tv Closing Bell CNBC April 23, 2021 3:00pm-5:00pm EDT
pick and then everything else of course as well >> we didn't have a stock draft last year. so there's no winner to announce >> we're going to make up for it, though, this year. we're going to be doubly good this year. >> i am excited. i will say i've already been looking at some wardrobe options. the most important -- >> beautiful thing >> all right that does it for "power lunch" today. tyler, dom, thank you, everybody. we're look forward to it all next thursday. "closing bell" starts right now. >> love the stock draft. welcome back, everyone welcome to "closing bell." i'm sara eisen along with will fred frost stocks rebounding today from thursday's tax shot. the major averages in the green with the nasdaq leading the pack but all are still in jeopardy of closing lower for the week breaking a four-week win streak. let's look at what's driving the action investors digesting a possible ramifications of a reported capital gains tax hike for wealthy americans. we'll talk much more about that in a moment. those tax concerns are having a big impact on crypto today bitcoin falling below a50,000.
at one point hitting its lowest level in more than a month and the dow is underperforming as components intel, honeywell and american express fall on the back of earnings and this week's action is just a warm-up. big names like tesla, apple, facebook and alphabet set to report over the next seven days. 59 minutes left to go in the trading week will fred. >> coming up on today's show a truly good quarter boston beer reporting strong earnings helped by surging sales for its truly hard seltzer brand. we'll speak with the company's chairman that just a bit plus david giroux from t. rowe price is looking for pockets of value but having a hard time finding them he'll join us with his outlook for the broader market and where those few pockets of value are hiding let's get straight to the big story of the day and it's president biden's capital gains tax hike proposal. ylan mui has the latest on what we know so far terry haines from pan gae joins us to discuss whether a tax hike will come to fruition. and robert frank is covering the
impact on the crypto market for us but ylan, let's start with you and where things stand 24 hours or so after that initial story broke. >> president biden won't formally release the tax plan until next week but the partisan bickering around it has already begun. here's kevin braid yit top republican on the tax writing committee in the house >> raising the capital gains rate is another economic blunder by the biden administration. this will punish americans for investing in local businesses or in the u.s. economy. >> now, over in the snoot republican pat toomey warns that a dramatic spike in the capital gains rate could backfire. he said, "this proposal is so punitive that, if enacted, it could actually lead to a decrease in tax revenues we should be encouraging more capital investment, not less ." and he called it a terrible idea now, today the non-partisan penn wharton budget model projected that a hike of the cap gains tax alone would in fact reduce
federal revenues by $33 billion over a decade because investors would just hold on to their gains until they die however, if biden raises the tax on capital gains and increases taxes at death, the combined proposal would bring in $113 billion. so guys, we really need to see the full picture here to understand what the hit to wall street will actually be. >> another reason to consider the step-up basis. ylan, thanks so much for that. let's bring in terry haines head of policy analysis at pangea policy analysis. headline announcement took some by surprise others not do you think it will actually come to fruition >> thanks for having me, wilford. i doubt this will actually pass. certainly democrats will want something like this. for me the bigger story here is markets have apparently shaken this off today and there's a lot of happy talk that it will never happen the concern for markets i think
is that it takes months to figure that out. and it's not up to biden biden doesn't have very much political capital particularly with progressives who know the barn door is open are going to be interested in doing not only what president biden has proposed but interested in doing more remember, a lot of these folks who certainly are in the majority of the majority of the house and in the senate as well have wanted to do something that's a whole lot more than this to pay for a lot of these initiatives. and they'll be interested in doing that the other reason why i think markets should slough off the happy talk, frankly, is because the idea is, well, the capital gains increase will go towards the so-called american families initiative that i think probably never gets passed. the problem here is that everybody's looking for pay force for infrastructure right now. there will be this magnetic attraction to wanting to
increase capital gains substantially in part to pay for infrastructure so markets not only aren't oud of the woods on this, i think they're in the woods in this for quite a while. >> i mean, terry, to that point, no tax hike is ever popular. so you're always trying to pick between a set of choices that no one ideally would make when you consider the enormous rise in the value of financial assets over the last couple of decades and how that has gone to the haves rather than the have nots, is this that silly a proposal in terms of where you potentially are going to raise some capital >> i think you frame it well and intellectual or pure policy basis it's not but there will be powerful arguments both from republicans but more importantly from centrist democrats and there still are a few in washington. that the last thing you want t do is start trying to raise taxes just as the economy's recovering firstly and secondly everybody understands that this is not going to pay for everything in
completeness now, that said, i think one reason i think everybody's still going to be in the barrel on this for quite a while is precisely because of this revenue-raising potential and large investors can join pharma in that regard since senior people in congress are now repushing the idea that drug pricing regulation will come, which is estimated to raise another half a trillion dollars over a period of years so there's going to be an awful lot of this to come. what happened with capital gains yesterday is not a one-off and it's not going away i don't think. >> terry, the last administration cared a lot about what the stock market did. they paid a lot of attention and they took their cues treasury secretary mnuchin even said to cnbc once it's a mark to market business, we see how they take our policy. does this administration care? would they read anything into
the sell-off on wall street or take any sort of cue from what's happening in the market? >> their bet is that the economy will go up substantially, a great deal, you all talk about it constantly, so much so that the relatively small amount of pain here is not going to matter that's their bet >> is president biden proving to be less moderate than investors were thinking? i mean, i know he talked about raising capital gains and individual taxes and corporate taxes on the campaign trail, but laying it all out here when we're still fighting covid-19 and fighting the covid-19 economic problems and job losses, the fact it's all coming out, is he dispoingt those who were thinking he'd be moderate and moving farther to the left on some of this economic policy? >> well, i've always thought biden was going to be a creature of his party and his party has lurched substantially leftward so in that sense i think what
he's trying to do is trying to anticipate them and trying to keep them together as much as possible in one sense that's really -- that's no different than other sorts of party leaders would go. but you know, biden had probably the fewest coattails of any major candidate in decades i think. there are few to any -- few to none who think they owe their office to him. and as a result he's not able to really kind of put people along in one particular direction. as a result i think what the administration is doing is playing two or three different kinds of political games at once you notice that every time there's a big initiative that satisfies the left there's a countervailing pull on the right, for example, from biden's surrogate senator coons who's now trying to work on a much more bipartisan and a much
smaller infrastructure package so they're trying to fish a lot of lines at once and trying to see what they can come up with frankly, i think >> terry haines, really valuable perspective. thank you for joining us >> thank you >> the capital gains tax discussion appears to be having a sizable impact on crypto trading. robert frank has that part of the story. robert, just what crypto holders may have to pay if this comes to fruition >> that's right, sara. to the irs bitcoin and the theorem are actually not currencies, they're considered capital assets, which means they are taxed as capital gains, they are highly sensitive to that tax, and of course any potential tax increase if you sell your bitcoin, you have to pay a capital gains tax on the difference between what you paid for it and what you sell it for. so if you bought bitcoin at 10,000, you sold it today at 50,000, you would pay a capital gains tax on the gain of $40,000, which at today's rates would be around $8,000 tax
even if you buy something with crypto, let's say, nft or a tesla, the irs treats that as a sale of the crypto so you pay a tax on any gain of that crypto that you use for the purchase if those tax rates double to over 43% as we've seen proposed by biden, that could mean big tax bills. in california, for instance, if the combined state and federal tax rates for bitcoin sellers goes to where biden wants it it would jump from 33% to 56.7% in new york city that rate would jump to over 58% now, none of this may happen but many early crypto investors are sitting on gains of millions if not billions of dollars they could be selling now just in case some of these tax increases go through or there is even any increase in that tax again because some of the huge gains that these crypto holders are sitting on right now >> always a nice problem to
have, though, sitting on gains but robert, the quick follow-up question is do we think that bitcoin holders are aware now that they would have to pay tax in a way that a year or so ago, two years ago perhaps, some of those people who may also have been first-time investors maybe hadn't quite realized that it was going to be capital gains taxable in the first place >> it's unclear. the irs commissioner charles redding was on the hill last week and he testified that one of the reasons the u.s. has a trillion-dollar tax gap, that means that there's a trillion dollars of taxes that are going uncollected every year-s because of bitcoin tax avoidance maybe we can say that these are folks who just don't know the tax law or maybe they're deliberately avoiding it but either way, it appears according to the irs that very few crypto holders and sellers are paying the tax right now, and so maybe with the combination of the irs saying we are going to crack down and number two, the rate could go
up, maybe they're becoming aware and also aware now of that tax increase >> robert, thanks so much for joining us we'll talk much more about the potential tax hike and the impact on markets when we're joined by former fed vice chair alan blinder that's later in the show and after the break boston beer chairman jim koch will join us to talk earnings, hard seltzer, and america's reopening and what that means for beer businesses generally. you are watching "closing bell" on cnbc.
