aspects of what we are seeing right now as we rotate away from certain other areas of the market, back into some of these names. i think that there's still tremendous growth possibilities. we've all been talking about google for a while now, and that's been an extraordinary mover. that's been the most extraordinary of late, but look at facebook. i know i keep bringing this up, but facebook has been on an absolute tear to the upside despite the fact that zuckerberg is having to go up, it seems like, on a pretty consistent basis in front of whomever to talk about all of the different areas where he's maybe failing, and yet you look at that company and all they do is continue to go up, it seems like every day. >> yes, okay speaking of going up, new highs today for the dow and the s&p. been nearly every day it feels like that you are setting a new high, a new record high for both the dow and the s&p. we will take a quick break coming up next morgan creek's chief investment officer mark yusko is with us haven't talked to him in a
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while. he is a little cautious on the market and he has a unique perspective on the archegos fall-out he knew bill wong, he was an early investor with him as well. we will talk with him next ♪ ♪ ♪ ♪ ♪ ♪ ♪♪ (car horn) ♪♪ turn today's dreams into tomorrow's trips... with millions of flexible booking options. all in one place. expedia.
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. ♪ welcome back
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i'm rahel solomon. here is your cnbc news update at this hour. kentucky governor ba sheer signed a partial ban on no-knock warrants that's a response to protests following last year's death of breonna taylor it wasn't as strong as many democrats wanted but it did attract support from republicans in the legislature at the trial of derek chauvin, a forensic pathologist testified george floyd died as a lack of oxygen as he was restrained lindsey thomas says based on the video we have seen floyd's death was a result of what the defendant did. as an astronaut and two russian cosmo knots rode a rocket for the trip to the international space station where they will conduct scientific experiments more than 500,000 high school students received an e-mail telling them they were accepted to a program that usually takes just 35 to 40 students a year. not everyone was disappointed
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when the school admitted it made a mistake because many recipients said they never applied or even knew the program existed. you're up to day scott, i'll send it back to you. >> all right, rahel. thank you so much, rahel solomon. let's welcome in our headliner, mark yusko, the ceo and cio of morgan creek capital. welcome. good to see you. it has been a while. >> thanks for having me on, scott. happy friday. >> same to you i hope you heard part of our conversation at the very least leading into you, and these comments that jeremy siegel of the wharton school made to us on the program yesterday that he thinks we are in the third inning of the boom, nothing to worry about until the fed makes its first move do you agree >> i probably wouldn't agree per se i do think that, look, liquidity talks and liquidity drives markets. so long as they keep getting these big stimulus bills passed
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there is potential for the nominal value of stocks to go up i think that's a dangerous game to play though i saw a great chart the other day, scott if you take the value of the s&p, divided by the fed balance sheet, it has been dead flat since 2008 if you divide the s&p by gold, it has been dead flat since 1996 so the nominal value keeps increasing, but we are losing purchasing power through the devaluation of our currency. >> so let me ask you, what's there to be mostly negative about? is it, do you have a problem with valuation because, you know, multiples have come in, earnings expectations continue to go up, rates are still incredibly low by historical standards, and jay powell has said repeatedly including on our network yesterday in his conversation with sara eisen that they're not doing anything any time soon, that any of the fears of inflation, at least in their mind, are overblown in the near
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term because they're transitory and temporary and they're going to go away. >> yeah, look, there are so many things to worry about in the sense of, you know, valuations are silly or stupid. i mean either one works, so whichever one you favor, go for it look, we've never been at these levels of overvaluation. we're 179% of fair value so, you know, that doesn't mean we can't get to 180% or 181% or 183% of fair value, but we have never seen this level. part of it is this idea of the fed model, that as long as interest rates are low, then valuations can be high well, that's kind of a silly idea when you think about it if we take it to its ill logical extreme, if interest rates were zero, are stocks worth infinity? right, it breaks down under %. there's a lot of data on that. the last piece of it is economic growth, right.
