Skip to main content

tv   Closing Bell  CNBC  April 22, 2021 3:00pm-5:00pm EDT

3:00 pm
the nasdaq now, which was sort of an outperformer in this session. now it's caught up anything that's done well this year, technology, even some materials, some financials, that's where the selling pressure is going to be. >> crypto. >> even bitcoin. >> if it's been up, people sell it now become this comes we'll see what plays out, though thanks, everybody for tuning in to "power lunch" today. "closing bell" starts right now. >> welcome to "closing bell," i'm wilfred frost along with sara eisen today stocks starting the day in a tight range, but taking a sharp turn lower as you can see intraday, just a couple of hours ago. some tax-related headlines out of washington, the major average is in the red as we head into the final hour of trade. let's take a look at what's driving action stocks plummeted after that afternoon report said president biden is considering to hike the capital gains tax to as high as 43.4%. we'll talk more much about that in a moment shares of at&t getting a nice bump after
3:01 pm
beating an eps and revenue and americans and southwest and alaska air all came in above estimates. data continues to come in strong, weekly jobless claims once again better than expected, showing strength in the labor market recovery. 59 minutes left to go in a choppy session, the dow off 260, sarah. >> ahead on today's show, is a sri ta will join us to discuss tax headlines, plus a closer look at corporate esg plays on this earth day more earnings are on the way after the bell, including intel, mattel, snap we'll bring you the numbers, the analysts reactions on a very busy afternoon of earnings season let's get to the selloff the capital gains tax report that shocked the market. ylan mui with a look at what we know right now about it. jimmy posterior cue kas from the american enterprise institute, and ed mills, and mike santoli of course looking at the market
3:02 pm
reaction ylan, set the stage for us how likely is this to happen >> sarah, bloomberg reported that the white house is looking to raise the top individual tax rate to 39.6% and then tax capital gains as ordinary income for wealthy households now, that part does track with what we've reported in the past, and what biden has said on the campaign trail what appears to have investors on edge, though is bloomberg reporting that a 3.8% surcharge on investment income would remain in place resulting on a tax rate on capital gains of 43.4%. as far as i can tell, biden was never really directly asked about this on the campaign trail and models of biden's tax plan have sometimes included this surcharge and sometimes have not. this tax was put in place to help pay for the affordable care act, which biden helped pass into law as vice president, so it would have been really surprising if he got rid of it it's also worth noting that president trump kept this tax in place even amid the 2017 texas
3:03 pm
cuts white house spokeswoman jen psaki was asked about the gains during her press briefing. she said only that the president is committed to not raising taxes on anyone making over $400,000 more details will be revealed in the state of the union address next week. >> thanks so much. presumably not raising taxes for people earning less than $400,000, only for those earning more than that amount. joining us now, jimmy from the american enterprise institute and ed mills from raymond james. ed, clearly this has shocked the market and it's some surprising numbers and headlines in that, but to what extent as ylan was saying has a lot of this been leaking out, reported and therefore not as much of a surprise as the intraday s&p 500 chart might suggest? >> yeah, well, i'm shocked that it's shock this is exactly what biden had ran on he has been saying for weeks
3:04 pm
there's going to be a social infrastructure bill coming that is going to include increase in taxes on the top income households the 1 million mark is there. i do think this is a high water mark it would have been more shocking if this was not going to be included in the plan and to ylan's point, president biden was critical in getting the aca passed, obamacare, and so for not including those taxes, that would have been the surprise so this is the high water mark we're going to negotiate from here we probably have some compromise, but anyone who's shocked by this has not been paying attention to exactly what biden has said he's going to do and what he has been doing since he's been inaugurated. >> jimmy, does a capital gains tax above 40% all things considered shock you >> if this is -- if that's the final number, yeah, it does shock me that is an historically high
3:05 pm
number when silicon valley really became silicon valley in the '80s it was 28%. and listen, it's not that 4% number that i think is hurting the market it's that you have plenty of big bank lobbyists and sort of other sort of tax lobbyists who have been telling banks that the number is going to be 28%. yes, biden's talking about raising it to 40% during his campaign, but i think the market expectation is for 28% and now if they think it's actually going to be 40% plus another 4%, yeah, that's pretty shocking, and that would explain a big market selloff >> can it get done because if it is so shockingly high, jimmy, presumably senator manchin would have to sign off so that they can pass it under reconciliation how likely is that >> i mean, the argument against that is pretty obvious, that one is at an historically high rate.
3:06 pm
then when you take this rate and combine it to an increasingly corporate income tax rate, you have an integrated tax rate that very well may be the highest in the world. i think the fact that people are already backing off that 28% corporate tax rate is a good sign it's not going to end up being over 40% that number is like liberal progressive fan fiction. i just don't think that's what we're going to get at the end. >> and ultimately, is it worth focusing on these types of numbers trying to get them as high as this, or should there be other aspects to it as we often talk about, the step up basis on capital gains and other potential loopholes to close rather than pushing for such a high number? >> yeah, so i think what i'm looking at here is one of the first lessons i learned in washington, d.c., is never negotiate with yourself, and so jimmy might be right we might end up at 28% we might have changes to the salt tax we might have other parts of a tax code that were eliminated in
3:07 pm
2017 that come back in this is really not at all baked in to kind of, you know, as a final deal this is the start of the conversation what democrats to see is that when they are proposing increasing taxes on the wealthiest, especially those who have annual income above $1 million, that's popular kind of in the polls, so they're of course going to try to deal with this what is not discussed is a secret reason, i think, why they are trying to match capital gains dividends at ordinary income is the issue of carried interest that's been a thing that democrats have tried to do for a long time. we are not seeing a proposal to change carried interest, but if you do change all income coming into the household at an ordinary statutory rate of 39.6, you've dealt with the capital gains issues in carried interest as well, i think that's part of the reason democrats will push for this harder than maybe has
3:08 pm
been appreciated >> this thing's a money loser -- can actually lose us revenue if everybody cares. >> what do you mean? >> well, listen, you know, the joint command taxation, their analysis shows that a rate, the maximizing rate is 28% so listen, if you want to take it up to 40 or 44% for some -- for egalitarian reasons, that's fine, but if the goal here is to raise money for the government, that rate's probably a money lo loser. >> i think also there's a question about how untargeted it seems. i get that the wealthy is defined as anyone who makes over a million dollars. there's a big difference from people who make over a million from people who make 5 million, 10 million, 20 million is that something on the table up for discussion? >> i don't know. trying to get sort of in the
3:09 pm
heads of democrats, which is that billionaires are like policy mistakes, i'm not sure if they view millionaires as policy mistakes, but they view that we've had inequality run rampant in this country. at the heart of all those proposals to do something about it has been an equalization of this rate. i get why biden is doing it, and i also get why a will lot of pe on wall street are shocked i just think at the end of the day, that doesn't happen i think that rate's for sure going to go up. >> jimmy, just quickly one thing that i bet was in sarah's mind in following up on that question is what about the teslas of this world and amazons of this world, i.e. bezos and musk who haven't really paid themselves an income, but they have earned a fantastic amount not through their 401(k) type savings in capital gains, not in income and is this sort of aimed at trying to capture some of that in an income tax rate type level? >> well, i thought the actual
3:10 pm
plan eventually to do that was through some sort of -- some sort of wealth tax listen, the idea of raising taxes on anybody other than the real super rich is very difficult. i'm sure you've been talking about, you know, getting rid of that salt cap. it shows how difficult it is, and there are plenty of people who may be low, you know, millionaires who really consider themselves part of the middle class. they think they have nothing to do with jeff bezos. >> yeah, i think sara's right. >> agree. >> i think there is a very high chance this gets negotiated up or changed, but this is a starting position. >> got it. good to know gentlemen, thank you for joining us jimmy p., ed mills, the right pair on news like this let's get straight to mike santoli who's been taking a closer look at the market and the selling pressure coming from these headlines, mike. >> yeah, sara, the context for this headline hitting probably matters a fair bit everybody thought the market yesterday was resilient,
3:11 pm
volatility indicators were collapsing intraday, and then you had this headline that was a trigger for the kind of trading algorithms and also a little bit of a loud noise that scatters the sparrows a little bit. anybody who's skittish and looking to sell, they did it we're still in this trend. nothing much has changed right here, although intraday at the lows, we did kind of sort of come out of this very tight range for a while. look at the week to date s&p 500, just to put today's intraday move in a little bit of perspective. so there you go right off, and where do we find a little bit of support above 4125 that was also the lows from earlier in the week. if you go back ten days, it's roughly where there were the lows so far people have kind of widened out the scales tactically speaking. i don't think this is very much a considered response of all the policy implications ask the likelihood of this tax rate, what it's going to mean down the road for the sellers it's just about, hey, we haven't really been focused on potential hazards out there. we've been focused on the upside that's why it sort of disturbed the picture.