boston beer, the company behind brands like dogfish head and sam adams on a tear this year the stock is up over the past 12 months stongly ly and crushing l street expectations over the first quarter. the pop we saw earlier in the session, about 8% higher, has faded down, up 3%. the company saying its truly hard seltzer brand reached 28% market share accounting for approximately 40% of all growth
in cases in the hard seltzer category joining us now first on cnbc is boston beer chairman and founder jim koch jim, welcome back to the show. good to see you. >> plash to >> pleasure to have a bear with you, sara. >> i'm so envious when you do that >> you're having a beer. we have to wait until 5:00 p.m >> you've got to change the name from "closing bell" to "last call." >> i like that i like that. if it means i'm allowed a beer i'm interrupting your interview, sara >> no, all good. maybe it's like an ending segment. 60% growth in the shipments, jim, very impressive especially because it's not summer yet and this is a category where there's so much competition. everyone and their mother's getting in on the hard seltzer gain how are you maintaining the growth in the market share >> you know, it's kind of what we've always done. we were, you know, the innovator and the leader
we had the first hard seltzer five years ago and we've basically -- it helps to get in first. we have a very aggressive sales force and we've very much focused on adding flavors and kind of expanding the taste profile of hard seltzer with things like truly hard lemonade seltzer, hard tea seltzer, and in a couple of weeks we're introducing our latest innovation, which is truly hard punch seltzer. so it's leadership, aggressive grassroots kind of selling, and you know, development of new delicious flavors in the seltzer category >> one concern that came up in the earnings or the call, jim, is that there's so much demand for it right now that you might have trouble keeping up on the supply side and have to enlist third-party breweries which
could impact margins how likely is that >> i hope it's very likely that we have trouble keeping up. you know, we have enough capacity to meet our current plans and our projections but i'm okay if we exceed those and if it affects margin because boston beer company has really been about innovation and growth we look at our opportunities as opportunities for growth in a category that's not growing. and we every year have to figure out how to grab market share because the category isn't growing. and it's not that easy everybody's bigger than us we compete with these huge global companies but we've been able to maintain an entrepreneurial culture and agility that has enabled us to
grow for 37 years. >> jim, to that point, i mean, as you said, you've added tea. you're adding punch. how many more versions of truly can you add over the next year is it just sort of endless, you'll keep coming up with new ideas or have we nearly got a full suite of seltzer offerings now? >> well, i think it's closer to a full suite i mean, we are not trying to justkeep throwing stuff into the market what has enabled sam adams, boston beer company to be successful here, is we've had meaningful innovations well, our hard lemonade was the number one seltzer innovation last year. and it's still growing this year hard tea is the number one seltzer innovation this year these are products that have very broad appeal. i think what we're seeing is there's sort of a blue ocean in this space you know, creating new beverages
that are kind of in between beer, wine, and hard liquor. and they meet consumers' desires for great-tasting products in convenient packages with health and wellness type nutritionals and appealing brands i see a lot of opportunity in that space, but we're trying to only do things that are meaningful rather than gimmicks that come and go >> on the other hand, there's the beer business, jim, what do you predict as bars astarting to reopen around this country and abroad >> yeah, i think there's good news there our beer business like samuel adams, dogfish head, angry orchard hard cider, was
negatively affected by covid because all three of those brands are very big brands in bars and restaurants, especially in draft and when covid hit the bars shut down and they haven't fully reopened there's a few bellwether states like florida and texas that are actually now in many cities running higher than 2019 so i'm very optimistic i think we are kind of at the end of living this covid lifestyle. and people are ready to go out they're ready to be together the beer and cider and hard seltzer are just part of people enjoying each other's company, enjoying life. so i'm very optimistic that this summer's going to be a very
successful summer. i'm now having sam adams summer ale. we released it a few weeks ago, immediately ran out of stock, had to fire up the brew kettles to make more and those sales for sam adams summer ale are running well ahead of our projections and expectations that's telling me people are ready for summer >> stop rubbing it in, jim we're well aware you're sipping on a delicious cold crisp lager there. jim, final question. beer might bounce back as reopening takes place. what about total alcohol consumption across all categories do you think that the pandemic boosted that and therefore it might plateau for a few years, or do you think reopening helps all categories >> it's hard to tell i mean, what happened is people couldn't go to bars and restaurants. so they drank more at home they actually spent less by about 20%, spent fewer dollars
on their alcohol consumption because they traded buying a six-pack of sam adams for 10 bucks versus buying a pint of it for 6 or 7 so they spent less money on alcohol, significantly less money, but drank a little bit more so i'm hoping that they were able to find opportunities to enjoy, you know, at the end of a long day of zoom calls where you feel like some kind of protozombie, it's nice to have a drink. and that may continue as people work at home but we're not going to have the big bump so the thing to look at is where are we versus 2019 and i'm going to guess alcohol consumption will be up somewhere between 2% and 5% over this two-year period. so it might set a slightly
higher threshold >> the kococktail delivery from new york restaurants has been a hit in this house. jim, enjoy your beer appreciate it. >> i love drinking with you guys >> last call today >> last call >> wilfred, for our first segment i think we should be discussing arsenal in our last call today how about that >> drowning our soreos with that story this week. the other bonus to that story just quickly, we've talked soccer every day this week on a business show. wonderful. silver lining. >> which tells you how big of a deal it is exactly. all right. we've got 35 minutes left to go in today's session we are at session highs and tracking for a record close on the s&p 500, which at these levels could also mean that we would close in positive territory for the week a nice little surge here into the close. 1.7% higher on the nasdaq. after the break listen up. shares of spotify jumping today and adding to big gains over the past year as one firm gets bullish on the stock despite
welcome back we've got breaking news on the energy industry. tank has it for us >> california governor gavin newsom tweeting out that he's seeking a ban on all oil fracking in the state by 2024 and a complete ban on all oil extraction in the state by 2045. gavin newsom sending out that tweet just a short time ago
saying california is now the first state to declare an end to oil extraction in the country. today announcing we will phase out all oil extraction as part of a world-leading effort to achieve carbon neutrality and ban fracking by 2024 just for context in california in january they averaged 364,000 barrels of crude per day that's including to the energy administration and also some background here. the legislature, they've actually voted down a similar measure last week but again, the governor saying he may try to do so through administrative action wilf, back over to you >> i'll take it, frank energy stocks staying higher, up 1% as a sector thank you. shares of spotify are jumping as well. they've more than doubled over the past year. our julia boorstin has a look at what is driving this name higher today. julia. >> well, sara, spotify getting a boost today from jefferies initiating coverage with a buy and also a $360 price target on the stock saying "spotify is more platform than streaming service. platforms have stickier