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economic growth is -- was surprisingly weak in the fourth quarter. there's everybody who is hoping that it will be better this year, but hope is not an investment strategy. if we look at the gap -- >> oh, it is going to be though. come on, you have got to admit, you've got to admit, i mean you're not casting doubt on the rebound in the economy, are you? i mean because by every single measure there's so much pent-up demand, mark, that expectations -- you could have massive, massive gdp numbers and this roaring '20s idea are you casting doubt on that? >> it is just the base effect, right. you are growing off a small number and people just don't want to do the math, right if you go down 30%, you don't have to be up 30% to get even, you got to be up, you know, closer to 50%. so that's the problem, is, yes, the headline numbers will be big, but we'restill going to b materially below where we were remember, we were averaging sub
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2% gdp growth over the last decade we are going to go right back to that level within the next 12 months and it is nothing to get excited about because we will be below trend by a pretty significant margin >> then you must be short the s&p. i mean how are you positioned then relative to your point of view >> we are -- you know, we run a hedged fund and we are hedged at this time, right we are only about 60% net long, but we find plenty of things to be excited about, plenty of things that have been on sale. we are very overweight energy, have been since fourth quarter last year when people were giving energy companies away we are overweight some of the other value names in materials we are short quite a lot in the most overvalued sectors of technology, but i spend a lot more time these days in other
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segments of the market as you know, we spend a lot of time in cryptocurrency and bitcoin, very overweight there. >> right. >> and we're very overweight in the private market so we do a lot in both venture capital and growth equity. >> but let me ask you this how can you be positioned towards energy and materials and other areas in the cyclical space, which i know you are, if you believe that we're not going to see the economic boom that people suggest we are? doesn't that fly in the face of your position? >> no, not at all. again, everything is about price relative to value. so i don't need a boom to have a recovery in oil price, or oil stocks, in the price of oil stocks, because they got so egregiously undervalued at the end of last year when everybody thought, you know, fossil fuels were going out of business look, even if all of us wanted an ev, it is going to be 30 years before we get rid of the
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internal combustion engine you know, oil companies, big oil companies were 2.5% of the s&p, the lowest in history. it was an easy time to be a buyer and they're the best performing sector in q1. my big thing, faang, diamondback energy crushed faang since the election so we don't need a boom for those things to do well. again, i think we're going to see robust growth here maybe in the first and second quarter, but that's just stimulus and it is fake. it is like a steroid shot. we are going to be back to sub 2% gdp growth. >> i don't understand how that's possible, though i'm sorry. look. >> you know i respect your opinion, of course, but how is the thought of getting our lives back fake and getting out there and spending money and traveling and doing all of the things that we want to do that we haven't been able to do for 13 to 14 months that's not fed
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the fed may have propped the market up, and that's undeniable, but the fed has had nothing to do with our lives, the fact we haven't been able to live now we are going to get out and we are going to spend money, and there's going to be a boom how is that fake >> again, i guess we'll see, right. we are still 45% below where we were two years ago in terms of air travel, in terms of passengers look, i went to my first family wedding this past saturday out in phoenix it was glorious, right we got together. we danced. we hugged. it was awesome i do believe you are going to see some of that, but that's just bringing forward or bringing back the deferred spending that was going to happen before. so, look, we went down 30-plus percent. we are going to rebound somewhere in a similar range, and we're going to end up with an output gap, with a gap in gdp
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from where we would have been if we stayed on trend it is incontrovertible it doesn't mean we're not going to see excitement, they call it spring break for adults over the next few months, and that will be great it will look great on the headlines, but profits are still barely back to where they were pre-covid. there are expectations that they might go higher. no evidence of that yet. so we'll see >> all right we are going to reconvene and have a conversation in, let's say, six months. let's see what has happened. you know, look, like i said, i respect your opinion and you manage money for a living and you have been placing your bets on your point of view, and i respect that let me move the conversation, if i may, to archegos because you know bill wong quite well. >> sure. >> can you tell us about that? >> i mean i can tell you the facts that i know and as i know them as you said, i have known bill
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hwang for a long time. we were one of the earliest investors in tiger asia when he spun out of tiger management and julian seeded him to put him in business we made a lot of money with tiger asia and we're grateful for that we took the money back from tiger asia before actually he ran into the troubles in hong kong and shut down, converted to a family office. we then have since had money with a couple of his proteges over the years today we only have capital with one of those spin-off firms. we took money back from the other two. look, bill is a great investor, full stop. he always has been did he get too close to the line the people in hong kong would say that he did. he paid a fine and, you know, that is what that is in his family office he used decent amounts of leverage through swap contracts the problem with leverage,