3:12 pm
finally, valuations in theory, higher cap gains trades could compress valuations in the market this is a good tracker of the index going up right in line with forward earnings estimates. this is from credit suisse, up the exact same percentage as from last swjune which has kept the forward pe multiple exactly static at a high level above 22 but it has not been in the last several months has not been about multiple expansion across the board, guys. >> just for those, mike, who are saying the markets shouldn't be shocked by this. investors should have been paying attention to the campaign trail, you know, they were surf pri -- surprised a bit by president trump as well who totally campaigned on the trade threats and terrorists and going after china, and then he came in as president and actually did it. so sometimes not just what you campaign on, it doesn't end up happening, and especially with the biden administration, they just spent the past few months telling us how horrible the economy has been hurting ailing
3:13 pm
and suffering and depressed, which is why they passed $2 trillion in stimulus. i'm not sure the market was prepared for all of these tax hikes to come. >> again, it's the market field position that does matter and determines the magnitude of a response i see a lot of parallels with the initial salvos of the trump trade war. it happened in early 2018 after the market had an amazing one-year rally after positioning and sentiment had gotten a little bit extended, arguably right now you have conditions that somewhat match january of 2018, and yes, even though he's -- trump was mostly about on the campaign trail, about being aggressive on the trade front, people didn't necessarily filter it into being an immediate risk, thought it was just rhetoric. and then, by the way, it was easily absorbed, relatively easily absorbed by the economy every time you got a headline about it that seemed like it was getting worse, it was an excuse for the market to come in a little bit so maybe we have a similar dynamic unfolding here >> mike, thank you
3:14 pm
coming up, we will stay all over the market moves in this final hour of trade. plus, alaska airlines has a brand new ceo and he's taking over at an inflection point for the industry as travel does start to pick up here after the pandemic, he will join us next to discuss today's earnings and his plan for the company you're watching "closing bell" on cnbc. with a bang, energy and change came to every part of our universe. seismic or small, it continues. change is all around us. shaped by technology and human ingenuity, we can make it work for you and your business.
3:15 pm
did you know that petco, is now a health and wellness company? their groomers work wonders for my confidence. i trust their vets, and i'm known to have trust issues. they deliver high quality food the same day. i was outside digging, what'd i miss? just everything regarding our physical, social, and mental health. exciting. i'm gonna take a spin around the room. great idea. ♪ ♪ petco. the health and wellness company. esg is responsible investing. who's responsible for building esg into your investments? at pgim, the pursuit is on for outperformance. as active investors, to outdeliver with customized strategies, integrating esg best practices into our investment decisions. as asset managers and fiduciaries, to outserve, with our commitment to better esg outcomes. join the pursuit of outperformance at pgim. the investment management business of prudential.
3:16 pm
want to save hundreds on your wireless bill? with xfinity mobile, you can. how about saving hundreds on the new samsung galaxy s21 ultra 5g? you can do that too. all on the most reliable network? sure thing!
3:17 pm
and with fast, nationwide 5g included - at no extra cost? we've got you covered. so join the carrier rated #1 in customer satisfaction... ...and learn how much you can save at . 43 minutes left of trading, all sectors in the s&p are now red. shares of credit suisse are lower after the company reported earnings and announced new details surrounding the ar cay goes margin call episode wilfred, what did we find out today? how much uglier can it get for credit suisse sm. >> still a little bit. the shares closed down on s swiss trade. they're down 30% since the start of march after the company reported earnings and 4.7 billion due to the archegos blowup, they also
3:18 pm
announced they'd be raising nearly 2 billion worth of fresh capital. what i think is interesting is how this result compares to morgan stanley's last week their loss was less than 1/5 of the size, 911 million nobody has left morgan stanley, while shares did dip last friday, they've kind of recovered again this week whereas at credit suisse, the head of the investment bank and the head of risk have left, and cnbc's geoff cutmore asked the kr ceo if he's thought or was thinking about resigning. >> look, this is the time for action, for remediation, and to take the company to the next level. this is the time for solutions. >> he's only been ceo for a little over one year perhaps that protects him, and credit suisse has an incoming new chairman in forder lloyd's bank ceo he also claimed to geoff, quote, we do not have a risk culture program. this bank has strong risk dna,
3:19 pm
end quote. the other big difference for morgan stanley is james gorman recommitted to prime brokerage whereas gotstein said we're reducing exposure in that business finally, here he is addressing why their losses were so much bigger than other brokers. >> i'm not going to comment on other brokers' behavior, but we did analyze the situation at the time we did discuss with some other prime brokers. we decided to do this in an orderly fashion over the last few weeks. we would not have had the materially dissimilar outcomes if he had sold all our shares on that famous friday >> now, he did imply, sara in that interview that their total exposure was about 20 billion, their losses over 5 billion, so i'm not sure why their losses were so big, but based on my reporting, morgan stanley's exposure was higher, their losses about a fifth of the size he seemed to say it wasn't
3:20 pm
because they didn't get out quick enough maybe that was a factor. >> it does raise a lot of questions about the risk management up next on the show, the ceo of alaska airlines on the outlook for travel demand and when it could return to prepandemic levels and as we head to break, check out some of today's topp searche tickers on at&t's up there, 3.6% gain it's an earnings winner today. more subscribers to hbo and wireless, and coin base makes a new post ipo low below $300. we'll be right back.
3:21 pm
at calvert we know responsible investing is hard. if you're concerned about the environment and climate change, how do you find companies that are driving the right outcomes? if you care about economic equality and social justice, which firms are addressing it in their workplaces
3:22 pm
and their communities? for nearly 40 years, calvert has delivered competitive returns by investing in companies making a difference because we see value in doing good. for more information, visit new projects means new project managers. fyou need to hire.on, i need indeed. indeed you do. the moment you sponsor a job on indeed you get a short list of quality candidates from our resume database. claim your seventy five dollar credit, when you post your first job at
3:23 pm
down more than 1% again on the dow, 350 points or so the low of the session it was over 400 at about 2:00 p.m., but you can see just the last 20 minutes or so adding to the losses once again all three of the major averages down a percent southwest, american, and alaska air all reports first quarter results today. as a whole, the group expects ongoing recovery in demand and revenue. the sector up more than 140% so far this year, sorry, over the last year. alaska air announcing the new ceo in the last quarter, ben minicucci, and he joins us now in an exclusive interview with our phil lebeau. over to you. >> thank you for joining us today from alaska's headquarters out in seattle let's talk about the first quarter. smaller than expected loss, you swung to cash flow positive in march, which sets the stage for the second quarter and the rest of this year two questions, what's your outlook, and when do you get
3:24 pm
back to break even >> phil, thank you, and great to be here with you well, i mean, we're emerging q1 in a strong position, bookings are looking strong in the second and third quarter. so what we said on our earnings call today is that q2 is looking to close to break even, which we're really excited about, and q3 is looking profitable a lot to be optimistic about in this recovery. >> yesterday you guys announced that you're targeting zero carbon emissions by 2040, sustainable aviation fuel will be part of that, but also the possibility of electric aircraft, maybe on short haul or regional flights realistically, do you expect to see ev tolls to be part of the alaska network let's say within the next ten years >> so, yeah, we're really excited about our climate goals that we're committing to 2040 is a tough goal to get to net zero carbon emissions. we have a five point plan. sax is a big one, fleet renewal,
3:25 pm
efficiency, you know, within the company, and one of them is, you know, emerging technology. now, if you look at what happened with cars in the last 10 or 15 years, i think the same is happening in the aircraft world. you know, i'm an engineer. i geek out on stuff like this. i read a lot i think there's some promising technology there's a lot of great companies. there's a lot of r&d being poured into this if you ask me in ten years, are we going to see something in the aviation world with hybrid electric airplanes, i would say yes. now, how big those passenger aircraft are going to be, i don't know yet, but i think there's a lot of interest and we're looking at it very closely. >> ben, we're getting pushed because the market selloff today. one last question for you, you have the new agreement with american airlines. how much does that make a difference in terms of you going to alaska customers and saying, look, we could open up a much broader network with american as our partner as opposed to previously >> no, it's a huge benefit to our customers, phil. i mean, if you look at alaska's
3:26 pm
strong domestic network on the west coast, now we're coupling that with americans domestic network across the entire country, and when you couple that with one world, we're giving customers just access not only in our country but across the world. so a thousand destinations or 150 countries, seamless travel, elite reciprocity across these airlines it's really a huge benefit i think it will unlock accretive revenues for us in the next couple of years. >> ben minicucci, the ceo of alaska airlines. thank you, ben, for joining us today from the company's headquarters in seattle. sara, i'll send it back to you the key thing to focus on with these airlines, they're all talking about potential break even by the end of the second quarter or early third quarter >> that will be a key milestone. phil lebeau, thank you very much alaska's down 2.5%, strong run up into today. still to come, putting the green back in green back
3:27 pm
savita subrmanian looking at environmental corporate policy, she'll join us to discuss. later, the stock market has pooled off significantly so far this quarter we've got an interview with two men behind one of the rare new deals. a bid to buy ticket master rival vivid seats and take it public. here's a check on bonds for you, yields are a bit lower with the ten-year hovering around 155. there was a bid for bonds with these headlines that the biden administration is looking at doubling capital gains taxes for people who earn over a million dollars. we'll be right back.