customers, less likely to be disintermediated by new technologies and longer tail of growth margin expansion. now, they go on to say that they believe spot li will become the primary audio platform for creators." the stock also getting a boost from a "wall street journal" report that spotify will launch a podcast subscription tool that will let podcasters set prices spotify has said in the past that it's developing and testing different tools for its creators to be able to make money from the 2.2 million podcasts that are on the platform. emarketer does forecast that spotify's u.s. podcast leadership will overtake apple's this year, and i expect the company to make a podcast-related announcement next week at some point before its earnings, which are on wednesday morning. wilf >> julia, thanks so much time for a cnbc news update. courtney reagan's got it for us. hey, court >> hi, waifl, good afternoon derek chauvin's sentencing date has been set for june 16th sentencing guidelines call for
up to 15 years for a person with a clean record prosecutors and the defense teams have until next week to submit their arguments for more or less time in prison ghislaine maxwell has pled not guilty two new charges of sex trafficking. she's appearing at her first in-person court hearing since her arrest last year find out where her case goes next tonight on "the news with shepard smith. an aircraft carrier "uss eisenhower" will stay in the middle east to provide protection for allied troops withdrawing from afghanistan the taliban insists washington stick to the first withdrawal agreed to by president trump instead of president biden's september 11th deadline. and university of michigan is requiring covid vaccinations for all students living on campus in ann arbor. university of michigan is the latest in a growing list of schools requiring vaccinations sara, as a big ohio state fan it's hard for me to even say
university of michigan >> you can't talk about mi michigan courtney reagan, thanks. that school in ann arbor 30 minutes to go in the markets and we're looking at session highs. the dow's up 300 points. the s&p 500 is on track for a record close still to come, the ceo of cushman and wakefield will join us as his outlook for the commercial real estate market as people start returning to work plus our friday checkup with dr. scott gottlieb is right around the corner perfect day to talk to him as a group of cdc advisers is meeting to discuss as we speak to discuss the future of the johnson & johnson vaccine in the u.s. bonds, yields are a bit higher today. we've seen that are the risk appetite higher stock higher yields 10-year at 1.56% nothing keheli t 170s we were seeing a few weeks ago we'll be right back.
before the bell. up 1% on the dow 327 points goldman sachs, united health care, microsoft adding the most to the dow gains we've got most groups in the s&p 500 higher as well and chip stocks are leading technology and the nasdaq higher despite intel's loss, as you can see there at the bottom of the dow. straight ahead we'll talk to the ceo of real estate giant cushman & wakefield how working from home has impacted the commercial real estate market and what returning to the office could look like. that's next. and as we head to break check out shares of laser tech company microvision, a ton of interest on wall street the reddit community picking up on this one. we'll talk more in the next hour about some of the other hot names that are grabbing attention of the meme crowd. this is still very much a thing. nasdaq's up almost 2%. we'll be right back. sales are down from last quarter but we are hoping things will pick up by q3. yeah...uh... doug? sorry about that. umm... what...its...um... 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. labradoodles, cronuts, skorts. (it's a skirt... and shorts) the world is going hybrid. so, why not your cloud? a hybrid cloud with ibm helps bring all your clouds together. that means you can access all your data, modernize without rebuilding, and help keep things both open and secure. that's why businesses from retail to banking are going hybrid with the technology and expertise of ibm.
22 minutes left of trade over the last several years one of the big fanatic trades within the commercial real estate industry has been in communications infrastructure and data warehousing but this year there was a big shift let's bring in dom chu for a closer look at the real estate sector, dom. which names are you watching >> it bears witness because it's only 2 1/2% of the s&p 500
the smallest sector. but the third best performer in 2021, sara if you look at the overall performance of that real estate sector, it's up 16% versus the s&p 500's 12 in just this year alone. now, the biggest players within this commercial real estate, real estate world happened to be some of the names you just mentioned here american tower, wireless cellular infrastructure. pro loggis, a big owner of warehouse space, think fulfillment space. crown castle also wireless infrastructure and equinix is an owner of data centers and co-location centers. many folks involved in high-speed trading on wall street know what that's all about. if you take a look at the best performing ones so far a handful of them are helping to lead the way higher simon property is a retail, yes brick and mortar retail has surged back from the pandemic lows simon property owns high-end malls. iron mountain,'s you know them document management. they do a lot more data management these days as well. cbre, cb richard ellis, a lot of commercial real estate owning
and operating those types of assets extra space storage also up 27% so far this year yes, people still storing stuff, managing documents and yes, retail is back, wilfred. that's one thing to watch in commercial real estate we'll see if that trend continues. >> dom, great stuff. thanks so much have a lovely weekend. meanwhile, as companies start to make plans to return to work some are already looking to unload office space. joining us now in an exclusive interview cushman & wieckfield ceo brett white. the company manages over 4 billion square feet of property across various countries good to see you. thank you so much for joining us i guess the first general question is where are we in this cycle? have things started to bounce back for you and are you optimistic that there's a long way still to go? >> we're very optimistic with the signs, wilfred, that we're seeing in the marketplace right now. we're going to talk a little bit in a moment about australia which we think is a great example of what may be coming here in the u.s. and western europe but we've seen transaction velocity begin to pick up, we've seen activity in the marketplace. all of this direct ly related ad
dependent on levels of vaccination or in the case of places like australia and new zealand total lockdown and no covid cases. but yeah, things are definitely a lot better today than they looked 12 months ago at this time >> that said, brett, i wanted to ask a little bit about office space. in his recent shareholder letter the chairman and ceo of jpmorgan jamie dimon said that we'll move to a more open seating arrangement and as a result for every 100 employees we may need seats for only 60 on average this will significantly reduce our need for real estate the reason i pull out that particular quote and example is that this is a company that says less than 10% will actually be fully work from home and yet their real estate needs falling 40%. that sounds like a huge warning sign for office space. >> well, i think first of all i'm not sure that what jpmorgan meant was that they would reduce their footprint by 40% certainly not now.