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right, it is wonderful on the way up, it can be a killer on the way down, and what you and i talked about two fridays ago was it appears to have caught up with him again, i have not spoken to bill since the events i have seen some correspondence between he and other people i know, but this is a devastating blow to a very long track record of success and a career that amassed at one point $20 billion, a lot more than most of us will see in our lifetimes >> yeah, there's no doubt about that you just said you haven't spoken with him have you tried to contact him and talk to him about what happened >> no. look, as you and i talked about kind of in real-time, you know, our relationship is with one of the proteges that spun out we have talked to them multiple times since then and kind of got their download, and, you know,
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as you have reported very effectively and very accurately, there were a number of large cap names where archegos was long and levered long, and when those started going down, some margin calls came in which forced additional selling you know, the problem of liquidations of big margin calls, you don't get to sell what you want to sell. you sell what you have to sell ultimately, if the leverage is too great, you know, the connect vanish that, it appears, is what happened >> how shocked were you when you heard about the amount of leverage you said, you used the word decent, but i think we can both agree that, you know, decent is an understatement in this case also, had you ever worried about a systemic issue relative to the size of the positions that he had in the unwind that had to take place >> yeah, never worried about
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systemic you know, here we are talking about it two weeks out and it was a blip, and it certainly has caused some pain i think credit suisse will suffer some meaningful, some losses, but i never worried about systemic i mean $20 billion, even levered five times, is a big amount of money, but it pales in comparison to the leverage the banks use. the banks range from 12 to sometimes 20, in some cases in europe 30 or 40 times leverage so when we are talking big leverage, there are a lot of people out there using much -- you know, fixed income traders use 100 times leverage sometimes with futures so lots of people trade much bigger leverage than bill was using, but, as we all know, we all have a mortgage, right that's four-to-one leverage, $4 of debt for a dollar of equity if the price of our home were to decline 20%, we would lose 100% of our equity. this wasn't that different at
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five times, but the problem is you don't need a 50% decline in stocks the wipe out your equity. you need about a 15% or 18%, so that's where he found himself on the wrong side of that trade >> i appreciate your candor on this and certainly your perspective and point of view on the market it is always good to get your opinion. i will follow up we will talk again soon. mark yusko, thank you for joining us today. >> thanks for having me, scott enjoy the weekend. >> all right you be well. thank you. boeing under pressure. you probably heard about this story. warning customers about a new problem with its 737 max jets. the fall-out and what investors do with that stock from here you will hear from one of them farmer jim, jim lebenthal, he owns it. he will tell you what to do next lease the 2021 nx 300 for $349 a month for 36 months. experience amazing at your lexus dealer. you can try to predict the future or you can create it. lease the 2021 nx 300 for $349 a month for 36 months. we're driving it. everywhere. we emit optimism, not exhaust.
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amazon in a blog post just issued a statement regarding the union election in alabama that went in their favor. this post notes that less than 60% of the employees at that facility voted to join the union. it goes on to say, quote, it is easy to predict the union will say that amazon won this election because we intimidated employees, but that's not true our employees heard far more anti-amazon messages from the union, policymakers and media outlets than they heard from us.
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amazon says, we hope that with the election now over there's an opportunity to move from talk to action across the country. it welcomes the opportunity to sit down and share ideas with policymakers but it is important to note amazon says the election is over the retail union would disagree. it is going to appeal the outcome and says in its own statement, quote, we will not let amazon's lies, deception and illegal activities going unchallenged meantime, there are duelling press conferences occurring right now we are monitoring, one run by amazon, another run by union organizers, hearing strong rhetoric from both sides we will continue to monitor and bring you any developments scott, the drama is far from over back to you. >> it certainly seems to be. that's deidre bosa straight ahead, pete has unusual activity plus, boeing, the fall-out there. if you own those shares, what to do next. we will tell you
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it's easy and affordable to get started. get self protection for $10 a month. welcome back boeing is the worst performing stock in the dow today there it is. it is only down 1.75%. nonetheless, more issues about the 737 max. jim, you own the stock i'm sure you are sick and tired of talking about the max. >> it is okay.