3:28 pm
that building you're trying to sell, - you should ten-x it. - ten-x it? ten-x is the world's largest online commercial real estate exchange. you can close with more certainty. and twice as fast. if i could, i'd ten-x everything. like a coffee run... or fedora shopping. talk to your broker. ten-x does the same thing, - but with buildings. - so no more waiting. sfx: ding! see how easy...? don't just sell it. ten-x it. keeping your oysters business growing has you swamped. you need to hire.
3:29 pm
i need indeed indeed you do. the moment you sponsor a job on indeed you get a shortlist of quality candidates from a resume data base claim your seventy-five-dollar credit when you post your first job at
3:30 pm
welcome back, 29 minutes left of trading, dow's down around 340, 350 points the session low is down 420. here's a check on the biggest losers in the dow. walgreen's, jpmorgan chase and intel. intel reports results after the bell today it's down 2% biggest drags on the dow, home depot, goldman sachs, microsoft. we are tracking for the worst week for the dow since february 26th, which also speaks to how strong the market has been coming off of four straight up
3:31 pm
weeks. >> yeah, big intraday turn around today time for a cnbc news update. rahel solomon has it for us. >> hello, everyone, in a 94-1 vote the senate has passed legislation directing the justice department to expedite a review of covid hate crimes targeting asian-americans. republican josh hawley of missouri was the lone dissenter. an emotional funeral for daunte wright, the 20-year-old black man shot to death by a police officer during a traffic stop in minnesota 11 days ago. his mother told mourners, quote, the roles should be reversed my son should be burying me. at a meeting of japan's climate change task force, the country's prime minister set a new goal for greenhouse gas emissions. he wants a 46% reduction by 2030 up from the previous goal of a 26% cut. and tonight on the news with shepard smith, why some environmental groups are not satisfied with president biden's new goal for the u.s. to cut greenhouse gases in half. and on this earth day, a
3:32 pm
sure sign of spring, 3 million tulips are blossoming in central japan. the annual event features around 300 varieties of the flower. last year was canceled due to the pandemic, but this year tickets are being used to prevent crowding it's nice to see that something looks like spring. back here in new york, it certainly doesn't feel like it >> it's cold it's too cold. >> very cold. >> rahel thank you. stocks turning sharply lower on reports that president biden is planning to raise the capital gains tax for high earnest up next we'll break it down also talk about some of her favorite esg plays on this earth day. "closing bell" will be right "closing bell" will be right back [music: “you're the best” by joe esposito]
3:33 pm
[triumphantly yells] [ding] don't get mad. get e*trade and take charge of your finances today.
3:34 pm
the pursuit is on. don't get mad. the pursuit of outperformance at pgim. with deep expertise to outthink across multiple asset classes, actively managing investments in the world's public and private markets. outscale, with the resources to serve 1,500 clients
3:35 pm
in 52 countries. and outlast, with long-term conviction that looks beyond today's volatility. join the pursuit of outperformance at pgim. the investment management business of prudential. 24 minutes left of trading we are seeing a selloff on wall street driven by this headline that came in today you see what happened there, the market took a big spill, all the way down 420 points on a bloomberg report that the biden administration is looking at raising the capital gains rate for high earners who make more than a million dollars to 43%, double what it is right now. joining us is savita subramanian bank of america securities, head
3:36 pm
of u.s. equity and kwant strategy we're going to talk earth day and esg. but on this capital gains news, if this kind of policy goes through, how do you think about what it means for the market >> well, you know, i think it's just another potential negative in terms of, you know, putting some selling pressure on individual investors who are generally overweight some of the stocks with the biggest gains in tech, mega cap tech. i think that's another area where we could see some anticipatory selling ahead of this potential hike in capital gains. you know, we do some work every year looking at kind of the most crowded stocks by individuals, institutional managers and hedge funds. what we're finding is they're all kind of converged to that same subset of mega cap tech leadership we've seen over the lats ten years if we do see this demonstrable increase in capital gains rates, the idea of liquidity seeking
3:37 pm
investors, you know, having to pay a significantly higher proportion of taxes on gains really put some pressure on those holdings i think that's something to watch as the year progresses this was a risk we highlighted late last year it's interesting because now all of a sudden the market is starting to pay attention to these that have been around for a while. i think it is interesting. >> but it's also a short-term impact, savita how do you think about any long-term implications so beyond the selling of the long-term winners like big cap tech, then what? >> yeah. >> does it have any real change for the market's direction and the sectors that you want to be in >> that's a really good question so we've done a lot of work looking at tax rate asks s and t returns, and it's very hard to find kind of a consistent strong relationship so i think that basically what we could see is just the sort of step function forced selling pressure on some of these big winners, you know, over the last ten years that are popular in
3:38 pm
individual investors' holdings, but beyond that, it's really hard to say how demonstrable hiking capital gains could hurt consumption trends or, you know, other asset inflationtrends that we've seen so far not a lot of data to establish or not a lot of strong relationships to establish that, you know, one thing wins and another thing loses. i think do think, though, that this really means that we're kind of tapering off in terms of the era of asset inflation, and you know, what we've seen so far and we've all been writing about this is the idea that we're moving from kind of, you know, wall street to main street in terms of who wins and loses in this type of environment, and i think this is just another signal that we're in shifting towards a main street camp, where the economy actually outperforms the stock market so again, this is just another sign of that >> savita, with your head of esg research hat on, i wanted to ask you about bitcoin on earth day i mean, is bitcoin green, or is it quite the opposite, and what
3:39 pm
is your view on the outlook there particularly as it falls back today alongside other risk assets with this capital gains tax headline >> yes, yes, i think that's one of the reasons it's experiencing some risks today like anything, it's a nuanced answer that i'm going to give you. i think where bitcoin is a bigger offender than some might expect is in terms of the emissions profile of this asset class. we've done some work with our commodities team looking at the emissions profile of bitcoin and mining for -- i want to get this right, mining for a billion dollars worth of inflows into bitcoin is equal to 1.2 million cars being driven over the course of a year so it's really, you know, it sounds like this very, you know, kind of new economy, you know, great asset class in terms of storing value, and there are lots of benefits of bitcoin, but it isn't necessarily super environmentally friendly from just a mining perspective. and i think that's a surprising factoid.
3:40 pm
it was certainly surprising to me, but it's sort of a little known kind of a dirty secret about bitcoin if you will. >> literally, don't tell that to ark -- that put out a report saying it's good for the environment and it's encouraging renewables it's a little self-serving they both have some stake in bitcoin. in your esg part, one tidbit stood out to me more than others, which is technology is not that environmentally friendly as a sector talk about what you're seeing there in efforts for emissions on tech, and why it is so overrated in these esg funds if it doesn't score that well >> no, thank you for the question, sara i think this is really important. you know, when you look at tech companies and internet retail, they look great from a direct emissions standpoint you know, internet retail companies don't have storefrontsmstore storefronts. they don't have a lot of emissions from physical real
3:41 pm
estate when you actually look at the indirect emissions there's scope one, scope two and scope three emissions. when you get out to indirect emissions coming from supply chain, moving stuff around, packaging things, you know, buying a bottle of shampoo and getting it sent to you in a big box with lots of plastic wrapped around it. these aren't really that environmentally friendly and, in fact, tech and internet are two of the biggest scope three and scope two emitters when it comes to the industry. when you look at these companies on a cursory glance they look great from an environmental perspective. when you really start digging into the supply chain risk and the overall emissions profile, you know, tech isn't necessarily as green asit seems. so i think the risk here is that esg funds, when you look at their holdings, are very overweight, tech and other asset light sectors, and when you actually start to unpeel the onion, you know, the true
3:42 pm
emissions profile starts to come out. you know, i think we're at a point in esg investing where esg 1.0 is behind us that was selling energy and buying tech. we're now at a point where i think it gets a little bit more complicated. energy companies are setting carbon neutral net zero dates and they're aggressively approaching those targets. so you know, i think we're now in a more nuanced kind of esg 2.0 world where we're looking a little bit more at the data on a holistic basis rather than just the cursory level. >> savita, thanks so much for joining us much appreciated. >> thank you great to be on. >> straight ahead, the key metric to watch in intel's earnings report. an at&t ceo weighs in on what's driving growth and streaming the market zone is next. and april is financial literacy month as cnbc committed to sharing messages from business and thought leaders about the importance of financial education, here's bridge water associate's co-chief investment officer, ray
3:43 pm
dahlia. >> when i was a kid, i did odd jobs i caddied. i mowed lawns and so on, and i took my caddying money, and i put it in the stock market because stocks were hot at the time, and the first stock i bought was a company that was the only company i ever heard of that was selling for less than $5 a share so i thought i could make more money if it went up. it turns out the company was about to go broke. somebody acquired it and it tripled and i was hooked
3:44 pm
3:45 pm
there was a time when this represented the future. but this, this is the future. the future of communicating of hearing and connecting with life. and this, is eargo. no appointments no waiting no hassles. and they are practically invisible in your ear. now you see it. now you don't. if you have hearing loss now is the time to do something about it. if you're an active or retired federal employee you can get eargo at no cost to you. don't miss out.