it may be very possible that in a certain location that's possible let me tell you generally what the industry is saying right now, what corporate ceos are talking about planning we're looking at something like a 10% to 15% reduction in demand of office space. we're looking at a lot of large companies on average are talking about 10% to 15% reduction, not numbers as big as 40 now, there are others that may be fully remote in the future but there are many, many other firms who aren't going to cut a square foot right now. and really it's a mixed bag. as we think about the immediate near term as i mentioned we're looking at about a 10% to 15% reduction in demand of office space. but wilfred, it's important to remember that over the next two, three years that will be fully mitigated by the creation of new jobs in the u.s. economy and the global economy will produce. we think by the way that the 3 million office working jobs lost in the early months of the pandemic will be fully regained
by the fourth quarter of this year >> what are you going to do with all that real estate, brett, that less demand means you're going to have some empty space >> you know, again, it's just not that simple, sara. so first of all, let's look at what's dragging the market down. companies like jpmorgan who said on park avenue we were going to take a million square feet, now we'll take 600,000 square feet by the way, i made that up, i don't know if those are the right numbers. but then you have a situation like facebook going to the west side and taking 2 million square feet of space they didn't occupy before so it's important to remember that the office market, commercial real estate market is driven by multiple dynamics. right now we've got the lessening of space because of covid and a different style of working. remote work and office work. but then also we have this economy now absolutely roaring back and creating new jobs so yeah, you'll see buildings that have more vacant space this year and probably next year than they've had in a long time, but
in the midterm, two to three years, that space should be taken up again >> what about safety protocols, brett? and i realize it's not necessarily always your choice because the companies themselves have to set the policies but what are you guys thinking as far as what's safe in return to office? vaccine requirements, testing, if you're not vaccinated how does all of that work? getting thousands of people up an elevator into the same building every day >> well, it's a great question because even though in many cities we're beginning to see a large percentage of the workers being vaccinated most companies are remaining with covid protocols. so the same rules we've had the last year continue to apply even in situations where you may have six people in a conference room who have all been vaccinated most companies are not relaxing those standards at this moment so the same safety protocols we saw the last year, six feet of social distancing, the
plexiglass dividers on many of the office cubicles, the restrictions on how many people can be in the building, those protocols are remaining in place right now. and my best guess and it's only a guess-s we're not going to see those relaxed until it is declared in a country that herd immunity has been reached. now, here in the next two or three months we're talking about herd immunity. you have a guest coming on very shortly, you can ask him we're talking about july herd immunity i think post labor day in the u.s. you'll begin to see a material relaxation of those safety protocols to a new new. the new new will probably be a hybrid of the total freedom we had before and the protocols we've experienced the last year. >> brett white, thanks so much for joining us good to see you. >> thanks, wilfred good to see you too. sara, thank you. >> dr. gottlieb. >> express and kimberley clark sinking after reporting full year results we'll break down thoseov mes next in the market zone. just under 15 minutes left to trade.
bike shop please hold. bike sales are booming. you need to hire. i need indeed. indeed you do. the moment you sponsor a job on indeed you get a shortlist of quality candidates from our resume database. claim your $75 credit when you post your first job at indeed.com/bike. did you know that geico's whole 15 minutes thing... that came from me. really. my first idea was “in one quarter of an hour, your savings will tower... over you. figuratively speaking." but that's not catchy, is it? that's not going to swim about in your brain. so i thought, what about... 15 minutes. 15 percent. serendipity. 15 minutes could save you 15% or more on car insurance.
can your internet do that? this is work! this is hard! now xfinity delivers wifi speed faster than a gig. that means you'll have gig speed over wifi to power a house full of devices. learn more about gig speed today. this is how you become the best! [music: “you're the best” by joe esposito] [music: “you're the best” by joe esposito]
[triumphantly yells] [ding] don't get mad. get e*trade and take charge of your finances today. is-11 minutes left in the trading day. commercial-free coverage of all the action goen toyotas close. today we've got stratdegus's chris ballone. rebounding after yesterday's big sell-off record close watch for the s&p 500. just around those levels right now which is chris is also interestingly break even for the
week on the s&p 500. it looks like it was going to be a bumpy one. we got the cap gains news which the market didn't take well and here we are. rebounding strongly into the close. what's driving it? >> you certainly have to tip your hat to the market here. in a week where the news wasn't that great to respond at the end of the week and go out at the high i think is certainly impr impressive with pretty good breadth 5-1 on the upside today. i think the big everpicture question investors need to ask themselves though is today's the 13-month anniversary off the low. when you look at the other two examples where we've seen markets rally this magnitude in that first year off the low off the 82 low and the 2010 low, that this is about when the market began to pause. so just going into a weaker seasonal period i do want to take my foot off the gas here just a little bit knowing what the historical comps tell us >> american express shares under pressure after a revenue miss. kate rooney's got those details for us hi, kate >> a slum np travel and entertainment spending on
american express cards overshadowing some better than expected earnings. amex revenues did miss i spoke to ceo jeffrey campbell this morning he highlighted strength in goods and services as well as online and e-commerce spending and domestic travel and entertainment. he says, "finally hitting an inflection point." in march, for example, global spending on travel and entertainment was up 40% versus february but international restrictions are still hurting those lucrative cross-border payments. he said amex will likely get back to prepandemic earnings by early 2022 but business travel could take a lot longer. guys, back to you. >> kate, thanks so much for that one. sylvia, what's your take on amex >> so amex is expected to have a 15% drop in eps and also drop in revenues they beat there, which was really good. they got a bump in earnings because of the 1 billion of credit loss write-off. you know, they signed up 2
million users. they have the cabbage program, signed up 14 million new vendors in china they're getting into crypto with falcon x but overall consumer spending was up 11% mient t and e i think what this borders reopen, travel picks up, entertainment picks up they get a lot of that money back i think it's a good buy now and the reopen and sort of continuous good news around vaccines, stimulus, checks, consumer spending retail sales in march were just absolutely outrageous so i think that would benefit amex this year they're up 22% year to date. 75% year over year i do like the stock here >> it was a tough quarter for consumer products giant kimberly clark. that stock sinking today after reporting a quarterly miss on both the top and bottom lines. also lower guidance. the maker of huggies diapers and scott's toilet paper delivered its worst sales performance in at least a decade citing inflation, continued shutdowns and fallout from consumers hoarding toilet paper last year as reasons for the weakness.