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>> every time you think you are past it, here we are again. >> yes, but actually there's been a lot of good news on the 737 so i'm not worried about this first off, the problem they say could affect backup problems, that's a circuitry problem if you are an engineer you look at it, you say it is a minor problem, it doesn't affect air worthiness, it is not a big fix. it doesn't bother me at all. as far as stock reaction, boeing is still in a shoot first, ask questions later con tebs people hear the slightest bad news, they sell it if you don't own it, i feel it is a good opportunity to get into it. if you do own it, there's nothing in the news today that should shake you from your thesis. >> kevin o'leary, for a guy who used to love boeing stock, you wouldn't touch this? is that right? >> i don't like the sector i think boeing trades in sympathy with airlines themselves i think the airline sector is one of the sectors that is broken the assumption on the opening trade is everything will go back
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to normal. the majority of profits for airline companies, business travel, i don't know of a single s&p or private company that isn't slashing or hacking the business travel because it is a great way to save money. the average ticket is $250, that means everybody is flying to disneyland and the airlines make no money doing that. i think this thing will fall apart and there will be a pretty negative q4 for airlines, and i think we need a couple to go bankrupt to reduce capacity because business is impaired 10% to 20% i think permanently. >> maybe from a business travel standpoint, certainly going to take a long time to come back. pete, we have your unusual activity we will do that next whoo, what a ride! i invested in invesco qqq a fund that invests in the innovators of the nasdaq 100 like you you don't have to be a deep learning engineer to help make the world a smarter place does this come in blue? become an agent of innovation with invesco qqq
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claim your seventy-five-dollar credit when you post your first job at let's go unusual activity, pete tell me us what you see today. >> we have two different names that are pushing against their r 52-weak highs. the first one in union pacific as it's pushing to the levels, the expectation is to break out of that and explode to the upside they are also buying options that are part of the earnings as well the earnings will be on april 22nd these are the april 30th ex expiring 225 calls they are going for about $3.30 stock at the time was trading around 2.21 and a quarter. stock is higher. the options might be a little hire as well i heart media. this isn't name we see a lot but we have seen it a couple different times.
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now we are seeing the may calls being bought they have earnings and it's pushing against the 52-week highs. they are buying the may 20 calls. they are only going for about 70 cents. i'm in both of these two names i like what we're seeing here. playing the upside on maybe a break out and maybe the catalyst is the earnings themselves >> okay. good stuff thank you for that we'll take a quick break we'll come back and do final trade, next. i'm 53, but in my mind i'm still 35. that's why i take oste bi-flex to keep me moving the way i was made to, it nourishes and strengthens my joints for the long term. osteo bi-flex, plus vitamin d for immune support. did you know that petco, osteois now a health andmin d wellness company? their groomers work wonders for my confidence.
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very excited and so are they they have some big guests coming as well. congrats to everybody associated with that program. we'll be awaiting that interview as well. looking forward to bank earnings too. they kick off next week. what are you expecting these stocks had a huge run year to date. they better put up some good numbers. >> i agree with you but i really think this comes down to an interest rate play this is why nobody wanted to own money center banks over the last couple of years. a number of us owned jpm because they had a will the of other areas for revenue. you have to think about loan provisioning with the improving economy we talked about all day, those will come down
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i anticipate some good in your opinions >> do you have a final trade for us today, too? >> i do. i'm going to go with martin marietta, mlm. this is long term play improvement of infrastructure but in texas they do a lot of business in texas and there's a will the of people moving there. >> okay. good stuff nice to see you. have a gad weekend mr. can you feel how about a final trade from you? >> i'm going to do riot. you want to a proxy on bitcoin and you don't want to own tainted blood from china, riot should trade with the price of bitcoin which i think will be o going up over time as a hedge against inflation. >> okay. peter teal have a good weekend.
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>> rob >> applied materials the stock up 20% i think it continues to run. >> okay. pete quickly and farmer jim, quick. >> abercrombie, scott. >> apple, scott. >> all right thank you. have great weekend andrew ross sorkin has the exchange, now. thank you. he here is what is ahead this afternoon. feeling hot? inflation numbers coming in higher than expected leading to a lot of questions about how hot the fed will let the economy robinhood traders jumping all in on


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