3:46 pm
sales are down from last quarter but we are hoping things will pick up by q3. yeah...uh... doug? sorry about that. umm... you alright? [sigh] [ding] never settle with power e*trade. it has powerful, easy-to-use tools to help you find opportunities, 24/7 support when you need answers plus some of the lowest options and futures contract prices around. don't get mad. get e*trade and start trading today. 14 minutes left in the trading day. we are now in the "closing bell"
3:47 pm
market zone, commercial free coverage of all the action going into the close c cnbc's senior market commentator mike santoli here to break down the crucial moments of the trading day and we've go stephanie link back as well. let's kick it off with the broader market stocks are off session allows but still under pressure on reports that president biden will propose a 43.4 capital gains tax for the wealthy individuals. growth stocks getting hit especially hard on that report they are the long-term winners is this the sort of headline that makes you want to sell? >> well, no. actually, today was kind of a quiet day until this news broke. i don't think the numbers are surprising right? i mean, this is what biden was saying on the campaign trail what is surprising is the timing, even to me quite frankly. covid is still a threat, and so i thought this would be maybe more of a second half 2021 discussion and starting point, and then we'd see 2022 more likely higher taxes. but the numbers themselves are
3:48 pm
not that surprising. i totally understand why growth is selling off and why technology is selling off. it makes a lot of sense. maybe we'll get some opportunity along the way. this was just a -- this is a negotiation. it's a starting point. we work from there, and oh, by the way, we industill 3 trillio stimulus that hasn't been used yet and we have also the infrastructure package coming down the pike. we have a lot of liquidity in the system i do not think you want to take any action on a day like today what i am doing i'm actually focusing on fundamentals in terms of the economy, we always talk about these claims because i'm on every thursday. the leading economic indicators beat expectations. existing home sales were strong. dr horton told you net orders for them in their quarter rose 35%. and then there are companies that are reporting today that i can't even understand the reactions to, dow, freeport, union pacific, all three names on my radar screen because all
3:49 pm
three had very good things to say about the economy, and that's how come i call earnings season silly season because things overreact and give you opportunities. >> we've been saying for a while what could be the catalyst to lead to a bit of a pullback for markets. i guess we're getting a glimpse of a possible one today, albeit not a huge pullback, and we're still obviously very close to those recent highs. >> we actually categorized it a little more as a test or an excuse to see if, in fact, there are people really, you know, kind of with a hair trigger to try and sell and take some gains here you know, we've been consumed for months with this idea that everything going on policy wise almost everywhere in the world was market friendly and ecofriendly, and it mostly has been but i think this is one of those things everyone's saying we knew this yes, you knew this was going to be part of the policy mix that was going to be proposed it's a long shot to happen, we all recognize that it's a reminder not everything pulls in this direction, which is in a market friendly one,
3:50 pm
when it comes to potential changes, you know, in policy coming from washington >> shares of at&t are higher on stronger than expected earnings and streaming subscriber growth. julia boorstin's got those details for us hi, julia. >> well, at&t beat expectations pretty much across the board as mobile streaming, internet subscriber growth, and hbo max subscribers all surpass expectations adjusted earnings of $0.86 per share were $0.08 better than anticipated and revenue of $44 billion also stronger than projections. >> get share in the wireless business, and we did it in the right way. i think the fundamental metrics underlying the business were strong, demonstrate that had in our broadband business where we're investing in fiber that we've got a great product that customers love and we can grow that, and then the hbo max numbers are just really impressive the team's executed incredibly well with the strategy we put in place at the end of last year.
3:51 pm
>> stankey talking about how the company is investing aggressively in 5g buying wireless spectrum, also investing in hbo max saying they expect to have up to 150 million streaming subscribers by 2025 as well as in at&t's fiber business they are all expected to spend $22 billion on capital investment this year while committing to maintaining the dividend and also to reducing the company's debt load. that debt has been very much in focus, guys. back to you. >> 150 million from currently just under 10 million. it's fairly ambitious. >> well, look, they're doing international expansion, and remember, it's not just hbo max. they really, you know, want to make sure to reach the whole world with different versions of the service and they're going to be launching an advertising supported version of hbo max that's coming up this summer >> thanks so much for that stef, t there was a lot of discussion after netflix about competition and whether or not netflix
3:52 pm
underperformed because of that this gives you a little bit of a glimpse, again, it also highlights how far behind hbo is or how far ahead netflix is particularly in the u.s. but all over the world. >> yeah, no, hbo is definitely behind that's an opportunity for growth, right? what kind of runway they have ahead of them. so i just think that at&t needed to have a consistent quarter and to build off of that, and it was a clean beat, right, and subscribers were the absolute focus. they beat, i mean, think about the hbo max numbers. 2.7 million and the street was expecting about a million. so you have a long way to go there, but at the same time he also did a really good job in terms of mobility services margins were up 100 basis points year-over-year, and then warner media seeing better ad revenue growth so they kind of hit everything right today. julia mentioned it she nailed it. i think this is a very under owned stock. i was shocked that this thing is actually yielding a 6.9% yield so tells you how far it's come down, but it's at 14 times
3:53 pm
earnings i think it's something worth to look at. >> that's what i was going to ask, mike. nice pop today, 4% haven't seen a pop like that for at&t in a while, and well off the highs. >> yeah, oh, it's coming off really the low end of a ten-year range, whatever you want to, you know, expand it out to and if you think of the verizon at&t ratio, i mean, how those two stocks have traded relative to one another, verizon has been a huge outperformer for multiple years. it makes sense that expectations were low there really wasn't a lot to steph's point in this report for the skeptics to latch onto in terms of the overall story about balance sheet, about cash usage, whether they're going to get traction in terms of market share and streaming. i think it all fits together here for a stock admittedly to just come off of relatively depressed levels on a long-term basis. >> let's hit the ev stocks, electric vehicle maker fis car plunging after goldman sachs downgraded that stock to sell. lowered its price target from $15 to $10 a share
3:54 pm
goldman says it's concerned about fis car's late time to market, its first suv set to debut in q4 of 2022 amid rising competition from tesla and legacy automakers as well. n anemic la is surging today after they announced hydrogen fueling stations for its trucks. >> there's tremendous momentum here we'll have trial production in germany in june, and we'll be making -- we'll have trail production in the third quarter in coolidge, arizona, our new plant that we built here so we're pretty much right on target >> mike, where is the street on nikola does that mean we can put the concerns about fraud, the allegations about fraud from the short seller behind them hearing evan talk about the progress >> i don't know if that's going to put those concerns behind
3:55 pm
him. he also had great things to say before hand, before a lot of those revelations were out there. i think there's real deep abiding skepticism about the other than tesla plays everybody believes the technology is extremely interesting on multiple fronts, and you know, let's see how this works out is kind of where it is, but there's also in the near-term no right or wrong price for these stocks to trade at, right? we're not really valuing a business or a cash flow stream in the future so i think that's why they're going to remain a little bit of a -- kind of a roar shack test of a stock >> josh lip ton has a preview. >> q1 eps of a buck 15 on revenue of 17.9 billion. cowen's matt ramsey says he wants to see more color and commentary about the capex plans as intel invests in its newfound ri business, they're going to need to spend more
3:56 pm
intel offered a $20 billion capex budget for 2021. matt also wants to hear more about the company's progress on seven nanometer and any updates about u.s. government support and funding for the company's new chip plants in arizona thanks so much for that. steph, update us on your thinking on this name. i know it used to be a stock you held, not for a while, though. >> no, not for a while look, the stock is cheap, only trading at 14 times earnings as josh just mentioned, seven nan meters, they are way behind. they gave amd a three-year lead, and so that's not going to change overnight the foundry business is not easy to do. it's a very specialized business that is going to be topics on the call for sure, and by the way, they already preannounced the quarter. we know it's going to be good and it's going to be led by pcs. that's 51% of their total revenues we got numbers in march on notebook shipments up 32%. we know the numbers are going to
3:57 pm
be good. i think the guide is going to be kind of conservative because they have these other things to deal with quite frankly, and again, they just gave up a ton of market share to one of their biggest competitors. >> how has the stock held up there's a lot of enthusiasm around the announcement of the new ceo announced in february, his new strategy he laid out obviously some bumps along the way including nvidia's recent announcement. >> yeah, it certainly held the majority of the gains that it put together with the new ceo announcement, and just with the general sense of optimism that maybe the kind of competitive metabolism of the company is increasing, and they're now going to be very aggressive on the production side. that being said, it also happened at a moment when the overall semiconductor group was at least stalling out to some degree after all those years of leadership so it has not really moved with some of the biggest now market caps and the most kind of aggressively valued ones in the group like nvidia out there.