kimberly-clark reducing its revenue forecast and cutting its eps outlook which was expected to happen but the numbers did come in worse than originally expected we hoarded too much toilet paper and so we just aren't going out and buying it. and that goes for kleenex tissues, scott's, cottonelle, those are all of their brands. png also raising prices like kimberly-clark but kimberly-clark getting hit on margins on some of those higher input costs. they also had supply chain shutdowns. this stock down 6% a lot of the macro themes we talked about impacting them. how do you view a stock like this and broader consumer staples which did benefit so much from all of that hoarding and is starting to feel the aftereffects now >> i think it speaks to the idea of just from a chart perspective that bad names and bad trends when they print bad numbers they get punished and that's what's happened here. you look at the broader staples group i do think what is telling, despite kind of a risk off taper over the last six
weeks staples really didn't outperform much of anything, that's with 3w07bd yields coming in lower always ask the question is the group responding as it, should that bond yields come, in you had some risk off tone and the staples didn't work. we think they're a sale here kimberly-clark is a sale here as well >> the dow pulling back off its highs by about 100 points, now up only 230 points up 340 moments ago one stock that is in particular weighing is intel. down more than 5%. here's ceo pat gelsinger addressing the global chip shortage on last night's earnings call. >> the unprecedented demand for semiconductors has stressed supply chains across the industry we've doubled our internal rate for capacity in the last few years but the industry is now challenged by a shortage of foundry capacity, substrates and components we expect it will take a couple of years for the ecosystem to make the significant investments to address these shortages >> sylvia, stocks on discount,
new ceo, good buying opportunity? >> again i like it i think if you look at the semiconductors, nvidia and amd got a lot of attention intel's more of a slow and steady growth story. massive global chip shortage means there's huge demand, not enough supply, so preeces will likely rise there. and i think it's the 5g story, the machine learning, the quantum computing. biden is going to pass an infrastructure bill. so much of that is going to go into supposedly connecting rural and urban america. and chips have a big factor in that and a big role in that. i think that intel is well poised and just the semiconductor industry in general is just very well poised in coming years. but slow and steady on this one. >> how about snap? shares getting a big pop after better than expected quarterly results. julia boorstin with the details. julia. >> well, sara, snap reported its fastest user growth and revenue growth in over three years of 15 million new daily active users
added in the quarter a surge of engagement with spotlight user content as well as a 40% increase in daily engagement with the augmented reality lenses the company was also bullish on advertising despite apple's new operating system limiting its ability to target ads. and the reopening here in the u.s. seems to be driving engagement with story posting as well as with engagement with the snap map this is something analysts see as a real potential revenue driver down the road and despite the fact that the stock's up about 280% over the past 12 months, over 70% of analysts have a buy or overrate rating on the stock. guys, back over to you >> julia, thank you very much. just want note that we've lost a bit of steam here in the markets, down 100 points from where we were just a few moments ago on the dow, which is only up now 222 points still looking at a strong finish but coming off those session highs as we go into the close. four minutes left. sylvia, just quickly on snap,
chris says it's always good to see a stock react well to good numbers. and these were good numbers. from users to improving profitability and revenues how do you view the stock, which has already had such a tremendous run-up? >> i absolutely love it. 280 d.a.u.s. 4.4% million beat on the expectations there they seem to be out of the headlines in terms of privacy things, regulatory types of things, with advertising picking up, with that massive user base i expect them to see some growth there. they're calling for 80% in free cash flow or growth this year. so i just love the name. i think they've got the teen market i don't think advertising has even really begun to sort of capture the types of revenues and gains that they're looking forward in the future. although it's up i still like that name. >> chris, what does this chart look like you to in can it keep this amazing 200-plus percent momentum over the last 12 months >> pouting more of a skeptical cap on here, i know the stock's up today i actually don't like how it's acting today with good numbers it should be
up more. it's not at a new high if you look at how its peer group has responded over the last number of weeks, small cap and mid cap growth really has not been involved in this last little rally at all. i think the relative strength of some of these names is going to falter put me in the skeptic camp >> chris, i'm just looking at what's working in the market as we head into the close it's really value over growth. small caps are the winners today. financials and materials are leading the market they both are up technology is higher as well so is the nasdaq where did the charts come down for both of those groups do you favor value >> i do. and i think if you look at the last five or six weeks as growth attempted to mount some type of a stand frankly the rallies were pretty tepid a lot of the growth stocks did not go on and really outperformed any meaningful degree and i think very importantly you mentioned materials. materials are starting to reassert themselves here what that tells us about the dollar, riot we're having this conversation is dollar trades almost back to its low. i think dollar rolling over i think that's bullish for these global material names.
>> as we head into the close here, up -- go ahead as we head into the close here, there's the nasdaq it's up 1.44%. as you can see just a little bit off the highs. we're still looking at a strong close. most sectors in the s&p 500 are higher the only ones that are lower right now are consumer staples and utilities. the defensive groups financials are leading today the regional banks and the big bulge bracket firms are all having a good day. yields are a bit firmer. perhaps a help there and just digestion of better earnings across the board. we continue to see it out of many different sectors and you can see the earnings weakness reflected as well if you look at the dow, the biggest losers are honeywell, intel and american express those are earnings stories the winners, goldman sachs, boeing, microsoft, unh those are adding the most. there's the russell 2000 index of small caps up 1.8%. and coming back in a big way after being under a little pressure right now looks like we're going to go out with a gain of at least 1% for
the s&p 500, for the nasdaq, not as much for the dow. if you look at the week to date we're pretty much flat here. for the s&p 500. which does break a win streak. the last four weeks we have seen gains for the s&p. we're lower overall but not by too much considering some of the headwinds including that capital gains fear from the biden administration, reports of it yesterday. dow finishing higher 226 points. >> pretty much flat for the week but negative for the all three of the major averages for the week as a whole but over 1% of gains for the s&p in today's session. welcome to the "closing bell." wilfred frost along with sara eisen. as just mentioned, the dow closing up by 227 points or 0.7% but off its highs about half an hour earlier, 331 points the s&p up 1.1%. the nasdaq at 1 1/2. all three of those indices lower by less than half a per yent-cent for the week as a whole. financials and materials and
tech were all up with 1 1/2% two sectors lower utilities and staples. coming up former fed vice chair alan blinder on how fears of high corporate and capital gains taxes could hit your investments and the economy. plus j&j shares closing higher ahead of the cdc advisory panel's decision on its covid vaccine pause. we'll bring you that outcome as soon as it's released. chris ver rone from strat gus partners is still with us as is sylvia jab lonsky. and joined now by courtney gibson from luke capital as well christopher, just on that sort of finish there we talked about the sort of highs of the session when you joined us obviously closing off those. negative week. but decent end to the week regardless >> decent end to the week. little best a curious week you saw this rotation back to risk sitting at about 155, 160 range where they've button last two weeks. what we're trying to figure out here is how much good news is already priced into this market
and does the contraction in bond yields over the last few weeks, reflect the idea we might be approaching peak data? and i think that's a consideration investors are going to have to think about over the coming weeks. this collision between expectations and reality it is very easy to exceed expectations the first year off a low. that gets more dhaji ingchallens the market cycle matures. >> courtney, you bought coinbase today? it's interesting because it hasn't done that well since the ipo. it's been down today, closed lower again today 291. it opened what, 385 when it started trading and bit coin gets hit hard on some of this concern about capital gains. why did you buy it >> i bought it exactly for the reasons you just mentioned i mean, when you think about coinbase and transformational activity that it's going to bring the market, you want to be
in that's around 284, 283, i said -- it's rallied it will come back. it does trade a bit -- because obviously it -- with crypto currency but this is -- when we think about -- >> we're going to try and fix kourtney's mike in the meantime. but i wanted to come to you. the general pullback didn't apply today but the general pullback in cyclicals of late despite the very strong economic data and some of those cyclical companies announcing pretty strong results what did you make of that? >> i think that you know, we're in an interesting market second year of a bull market about 80% off of march lows. and you know, we have seen the most dollar reads we've had in a long time for pmi, retail sales, jobs numbers, vaccinations,
things like that i think the market overall has sort of brought in, the breadth of the bull market has brought in and we've seen a lot of allocations out of the growth stock into -- a little bit into value and people sort of picking up cyclicals on the dips but i just think that volatility is sort of par for the course this year. i expect this to be a great year but probably with a little bit slower growth than the year prior. and i think that these opportunities on the pullbacks to sort of get back in and keep your portfolio diversified are great. and also new ideas as courtney was talking about with coin. i love the idea of sort of the future of payments and crypto and things like that too >> if you're looking for a reason to be bullish on the economy and what's ahead, chris, the dow transports continue to hit new highs. up again another 1.4%. how do you read this one >> i think it's important. if you think about a lot of the names in the transportation group, frankly many of them paused for the last four or five months the road and rail names.