3:58 pm
so you know, i think it's still kind of people are leaning toward the positive side in terms of what can happen long-term for the stock without really feeling like they're going to know whether it's working or not very soon >> well, it's not working today and neither are the rest of the se semis, mike. technology one of the hardest hit sectors. every sector is in the red in the s&p 500. materials is the worst what are you seeing in the market internals >> internals weakened obviously along with the broader index right around midday when we did get that selloff on the tax headline it's not really a washout, but it had been really pretty much to the positive side beforehand 1.6 billion, new york stock exchange against 2.1 billion to the negative side. the nasdaq 100 is kind of at an interesting spot it had been doing fine before that midday bump, and now we pulled back 1.2%
3:59 pm
this is where there's a lot of cumulative gains and retail ownership. if you care about taxes, that's one thing. this was a show me situation before hand. it didn't make a new high recently before the s&p did. it's actually below that february 12th high that was sort of that big gross stock crescendo of enthusiasm. the volatility index like wise had been in retreat earlier today. it was right around 17 we popped above 19 it's pretty twitch ecy on any sense. it's right now neutral, but definitely not sort of persisting in that down trend which actually recently got it below 17 as well >> just under 1 minute left. pointing to bitcoin, 53 k, it's down a couple of percent today at 2 all three of the major averages having a similar shape to their chart. there's the dow for you down 320 points the low was down 420 we're looking at about the same in percentage terms for the s&p and for the nasdaq composite and the charts all look of a similar shape as well, that midday
4:00 pm
selloff. all sectors on the s&p 500 are low. real estate is the best performer. worst performers down more than 1% are materials, energy, tech, consumer discretion and financial. it is quite a broad selloff with all 11 sectors in the red at the close. the vix up 7% to 18.8 at the close. s&p 500, dow, and nasdaq all down 0.9%, sara. >> worst day for stocks of the month of april welcome back, everyone to "closing bell," i'm sara eisen along with wilfred frost and mike santoli take a look at how we finished up the day on wall street. big selloff happened earlier in the afternoon when bloomberg reported that the biden administration is looking at raising the capital gains rate by double on higher income earners. you saw the reaction, it was swift. the dow plunged at the lows of the day down 420 points. we closed down 322
4:01 pm
home depot the biggest drag, and it was the worst day for the dow since march 23rd the s&p 500 down almost a percent, worst day since mid-march, third down day in the last four. so we are tracking for a weekly loss of a little more than 1% so far heading into a friday. the nasdaq also falling against 1%, 1% dpe klein across the three major averages the small caps held up a little bit better down 3/10 of 1% investors are now awaiting earnings this hour from intel, snap, mattel, and wwe. we will break down all those results as soon as they are released first up, let's talk markets stephanieling from high tower still with us. first to you, mike, on the market reaction to some of these headlines around the capital gains tax and what it ultimately might mean for the market. >> yeah, i don't think the market was necessarily feeling as if it's anything like a done
4:02 pm
deal nobody is sort of readjusting their assumed after tax expected returns based on this headline, but it was one of those reminders that when the market is feeling good about itself, it's near the highs, a lot has gone right, and most people are focused on all the positives that are to come, something comes along when, you know, when you have lopsided positioning and people leaning in one direction. i don't think this changes the overall story that much. the s&p held a bit above the recent lows and we'll see if this is maybe just an excuse to just chop around for a little while longer i don't think this was, you know, kind of a pure kind of expression of what is to come and therefore, howe the market has to be valued differently i think it was an excuse for a bit of a shakeout. >> let's get more from ylan mui on those proposal s on the potential biden tax plan what's the latest? >> president biden has long talked about taxing capital gains as ordinary income, and what we've reported in the past
4:03 pm
and what bloomberg reiterated today is that biden would do that by raising the top rate on high income earners to 39.6% and then taxes capital gains at that rate for wealthy households. now, already that would be nearly double the current cap gains rate of 20%, but bloomberg also reported today that the white house intends to keep an existing additional tax of 3.8% of investment income in place as well now, that would make the effective federal tax rate on capitol gains 43.4%. now the white house would say the goal here is to improve the fairness of the tax code, but of course the administration is also trying to raise revenue to pay for phase 2 of its infrastructure plan or just focus on human capital now, i am told that package is expected to cost roughly $1.5 trillion, and that a significant amount of it, if not all of it would be paid for by higher taxes on the rich guys. >> ylan thanks so much for that. scott, what's your take on how
4:04 pm
much this could hurt stocks if it really comes to fruition that we get a sort of 40% capital gains tax for some people? >> i think, it would certainly be a headwind for stocks and certainly cause some downside. for today, you know, mike i think summed it up pretty well we've been up here at these lofty levels we haven't had much downside people are looking for an excuse we know that really higher taxes and more regulation, typically the market fights through it but doesn't like it very much. for us when you look at this and you look at how discretionary spending, consumer spending, it is dramatically skewed toward high earners, and so this would definitely dramatically affect them or certainly meaningfully impact them when you throw state taxes in with what's proposed, you know, some of these states, you know, you're well over 50% so i think the market -- that's
4:05 pm
something for the market to think about. right now most things are just being overwhelmed by the amount of stimulus in the system, and that's really going to push gdp up a lot this year so that's something that the market, i think, isn't going to dwell on day after day plus, i think there's probably a few democratic senators that would not be keen on raising this tax, certainly to that extent >> we're going to pause this conversation and get to intel whose numbers are just out josh lipton has them josh >> sara, intel reporting q1 earnings per share of $1.39. that's first expectations of $ $1.5, turning to q2, they say they're looking for 1.05 on the bottom line. that's lighter than expected revenue at 17.8 billion is above the street, closer to 17.6 billion for the years they do raise their guidance they're now looking for $4.60 on the bottom line and 72.5 billion
4:06 pm
on the top line. quickly to the segments, ccg so chips for pcs, 10.6 billion. that's better than expected. street was closer to 10.2 billion dcg business, that's chips for the data center, 5.6 billion street was closer to 5.83 billion in the quarter. remember the stock was up about 25% so far this year, and analysts pin at least some of that on high hopes for new ceo pat gelsinger. >> tonight on "mad money" our jim cramer will talk with that new ceo. 6:00 p.m. eastern time you don't want to miss that. it's sort of chopped around since the ceo change, but a nice climb in the last month or two. >> right, it certainly has go gotten -- i think he's gotten the benefit of the doubt to this point. somewhat light on the second quarter guidance they're going to be a little conservative on that front that could account for just a slight step back right now
4:07 pm
this isn't really a story that was meant to be bearing fruit this minute in terms of the strategic reorientation of intel. >> steph, what are you going to be listening for, anything that would entice you back to this stock? >> no, i mean, because it is up 25%, the expectations were pretty high, so i'm not surprised to see it sell off just a little bit. we really were expecting guidance not to be great, and that is because you had such pull forward in pcs. pc as a market as a whole grew 13% last year. it's still going to be healthy, but this is 51% of their business, and it's not going to be reaccelerating from what we just saw real big beneficiary of stay-at-home, and of course the big talk is going to be seven nanometer on the call. i don't think it's going to be as much foundry. they're just beginning on the foundry side it's going to take them years to get that really where they want it to be it is going to be seven nanometer and how much further that delay is going to be or are they making progress if they're making progress and they talk about that, maybe the stock can recover, but not
4:08 pm
surprised at all about the reaction here today. maybe it just sits here for a bit. >> scott wren, what's your take on the tech space more broadly, and we saw the nasdaq 100 pull back quite a lot today do you think that's exposed whether we're talking tax hikes or not >> well, i think for us a few months ago, we had been overweight tech for quite a while, but we took some money off the table. you could argue we took it off a little bit early, but we still remain overweight. the sector as a whole has run long and hard, and i think is going to be more sensitive to rising interest rates. the tax situation once again is anything on the capital gains is anything but a done deal the market knows that, and so i think tech overall will continue to turn in some good numbers, which certainly it will. that sector will this quarter, and i think tech's going to continue to be more sensitive to what's going on with interest rates such as the yield on the
4:09 pm
ten-year >> let's bring in stacy rascon from bernstein research here to break down the intel numbers with us. you had a chance to look through. what jumps out to you? >> briefly, yes. the quarter was very good. we knew that was going to happen the guide is interesting it's in line with revenue. it's quite a bit low on e eps. it suggests the costs are going up data center margins were very low, 23%, i've never seen them that low they're guiding obviously for the full year giving the magnitude, i expect they're guiding the second half down than where maybe people were before, and the gross margins in the second half are coming down by like 250 basis points these are all going to be issues to dig into on the call. what's actually going on first half, the second half, what are the drivers, what's going on with the margins and in particular, how permanent is that margin degradation going forward as we go into next year. >> well and also, stacy, how important is that? i mean, how much is intel right
4:10 pm
now a play on what's going on now and in the coming quarters and how much of it is a longer term vision here from the new ceo, including the foundry and the expansion of factories in the u.s. >> yeah. i mean, that is obviously the story, right i mean, the near-term was set up to wherever they're going to go. we kind of have like the broad basis of the plan, i think somebody alluded to earlier even if they sort of succeed on what they're doing, they're still going to be behind on process. so it sort of brings some of that into question we still have no idea what the transition economics look like as we go from where we are today to where they might be in two years or three years if you start to peel in, especially on the margins which i think is a good indicator of where those transition economics are going to go, those look like they're going in the wrong direction. we'll see. the other question obviously, you know, they're beating on pcs, data center missed. i don't know how sustainable the current pc strength is they're probably over earning on that. >> key questions for you on the call >> obviously anything through the rest of the year margin
4:11 pm