the air freight names. fedex, ups they took six months off it's only in the last couple weeks we've started to reassert themselves if we think about how the market is interpreting the economy that's a message we like on the leadership from the transports on the other side of that i would also say frankly the relative indifference from utilities and staples despite bond yields coming in was definitely an interesting message. they bounced for a few weeks but i would hardly call them dominant leadership. >> talk to us about the chart for bitcoin, the the pullback we've seen and whether that's going to prove to be a major test in the start of a bigger pullback >> we have one rule when we talk about bitcoin is keep an open mind, not imaginative, be flexible because we don't know no one knows what i think's important here is thinking about bitcoin through the lens of a liquidity channel and if you look at really the last year the strength in stock has been coincident with the strength in bitcoin. i do take some note here that
you have s&p at new high and bitcoin not quite there. i think we're going to learn a lot about this in that 55,000 to 57,000 rain nj bitcoin a rally there and a failure might be a commentary that liquidity conditions are actually tightening, that risk appetite's coming out of this narkt. i look at it from that perspective. what is bitcoin telling us about risk appetite and liquidity? >> down 17% in the last week courtney, we know you like coinbase and you bought that today. but sounds like overall you're getting a little more cautious are you trimming positions if so what and why >> it's really interesting, sara if you think about where we were last year this time, it's a -- i think my sound is off again. can you guys hear me >> oh, no, you're good we hear you. >> all right awesome. but you think about where we were, and a lot of those names are at 52-week highs, right? you're up over 100% in some of those names. the names that i trimmed, i
still am a firm believer in. it's just that i decided to hedge a little bit because there are some potential warning signs that we're hearing in the marketplace that could occur you have some really big headliner names from, you know, the rick reeder's at black rock or scott minor at guggenheim very, very smart people with their hand on the pulse of the market that are saying we could get a near-term pullback so with that i wanted to have a little capital on the sidelines, take some of my winnings off the table, not completely extinguishing positions in names like blackstone, kkr, the facebook, square, paypal, again, names long term that i love but being able to have a little bit of capital on the sidelines to do things like pick up coinbase. at loop capital we have a $394 price target on the name and candidly, i actually think it could double from here with ease now, obviously the volatility with bitcoin is going to play into it. but if you can think about the
long-term story with coinbase you can obviously buy into the story. we think about the positives on the flip side of this market right now. liquidity is again just plentiful in the markets you look at the fed being on hold i believe them when they say they will be on hold till 2023 you have to listen to what they're telling you. they're not going to signal to the market and as people want to talk about the pivots it's not going to happen. covid cases are lightening in the u.s. hopefully we begin to continue to see that across the globe we know what's going on in emerging markets i hope that continues to hopefully taper, not increase. and earnings have actually been very good vis-a-vis the comps you saw last year. in some names it was just impossible to expect a netflix to come back the way folks were expecting it to come back but long-term netflix has a tremendous platform. again, i'm cautiously optimistic about this marketplace and i think you have to be realistic about expectations as we move forward. >> netflix, by the way, closing
down again today bucking the overall trend higher for tech and the market. speaking of covid, a cdc vaccine advisory panel is meeting right now on the johnson & johnson covid vaccine pause. meg tirrell with the latest. what can we expect, meg? >> sara, it does sound like they are trying to stay on time here. this is expected to conclude around 5:00. so we could get a vote on this updated recommendation within the hour and what it really sounds like is the panel here is leaning toward recommending unpausing the vaccine and now debating whether they should just do that with a warning attached to it about these very rare clots or if there should be something specific to women under 50 here are the updated numbers we have about 8 million doses have been administered of this vaccine in the u.s. before the pause. they now have identified 15 cases of these very rare clots, all among women. these are clots that come with low platelet counts. among those 15 cases they did observe three deaths and the rates are very different
for women under 50 for this rare blood clot versus women over 50. it was 7 per million for women 18 to 49 and less than 1% million for women over 50. and again, they have not identified any of these cases in men. however, they are looking at some cases in men, so they're not ruling that out completely so what they're debating now, it sounds like is whether they should just unpause with a warning in general or if they should also say there is an elevated risk for women under 50 and people in that category should consider or may consider a different vaccine. so guys, we will see where this vote shakes out. and then it will be up to the fda to update what they do with this vaccine but we do expect this could potentially get unpaused as soon as this weekend. back to you. >> meg, is there any evidence these women were taking birth control pills? is that something they're looking into which also carries a risk of higher er clots just thinking about the age
demographic there of women below 50 >> yeah, a couple of them were but none of the risk factors they've identified, which also include obesity, they said were strong enough to say that it's absolutely a risk factor but it is something they're looking into and the case numbers are just so small right now, just 15 to try to parse this out. so they say none of these things can really be definitive at this point. >> meg, thanks so much for that. just rounding off the market discussion, chris, we haven't gotten to gold yet what's your taketake on that i know you were bullish a couple of times ago >> i think there's two things going on with gold number one, from a contrarian perspective you have seen flows just totally washed out on gold. big difference on what this looked like, say, eight mods ago. we like it from that perspective. it's starting to firm with good data and we always pay attention when things don't go up like they should. since the last couple weeks you've had 65 pmis, 10% retail sales. that's not an environment you would expect gold to firm.
it's piqued our interest it's starting to work despite that. look at some of the gold skokz newmont. royal gold franco nevada firming as well. >> dollar was down about .8 of a percent this week which is helpful as well for gold thank you all for joining us here on a friday chris verrone, sylvia jablonsk sxichlt kourtney gibson. one manager says he's having trouble finding value in this market although there is one stock he likes right now he will name names plus, former federal reserve vice president alan blinder on how potential hikes in the capital gains and corporate tax thtes could impact the markets and e economy. we're black r back on "closing bell" in just 90 seconds
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 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 calvert.com/earthday.