drivers, drivers of the revenue growth sustainability of pcs versus data center, do we get the data center recovery in the second half and obviously anything else they can tell us on the new plants process technology, capex, foundry strategy, anything we can get in terms of trying to start to piece together what the transition looks like. that'd be helpful. >> this is clearly not your favorite stock what's your target >> we're $43 >> intel trading 60.93 after hours, down 2.5% thank you for the quick take. mattel results just out, our courtney reagan has those numbers. courtney. >> yeah, some pretty big results here from mattel a big beat compared to what analysts were expecting. a loss of $0.10 but the street was looking for a loss of $0.35 and then revenues up 47% to 874 million. the street was looking for 684 million. the net north american sales
4:12 pm
really the strong point up 67% net international sales up 30% they're giving us net sales for american girl, the only segment they're breaking out for net sales at this point up 22%, and then the adjusted gross margin, 47% this year compared to 43.5% last year. and then when you look at the gross worldwide billings which is different, of course, than a net sales number, you can see the american girl and barbie was very strong there as well as the action figures shares are higher by more than 5% at this point, and the company is going to give guidance on the call that starts at 5:00 p.m. eastern time. back over to you. >> up 6% tonight on "mad money" jim cramer will talk to the ceo of mattel. great lineup on the show as ever for jim. snap results are out, and julia boorstin has them for us julia. >> well, snap beating expectations across the board here for the first time in the company's history, it had reported positive free cash flow
4:13 pm
with a very small unexpected net income report of $2.5 million coming to break even on a per share basis. analysts were expecting the company to report a $0.06 per share loss revenue also beating estimates growing 66% to $770 million. that compares to the 743 million analysts had anticipated that is the company's fastest growing -- fastest growing revenue in three years daily active users 4.5 million stronger than anticipated. the country added 15 million in the kpaert th quarter. that's the highest user growth in over four years guidance on a range higher hthan the consensus estimates. 840 million in revenue in the second quarter and now what seems to be driving these better than expected results, they seem to be benefitting from the reopening rather than hurt by that in march they say over 125 million snapchaters used their spotlight feature and they're seeing a lot of engagement from
4:14 pm
both advertisers and users with augmented reality, with a 40% increase in the number of snapchaters engaging daily with their ar lenses. so certainly seems like it bodes well for some of the other social platforms we'll be hearing from next week, guys >> that's a really interesting tidbit on the reopening story, julia, thank you. mike, what's the issue here? stocks down 4.6% there was some risk going in that snap would be like a netflix, you know, having benefitted from the stay-at-home economy, which saw really strong user growth and engagement sounds like snap is telling us the opposite >> yeah, it doesn't seem as if it's really directly a guide i mean, i would go back, first of all, to there has been a very pretty strong sell of the news response on most even upsides reports. i'm not sure if that's what it is in this case or not the daily active users, it seems like it was pretty much what people might have been looking for. the free cash flow is a nice
4:15 pm
story. they still issue a ton of stock, pay a ton on stock-based compensation i'm not sure that's anything different than the story that's been in place for a while. >> another example of silly season as you call it. >> well, i mean, snap is up 23% from the march 30th alone, right? it's up 235% in the past year, so it's had a nice run there were very high examinpectations i think the quarter sounds just fine youprobably needed more upside on the daily active user number in my opinion. you didn't really get it, but i think -- i like that the people are using the spotlight, and i want to hear about monetization about maps i think, you know, this is probably the right response just given that the expectations were so high. by the way, the mattel quarter was awesome. it was really terrific. >> steph and scott, thank you so much for joining us. good to see you as always. >> thank you much more reaction to snap results, we're joined by analysts who think the stock
4:16 pm
still has 35% upside. plus, mike santoli will look at how soaring prices are hitting the cost, we're back in 90 seconds ♪ why do you build me up ♪ ♪ (build me up) ♪ ♪ buttercup, baby ♪ ♪ just to let me down ♪ ♪ (let me down) ♪ ♪ and mess me around ♪ ♪ and then worst of all ♪
4:17 pm
♪ (worst of all) ♪ ♪ you never call, baby ♪ ♪ when you... ♪ ♪ say you will... ♪ carl. what have you done? think anyone will notice? yes. yeah. if you ride, you get it. yeah, they will. geico motorcycle. fifteen minutes could save you fifteen percent or more. shares of snap are lower right now, after hours despite reporting better earnings moments ago. joining us with a buy rating and an $81 price target. daily active users, 280 million, the revenue and profitability
4:18 pm
story is looking better. what do you read into the market action here? >> yeah, stocks expensive at 17 times revenue, had a big move. advertising is coming back there's no doubt across the board, this is good for facebook, twitter, across the ad ecosystem, but we do believe, again, snap had a phenomenal move, and they promised over 50% growth for the next several years, which, if i was the cfo i would never offer 50% growth i think they could have set a lower bar. they just set a high bar and you got a big multiple fundamentals are in check. we still think the business remains extremely healthy, and it's a great first read into the rest of the digital advertising industry and we continue to expect very good things across the board for amazon's business, for twitter, for the rest of the industry. >> what about daily average users for snap, 280 million, which was an improvement
4:19 pm
what happens as the reopening occurs sounds like julia is reporting that snap says it's actually helping them is that true >> i think it will if you look at the snap user base, which is a younger demographic, you look at they are effectively on the system to understand kind of where their friends are, learn about content, you know, watch look at content, shows, video games. that's not going to matter if they're sitting in the room or if they're out in the park, and in many ways, we've talked a lot about the map. the map is the single most under appreciated asset inside snap. there's an ability for them to monetize that. as everyone starts to wander out, snap can start offering ads locally on the ap. kids get out of school, hey, symptom by for some ice cream. here's an event that's happening in the park. there's an unbelievable level of innovation that's happening around the map, and so we believe this could be a
4:20 pm
multibillion dollars opportunity just in the map, and they've highlighted this as an opportunity. as you venture out, you've got a way to monetize small businesses want to be involved as younger audience gets out and goes beyond playing video games or watching, you know, netflix in their room so we think snap can kind of go where the younger audience goes, and we think they're also aging up with a slightly older demographic, too, in some of the content. no question, i think, sentiment is that there's better opening trades, you know,, ai airbnb, and match and bumble and dating, but snap will do well, we think, in any environment as it relates to the younger audience, which is predominantly on the platform. >> julia's been digging through the release, has a bit more color for us hey, julia. >> well, in the prepared remarks there's actually a comment specifically about the impact of the opening they say as things begin to open up in the united states in late february, we saw inflection points in key behaviors like story posting and
4:21 pm
engagement with the snap map more recently we saw a rise in the rate of new friendships and bi directional communication on snapchat as people have gone to socialize in broader groups. it sounds like maps are really something that they worked on, you know, throughout the duration of the pandemic that they're seeing really kick in right now. >> i mean, i know you've got a buy rating on the stock a little bit after hours, it has been kind of flat and chopping around for the last few months. do you think it's a good entry point? >> yeah, i mean, i think you know we still think the stock trends towards 80 and we think, g again, you had a huge snap in advertising names. they're up 10 to 40% between, you know, snap, twitter, pinterest, you go across the board. you had a big strong recovery as wall street's expected i think ultimately there's a bigger opportunity in some of the reopening names in travel and dating in ride share that probably have a better
4:22 pm
opportunity short-term but yeah, we think the future looks very good, and we're encouraged by what we're seeing. >> brent, great to see you, thanks for joining us. >> thank you >> let's get up to mike now for a look at the rising price of homes and autos, mike. >> yeah, wilf in both cases constrained supply, extremely strong demand as consumers have lots of savings and want to buy a new home this is the key manheim used car index. it basically shows the trend this usually is not that exciting looking chart, but this is up massively like almost 50% or so year-over-year, and it's accelerated annin the last coupe of months. this is median price of a single family home. usually much more measured growth this is something like 17% over the course now a number of new existing homes fell short because there's not a lot of supply. we're trying to find the clearing price on all these things the stock market obviously has handicapped son-ime of these
4:23 pm
effects. if you look at bellwether names in plays on used car sales as well as homebuilders, they've done really well the s&p is up about 20%, and what you see here is auto nation and carmax auto nation really, you know, they're really more emphasizing used versus new cars even though new is higher on revenue, and then we have the homebuilders. here's the thing, homebuilders have kind of flattened out here as yields went up a little bit, and maybe people are wondering about what the cadence buildout is going to be and lumber costs going through the roof the used car story and new car for that matter seems pretty strong by the way, guys, one of the reasons is rental fleets, they were buying a lot less, and they liquidated a lot of their fleets last year. that's usually a source of a lot of used cars for sale. the broader story mike is inflation. especially if you look at used cars every day there's an earnings report whirlpool was the latest, chipotle also out, the other day
4:24 pm
was p&g and kimberly-clark and smucker. they're all raising prices is it because of one time issues like a spike in raw materials prices for instance or chip shortages, and are we going to get more price hikes, which would then maybe signal a more worrisome inflation outlook, or are we just going to have these sort of one-time gains, which i don't think really would be particularly worrisome for the fed and for the economy, right >> they wouldn't, not initially, and certainly not for the fed. i mean, the fed is basically going to stick with its bet that this is a fleeting effect, it's largely statistical, largely about supply chains, and about this friction in a lot of the manufacturing areas and trade areas. so i think right now the market might decide it's a slight problem or maybe you have to raise your estimates for longer term inflation but it's actually also, you know, a margin story for companies. there's going to be winners and losers based on where the margins fall whether they can pass along prices or not
4:25 pm
>> good point. mike, thank you. up next, the cfo of wwe on the company's latest earnings and how its new streaming deal with nbc universal's peacock, our parent company, will impact our parent company, will impact future profits ♪ ♪ ♪ obsession has many names. this is ours. the lexus is. all in on the sports sedan. lease the 2021 is 300 for $369 a month for 36 months. experience amazing at your lexus dealer.
4:26 pm
4:27 pm
want to save hundreds on your wireless bill? with xfinity mobile, you can. $369 a month for 36 months. how about saving hundreds on the new samsung galaxy s21 ultra 5g? you can do that too. all on the most reliable network? sure thing! and with fast, nationwide 5g included - at no extra cost? we've got you covered. so join the carrier rated #1 in customer satisfaction... ...and learn how much you can save at
4:28 pm
wwe shares popping after just reporting its quarterly results. revenue down 9%. this comes after not having any ticketed live events over the past year due to covid-19. however, this month wwe held wrestlemania in florida, the first event in more than a year with fans in attendance. it was also streamed on nbc universal's peacock as part of a multiyear deal with our parent company. joining us now for an exclusive interview is kristina salen, wwe's cfo. it's a little bit hard to readed financials of your earnings report given the peacock deal, that billion dollars deal. what can you tell us about what you've seen during the quarter as we've started to reopen >> well, you know, we had a solid first quarter result we continue to innovate in an ever changing media landscape, and a challenging covid environment as you mentioned
4:29 pm
live events are an important part of what we do, but they're not the only part, and, you know, i think this quarter is a great example of how we innovate the nbc peacock agreement, which was announced in the first quarter is a great example of how our business -- how our business works we launched -- we launched our service along with wrestlemania, which was our first live event in over a year it was held about two weeks ago with 50,000 fans in attendance, and it brokerecords across our business so covid is still a part of our everyday, but we're very optimistic about our future. >> so the peacock deal obviously a huge factor here for the stock, and a pivot, kristina
4:30 pm
talk about why you did that, went that route instead of doing your own streaming services, which it was looking like that was the original plan. >> well, a number of companies have launched streaming services in the last year i think a lot of folks don't know that we launched our service nearly since years ago when it was really just wwe and netflix, and so for us, we've done a tremendous amount of learning over the last five, six years, about what it takes to have a competitive streaming service. we're really proud of what we've done, but we see it as a huge technology lift, and what we're really good at is content. so partnering with nbc peacock allows us to focus on what we're really good at, this amazing global brand with recognition and reach that's really unparalleled amongst independent content companies. >> so kristina, also seeing the
4:31 pm
announcements of late with betting companies. talk us through that and forgive me for asking the follow-up question, which is how doyou bet on a sport that's essentially staged and fixed >> yes, well, we recently announced in the first quarter as well a partnership with draft kings. we're very excited about it, and we launched it with wrestlemania and you're right, in our case the outcome is known, at least by us, but we're seeing lots of opportunity in the future around events where the outcome is known by some folks. for example, the oscars upcoming there's betting around the oscars for the first time, so we think there's an opportunity to really engage our fans in an activity that they enjoy, which is betting and circle it around
4:32 pm
our -- the other activity, which they really enjoy which is watching the action in the ring. >> that's a very helpful comparison, actually, with the oscars, kristina, and thank you so much for joining us >> thank you so much for having me >> we've got a market flash now on sky works, contessa brewer has got the details. contessa. >> hey there, sky works is on the move after hours after the company agreed to buy silicon labs infrastructure and automotive unit for $2.75 billion in cash. silicon labs says it will now focus entirely on its internet of things segment, while sky works says the purchase will accelerate its expansion in areas like electric vehicles plus, it aims to return $2 billion to shareholders through dividends and buybacks after this deal closes silicon labs was halted for the news and was slated to resume trading at 4:35 eastern time so just about three minutes. >> thanks so much for that
4:33 pm
up 4%. coming up most sports related spacs have not been home runs for investors that's not stopping a rising acquisition corporation from purchasing ticket sellers vivid seats. e os of both companies join us a little later on the show. it used to be that brainstorming required a whiteboard and squeaky markers, but when you have devices that let you collaborate in real time from anywhere, the future works better. microsoft surface devices with teams, orchestrated by cdw enable employees to stay productive when working together, with high-quality audio-visual features
4:34 pm
designed for natural collaboration. so your team always captures every detail. microsoft and it orchestration by cdw. people who get it. microsoft and it orchestration by cdw. no one likes to choose between safe or sporty. modern or reliable. we want both - we want a hybrid. so do banks. that's why they're going hybrid with ibm. a hybrid cloud approach helps them personalize experiences with watson ai while helping keep data secure. ♪ ♪ ♪ from banking to manufacturing, businesses are going with a smarter hybrid cloud, using the tools, platform and expertise of ibm. ♪ ♪ ♪
4:35 pm
all the things, all around you where you learn, work, and fly we help make them healthier. we are the people of abm. for more than 100 years, we've been a leader in making spaces cleaner, from the things you touch to the air you breathe. today, more than 100,000 of us are innovating to ensure spaces are more efficient, healthier and safer. abm. making spaces healthier for you. welcome back there's how we finished on the session down, that big intraday selloff around 2:00 p.m. on
4:36 pm
reports of a capital gains tax hike potentially in the works from president biden all three of the major averages down about 0.9%. time now for a cnbc news update, rahel solomon has it for us. with some states moving to loosen outdoor mask mandates and some health experts saying there's very little chance of transmission, passing someone on the street, the head of the cdc says it's looking at revising its recommendations but dr. rochelle walensky tells nbc it's complicated. >> we have this complex message that we industrstill have hot s this country, and we will be looking at the outdoor mask question but it's also in the context of the fact that we still have people who are dying of covid. nasa's ingenuity helicopter completed its second flight today. the device went higher and stayed up almost a minute longer than the brief outing. today it went as high as 16 feet and also flew horizontally covering seven feet side to side. and willie maze has been awarded baseball digest's first
4:37 pm
lifetime achievement award for what the magazine is calling significant contributions to baseball maze who is about to turn 90 won two national mvp award and was a 24-time all star during his career with the san francisco giants and the new york mets another well-deserved accolade there. i'll send it back to you. >> rahel, thank you. when we come back, betting on the return of live sports and concerts, up next the ceos of horizon acquisition corporation and ticket seller vivid seats on their big spac merger.
4:38 pm
we made usaa insurance for members like martin. an air force veteran made of doing what's right, not what's easy. so when a hailstorm hit, usaa reached out before he could even inspect the damage. that's how you do it right. usaa insurance is made just the way martin's family needs it with hassle-free claims, he got paid before his neighbor even got started. because doing right by our members, that's what's right. usaa. what you're made of, we're made for. ♪ usaa ♪ if you're 55 and up, t- mobile has plans built just for you. we're made for. switch today and get 2 lines of unlimited and 2 free smartphones. plus you'll now get netflix on us. all this for up to 50% off vs. verizon. it's all included. 2 lines of unlimited for only $70 bucks. and this rate is fixed.