. off the session highs. closing the week with slight declines, down .1% on the s&p for the week but up 1.1% for the session today. joining us now, david giroux, portfolio manager at t. rowe price's capital appreciation fund david, thanks for joining us good to see you. based on your notes it seems like you're finding it hard to find many things you're confident will appreciate going forward. >> no, i think that's fair it's funny, you know, you think about the last 15 months, being on your show four or five times, there's always been an area where there's really good value. in march it was cyclicals. in june of last year it was
covid losers and in kind of october it was banks. last time carp stocks and utilities looked really attractive and even those have run 15%, 20% this is the first time there's not any place i can see there's really great absolute value in the marketplace. really for the first time in the last 15 months it's a little bit different. there's still relative value, right? but not really great absolute value like in the past there's still relative -- go ahead. >> i was going to say does that mean you're much more defensively positioned or much higher cash values than normal >> yeah, actually, it's funny. it's the first time in the last 15 months where we're actually underweight equities we went overweight equities march 10th of last year. we've been overweight equities almost all through the last -- since that time. it's really just in the last two or three weeks we've kind of gone 100, 200 bips under weight
equities we're having trouble finding good things we feel good about on an expired year basis today >> it's interesting to hear you say, it david. we have value fund managers on all the time here and they reiterate their case for value their this is their time which we've seen in the market, this is their year and part of the defense even with the run-up is well, we've underperformed for the last ten-plus years. so there really is still room. you don't feel that way? >> well, remember, values underperform for two reasons one, value is not kept up from an earnings perspective with growth about half the value universe is kind of secularly challenged right? multiplicity compressed earnings growth compressed -- when we talk about value versus growth i think it's kind of a artificial constraint i kind of think about value not facing secular challenges. like regional banks or industrial companies, utilities. and then you might think about
the secularly challenged companies. there is good value probably on a re689 baesis still in parts of that value universe, whether it be utilities, regional banks, select industrials but there's not great -- i think it's a little hard to make the case for value that looks really attractive -- again, a lot of the traditional value sectors, whether they be retail, banks, have all had really nice runs over the last nine months. and trading much higher valuations than they have in the recent past. >> you do have one top pick, which is ge. why? >> we still like ge. ge's had a nice run from the bottom it traded under $6 at one point in the downturn. but if you look at it, if you have a three to five-year view, ge's going to become a lot less complicated in three to five years. ge's capital has shrunk or been in the process of being shrunk to almost nothing. we have a high degree of confidence that ge will do something with its insurance
liability. and really what you're left with is three or four really good businesses and a-plus businesses, an aircraft engines business that is poised for a really good recovery and really good ten-year run. great health care asset, a renewables asset and kind of a cash cow power business. you look at where their comps trade on earnings, in a couple years there's still significant up side to the ge story for investors who are willing to look three to four years out like we are. >> well, we're certainly nowhere near the levels going back 10, 15 years on that stock but it has doubled over the last year david giroux, thank you very much for joining us. >> my pleasure >> looks like millennials are changing up their previous pandemic trading habits. kate rooney here with a closer look kate >> hey, sara, we've got some new data showing a pivot in what younger traders are buying as the economy reopens. in the first quarter so-called
meme stocks, amc and gamestop, ranked among millennial and gen z's top holdings gamestop coming in at number 4 amc was number 7 that was after not making the top 100 in the prior quarter this according to apex clearing, which looked at 3 million accounts from its brokerage partners younger investors, though, are still committed to tesla that's their number one stock. followed by apple and amazon those have been a top three since 2019 meanwhile, they dumped some of those so-called return to normal trades those have been among younger investors' top holdings last year airlines and cruise lines moved down on the list as well as vaccine makers as far as some other yolo trades, or you only live once trades, microvision, that moved up to number 40 on the list in q1 after being unranked. that stock is soaring this week and it's trending on reddit and twitter as well. guys, back to you. >> a little yolo and fomo
combined there kate rooney, thank you >> exactly >> up next on the show, former vice chair of the federal reserve alan blinder on when he thinks the federal reserve will start raising interest rates and how a potential hike in capital gains taxes could impact the market and the economy plus a major wall street firm is issuing an apology for its role in the super soccer league debacle details you know coming from wilfred later on "closing bell." and april is financial literacy month. cnbc is committed to sharing messages from business and thought leaders about the importance of financial education. here is new york stock exchange president stacy cunningham >> the american dream is not only about being able to start a business and earn a living it's about sharing that success too. it's a story of shared success and every day here we see companies coming in, changing the world, and allowing investors to dream alongside them financial literacy is such an important part of that so investors know how to take
advantage of the opportunities that are out there for them. wealth is your first big investment. worth is a partner to help share the load. wealth is saving a little extra. worth is knowing it's never too late to start - or too early. ♪ ♪ wealth helps you retire. worth is knowing why. ♪ ♪ principal. for all it's worth.
so you're a small business, or a big one. you were thriving, but then... oh. ah. okay. plan, pivot. how do you bounce back? you don't, you bounce forward, with serious and reliable internet. powered by the largest gig speed network in america. but is it secure? sure it's secure. and even if the power goes down, your connection doesn't. so how do i do this? you don't do this. we do this, together. bounce forward, with comcast business. the dow snapping a four-week win streak in what has been a volatile week for stocks
this as president biden reportedly plans to hike the capital gains tax to 43.4% let's bring in alan blinder, professor at princeton university and former federal reserve vice chair glaet to see you, alan >> nice to be here >> the president, the treasury secretary, the federal reserve chair, they have all been telling us how fragile avenue i place we are in in this economy, how we are not out of the woods yet on covid-19. is now really the time to do this >> well, we're not out of the woods now, but we're moving out of the woods i mean, the economy's looking very strong. i don't want to quite say it's firing on all cylinders because we still have covid problems and i think the biggest risk in the outlook is that covid could get worse. it doesn't look like that's going to happen. it looks like it's getting better, at least in the united states but if you want to pick a risk, i would pick that one. but you know, popular forecasts for gdp growth this year, so
fourth quarter, fourth quarter for 2021, are running 6%, 7% some people are higher than that that's quite powerful momentum that we have right now so yes and especially if i was secretary of the treasury or chairman of the fed, i'd be exuding worry, absolutely. but i'm neither of those and i'm feeling pretty good about the way the economy's performing >> so you can talk to us straight, then, alan i guess one of the concerns is that the economy is booming as you say because of all the stimulus in part and obviously the vaccines and a lot of those may not be lasting factors. but what could be lasting here are higher taxes, capital gains, corporate, individual. how does that alter the economic outlook? >> look, we have a lot of steam right now. we have a very large budget deficit. the national debt is
consequently growing very rapidly. we can't afford to keep doing multitrillion and multitrillion-dollar packages, one after another, without bringing in some revenue that's sort of arithmetic, or basic financial. basic finance. basic economics. now, does that mean you have to match it dollar for dollar no but you can't -- we don't want to slip back into the attitude that we can just spend our way under the table without worrying a bit about where revenue's coming so we do need revenue. and the main question is where can we get the revenue there are people that want to tax the poor not that many people want to tax the poor there's not that much money there. or the middle class. joe biden, who's now president of the urktnited states, has ru that out basically, taxing the middle class that means upper income groups, who by the way have had a nice
ride here with the stock market and other things i guess i'd cap that off by answering i have long thought, this is not a new thought, i've been writing about this for decades, that in a better organized, fairer and more efficient, put the emphasis that way, tax system capital gains and ordinary income would be taxed at the same rate i've always thought that joe biden proposed that during the campaign and i'm glad to hear it. >> to the point that you mentioned, that this is going to be a pickup in tax for the best -- the most well off and also the fact that it's on capital gains as opposed to earned income, does that mean it won't in fact hit the economy as much as perhaps some initial reaction was that it will only just be more redistributive than actually hurt economic activity? >> i think that's right. look, we can take back -- it's
hard to find an increase in the capital gains tax in recent years. go back to 1986. which is the last time that the congress actually equalized the tax rates on gains and ordinary income the 1986 tax reform, widely applauded by economists. that did not send capitalism into a nose drive. the later part of the '80s were very good. you may remember the stock market went to crazy heights in 1987 then plummeted but the economy kept rolling along through all of that. it was a good time despite the fact that capital gains rates were, quote, high, meaning the same as on wages >> what about the step-up basis in capital gains why isn't that talked about as the top part of the discussion and do you think it should be and will it be >> yes, the reason it's not on the top is i'm not deciding it's on the top
that's on the top of my list you know, when people complain about capital gains being taxed heavily, the truth is that a very large share, i donate know the number off the top of my head, of capital gains are not taxed at all because they're passed on by deseedents to their airs and the basis is stepped up and they never get taxed that could keep on going indefinitely over multiple generations, by the way, if the asset is not sold. this is unfair it's inefficient and it costs the government revenue. and as i started this little remark, it means that the true effective rate of taxation on capital gains is very, very low. >> but now with some of these proposals we are talking about getting into the 60s -- not 60s, maybe high 50s percentages if you look in new york new york city even higher.