4:39 pm
you'll pay exactly $70 bucks total. this month and every month. only at t-mobile. want to save hundreds on your wireless bill? with xfinity mobile, you can. how about saving hundreds on the new samsung galaxy s21 ultra 5g? you can do that too. all on the most reliable network? sure thing! and with fast, nationwide 5g included - at no extra cost? we've got you covered. so join the carrier rated #1 in customer satisfaction... ...and learn how much you can save at
4:40 pm
vivid seats set to go public, merging with horizon acquisition corp the spac market is called off after a blockbuster quarter. joining us, very good afternoon to you both. con congrats on the deal stan, i'll start with you if i may in terms of your outlook for how quickly live events are going to bounce back, and, in fact, if we're already seeing a little glimpse of that already
4:41 pm
>> yeah, hi, wilfred, thank you for having us on today really excited to tell you the story of vivid seats and the partnership with horizon as we look out, i think there's certainly very encolouraging signs. the ones i'd point to in terms of recovery are where we see baseball as the season starts, every stadium has had fans at a different capacity level we're seeing the state slowly start to open up i think and certainly we expect venues to follow suit. >> todd, talk us through the process of getting to this point and whether it's gotten tougher, whether you didn't think you'd get to this stage given that spacs have cooled off so much in just a matter of weeks >> well, i think really the spac blast that we're seeing is more unrelated to the specific company that one can acquire within a spac. i think ultimately a spac is just a chassis that has equity capital in it, ultimately, the goal is to find a really good
4:42 pm
company and then take that company public, and ultimately the fact is in two years' time, no one will remember whether it was a spac or not. you know, we're really excited about vivid. we think that what they really showed during the downturn was the ability to reduce their overhead, and then at low levels of volumes, they've been able to generate cash. so we think it's a great machine that ultimately is extremely well-positioned for the recovery, whether that actually comes in 2022 or 2023, i think our capital structure is so patient given that we really have no leverage on the balance sheet. >> stan, i saw the bad bunny sold out he sold out the world tour so quickly, i think tickets are going for 2,400 on the resale market beyond that, what's your sense of the underlying pent up demand for some of these events and do you think once they open
4:43 pm
people will come >> yeah, i think, look, i think we're certainly optimistic and, you know, i think that live events will come back and come back safely. i got my mask here i'd say we've all got to do our part to getting there. i think bad bunny tremendous last week of selling out as quick as he did. i think as we think about, you know, indicators that there's tons of pent up demand what we continue to see as a leading marketplace that really is an index for how much demand is outpacing supply. i think that what we see is that average order sizes continue to go up. a strong reinforcement there really is a lot of demand. as soon as it's safe to do so, i think you're going to see a lot of people want to go to live events. >> talk us through the business model. we often talk about interest rates being important for bank stocks are they relevant as well to you in terms of having often a lot of cash on bhhand between the period when people buy the
4:44 pm
tickets and having a live event take place. >> i think we have a pretty favorable working capital dynamic in our business, but at the same time, you know, i'd say we do -- we have two customers as we think about our mrkt place, we've got our buy side and our sell side. as we look at how we treat our sell side and certainly what we've done in the pandemic, i think we've been really conscious and fair with the sale side terms in how we've injected liquidity into that ecosystem as well. >> i have an unrelated question for you about the dodgers because we don't get to talk to you very much. i was just wondering with all the hubbub around the all star game and pulling out of atlanta if as an owner you supported that move over the controversial voting law >> i think the dodgers have been advocates for voters' rights, you know, from the very beginning, and i think the dodgers continue to, you know, show themselves. obviously we had the largest testing center in the world, the largest vaccination center, you
4:45 pm
know, we've absolutely been supportive of the commissioner, and we do believe that those types of things matter. >> also just wanted to ask if you had a view on the european super league and its collapse this past week you were linked with a bid to buy chelsea fc a few years back. i don't know if you can confirm or deny that attempt either way, just wondered if you had a view on the announcement and swift collapse of it and if a premier league club because of fan protests or whatever else becomes available in the next few weeks, are you interested? >> listen, i think we're absolutely always interested in really quality assets, and you know, frankly, i think what was illustrated in the collapse of the super league was the fact that this is all about the fans, whether you're thinking about vivid seats and all the fans that we're trying to service or you're thinking about the dodgers, it's basically the fan is in the middle of all these business models, and if you forget that, then you forgot
4:46 pm
really why you set out in the first place. >> speaking of the fans, stan, a few members of congress, democrats are asking the biden administration to take a closer look from an antitrust perspective at the ticket master live nation deal, which is, what, like a decade old. i would assume you would support that do you think that that deal is harmful to consumers and to competitors like yourself? >> yeah, look, i think any deal where there is, you know, a monopoly i think is going to be one where it's got to be looked at with scrutiny, and looks like, i'd say the department of justice is potentially going to take a look with the inquiries there. you know, i think from my perspective, it's always about making sure consumers are protected as they look into various industries you know, we feel really well-positioned in terms of how we've done that at vivid seats we've won best customer service in the industry now two years in a row. we offer our fans, you know, a rewards program so that they get additional, you know, purchasing
4:47 pm
power beyond the transaction that they're having. so we feel it's about the fans it's about providing consumers value, and ultimately, that's what we should be all striving to do. >> todd, just to round things off and go back to it, i don't know what you would value these premier league clubs at. i mean, you mentioned united listed is worth 2.7 billion, but the likes of arsenal and chelsea are not -- would you be genuinely interested in making a bid for a club like that in the months ahead >> listen, it comes down to opportunity and price and structure and control, and you know, really what can you do with it. i think obviously what we've proven with the dodgers is that, you know, we're all about winning, you know. after winning the world series, we went out and got trevor bauer and continued to add to the resiliency of the club, you know, so i think if you have an opportunity to develop, you know, a franchise like we have with the dodgers, those things are very exciting, and remember
4:48 pm
as long as you keep in mind that you're there to win and you're there for the fans, i think that that's, you know, something that we're very in tune to. to the extent an opportunity came by that made sense we surely would look at it. >> a question on todd the fans, and live sports and events, but the dodgers particularly are testing these vaccinated areas in the stadiums. what's the likelihood that we could see vaccine mandates at things like sports games >> you know, i'm not close enough day-to-day to express a view on that, but i certainly see us now testing the idea, as you said, you know, areas and ultimately our goal is to get as many fans back safely as possible so i think that, you know, we're still playing through exactly how to do this expecting that the 2021 season was going to be a little bit one step forward, one step back, but the great
4:49 pm
news is, you know, we opened our home series against washington last week, and had 15,000 fans >> the reopening trade, stan and todd, thank you both very much congrats on the deal today we appreciate it. >> thank you very much >> thank you after the break, robinhood enters the lobby, the trading startup getting political spending big money in washington, and there's a tie-in with tayod's biden tax hike proposal proposal we'll explain next that can guide an astronaut back to safety. and help make a hospital come to you, instead of you going to it. so when it comes to your business, >> the reopening trade, stan and with today's biden tax hike
4:50 pm
4:51 pm
don't like surprises? [ watch vibrates ] proactive notifications from fidelity keep you tuned in all day long. so when something happens that could affect your portfolio, you can act quickly. that's decision tech, only from fidelity.
4:52 pm
robd is robinhood is getting into the game. priorities the company is pushing. hey, kate. >> hey robinhood started lobbying for the first time the start-up looking to protect a key part of its business model, trading revenue $460,000 to lobby four pieces of legislation in the first quarter. this is according to some new disclosures out this week. it's focused on market infrastructure and realtime settlement, both of which came up during the gamestop saga and the wall street tax act of 2019. this is a proposal for a transaction tax. it could tax stocks and some other asset purchases. that type of trading tax has been floated as one way to dampen day trading activity but it could weigh on robinhood and the other online brokers the industry, of course, relies
4:53 pm
on payment for order flow. less trading would hurt profitability. the lobbying effort comes as robinhood faces new regulatory pressure from the state of massachusetts. guys, back to you. >> coming from a lot of angles kate, thank you. up next, your full earnings rundown as we count you down to the call fm rointel, snap and mattel mattel we'll be right back.the right o? if you care about economic equality and social justice, which firms are addressing it in their workplaces communities? for nearly 40 years, calvert has delivered competitive returns by investing in companies making a difference because we see value in doing good. for more information, visit hey, dad! for mohey, son!ation, no dad, it's a video call. you got to move the phone in front of you it's a mirror, dad. you know?
4:54 pm
alright, okay. how's that? is that how you hold a mirror? [ding] power e*trade gives you an award-winning mobile app with powerful, easy-to-use tools and interactive charts to give you an edge, 24/7 support when you need it the most and $0 commissions for online u.s. listed stocks. don't get mad. get e*trade and start trading today.
4:55 pm
4:56 pm
intel was offset by disappointing second quarter profit guidance. as you can see down 1.6% snap and mattel both rallying after reporting better than expected results snap had dipped a big turnaround for snap and boston surging after a 60% increase in very strong revenuero gwth. more earnings on deck tomorrow key things to watch. that's coming up next.
4:57 pm
4:58 pm
4:59 pm
now to our wall street lookahead. 9:45 a.m. eastern and new home sales at 10:00 a.m. eastern and earnings from american express, honeywell and kimberly clark after the pullback today, what will you be watching >> the pmi is worth a look
5:00 pm
a lot of talk last month we reached the peak acceleration rate but also wall street strategists saying don't worry they're not going to 40% tomorrow this is not necessarily an excuse to change your investment posture, whether that's true or not, i think they're going to stay >> a bit of a jump in the vix. down a percent closing bell "fast money" starts right now. >> i'm melissa lee and this is "fast money. tonight on fast, the headline that shocked the markets stocks taking a leg lower this afternoon on reports of president biden planning a major hike to the capital gains tax. we'll get instant reaction from wall street's biggest bull he'll join us exclusively. plus, skyworks solution on some deal news. the full details and how they're playing this and mad skills. why this mobile gaming company could be the new target. what is drivin


info Stream Only

Uploaded by TV Archive on