california these levels you think are economically palatable and i will say you're a democrat, right, alan? you worked for president clinton. and i just wonder how much of that ideology informs your economic view here just to be transparent >> there's some ideology it goes both ways. you won't get many republicans agreeing with what i said about the fairness and efficiency of raising the kaps gains tax it does create a partisan divide even among economists. many of us economists left or right agree on many, many things but that's one of the issues where i think you can find a lot of disagreement. i think the evidence is on our side in terms of it not doing great violence to the economy. look, we don't complain, we on the left of center side, we don't claim that this is the way to boost economic growth, by raising the capital gains tax. the claim on our side is it's not going to do it terrible
harm that's a different sort of a claim. and i would stand by that. i think the evidence stands by that claim. but you know, you come back to the bedrock point, which is we need revenue from somewhere and if you don't get it from the upper income groups, if you don't get it from capital gains and other things like that, where are you going to get it? >> gas tax, sales tax. there's all sorts of things. >> if i had my druthers -- you asked me before top of my list if i had my druthers, we'd have a significant carbon tax for climate change you know, the politicians don't really want to do that >> alan, this sounds like we should be doing an old school cnbc-style debate on cap gains, which i'm sure we will as it's a big topic. thank you for joining us today alan blinder, former federal reserve vice chairman. we are still awaiting a decision on that j&j vaccine halt from a
what happens when we welcome change? we can make emergency medicine possible at 40,000 feet. instead of burning our past for power, we can harness the energy of the tiny electron. we can create new ways to connect. rethinking how we communicate to be more inclusive than ever. with app, cloud and anywhere workspace solutions, vmware helps companies navigate change. faster. vmware. welcome change. time now for a cnbc news update with courtney reagan. courtney >> hi, sarah it's good to see you
a pentagon commission is recommending independent panels decide whether troops charged with sexual assault be prosecuted currently commanding officers have that responsibility the recommendation has been sent to defense secretary austin. his decision on the measure is expected in about a month. and north carolina's elizabeth city pressure is mounting to release body cam video of deputies fatally shooting a black man while serving search warrants. the city council is voting on a resolution urging a court to share the video with the public. and in new york city no appointment no problem starting today, city-run covid vaccine sites in the big apple are now accepting walk-ins regardless of injury new york started offer walk-in shots to people 50 and over last week mayor de blasio says the move was successful enough that it was worth expanding. wilf, back over to you >> court, thanks so much for that up next, former fda commissioner dr. scott gottlieb on the future of johnson & johnson's covid vaccine as we
await word from the cdc's longel bk aou "csi bl"acin cple. that building you're trying to buy, - you should ten-x it. - ten-x it? ten-x is the world's largest online commercial real estate exchange. you see it. you want it. you ten-x it. it's that fast. if i could, i'd ten-x everything. like... uh... these salads.
or these sandwiches... ten-x does the same thing, but with buildings. sweet. oh no, he wasn't... oh, actually... that looks pretty good. see it. want it. ten-x it. yum! you packed a record 1.1 trillion transistors into this chip i invested in invesco qqq a fund that invests in the innovators of the nasdaq 100 like you become an agent of innovation with invesco qqq
warnings should be accompanied with the shot. the hold comes as 15 people suffered severe blood clots after receiving the vaccine. three died nearly 8 million shots of the one-dose jab have been administered which makes it still very, very low probability event. joining us now is former fda commissioner dr. scott gottlieb. he sits on the boards of pfizer and illumina and a s. a cnbc contributor. dr. gottlieb, what do you hope to see happen here >> well, look, i think that the cdc is going to make a recommendation to their advisory committee that the vaccines should resume. the purpose of the pause that was put in place about more than a week ago now was to give the fda time to explore whether or not there were more of these rare side effects that they had uncovered. and in the ensuing time they've done a thorough examination and doctors would have surfaced additional cases if they had seen them. and while we've discovered additional cases, while the fda has reported on some additional cases it doesn't change the undermieg equation that this is a very rare adverse event.
so i think the balance certainly tips in favor of using this vaccine, having it available to consumers and providers, and i would expect the cdc to make a recommendation that this vaccine resume use and that there maybe be some additional warnings on the label under the emergency use authorization advising consumers but not restricting its use in any way >> we were talking to the ceo of cushman & wakefield last hour, dr. gottlieb, who runs this huge commercial real estate company and is living and breathing the reopening trade and the return to the office. and was making forecasts hoping we would get to herd immunity by july but also hoping to hear from you on this point as we get to a point pr there's evidence that supply is now outstripping demand or starting to potentially here in the u.s., do we get to herd immunity and if so by when? what's your latest thinking? >> well, look, i don't think we should be thinking about achieving herd immunity. i don't know that we ever achieve true herd immunity with this virus just stops circulating. i think it's going to circulate
at a low level that should be the goal, to keep the level of virus down. i think we are going to get to a point this summer where the circumstance lairks of this virus is gose to be extremely low. we're going to see cases start to collapse at some point in may pretty soon. we're seeing it already m n. parts of the country you look at michigan right now and cases are on a straight line down we're going to get to a point where there's much less virus around the country but given all the testing we're doing we might never get below 10,000 cases a day or 5,000 cases a day even in the depth 69 summer because we're doing a lot of testing there will be outbreaks in summer camps we'll pick up a lot of asymptomatic and mildly symptomatic infection. i think the bottom line is the vulnerability of the american population is being dramatically reduced as a result of vaccination and that's really what we need to focus on we shouldn't focus just on cases alone. there will be cases. but we should focus on how many people are being hospitalized and getting sick from this virus. and that's going to dramatically decline as we roll out the vaccines the final point i'll make is we're seeing supplies start to outstrip demand for the vaccine but that doesn't mean that there's not vaccine for the demand v vaccine what is happening is that the
sort of ready demand, the people who are willing to line up and go out right away to get the vaccine, we vaccinate a lot of those people there are still people willing to get vaccinated but they're not as eager to get vaccinated or they're not willing to go out and go through the same efforts so we need to make it easier for those folks to get access to the vaccine as well. it's softer demand if you will but we'll achieve higher numbers of vaccinated americans. >> dr. gottlieb, i'm sorry you've seen situations in india at the moment. to what extent is that because of new variants that should worry us here versus population dynamics there or low vaccination rates? >> yeah, it's unclear right now. b.1.1.7 definitely got into india and that's accounting for some of the spread that we're seeing, rapid spread also they have a new varnlt, this 167 variant that has two mutations in it that concern us. as a 44k mutation that's found in the brads'llian variant and in the south african variant it also has a mutation that's found in the los angeles strain as well. it has two different mutations
in it that concern us. that's probably accounting for some of the spread we don't have a good sense of how much of the infections are a result of 167 and b.1.1.7 but it's a lot of the infection as that we're seeing. the seral positivity in india is pretty high. there was a study out in december showing that probably about 40% of people in the metropolitan areas of that country had already been infected, so it must be much higher right now so they may be starting to reach a point where they're going to start to turn over as well or start to see cases hopefully come down because of the sheer number of people who've been infected they've also deployed 120 million vaccines now, that's a lot in our country but it's not a lot over there. the population's obviously much bigger it's about 10% of the population but they are getting the vaccinated numbers up. >> wanted to bring up one study, dr. gottlieb, which i thought was a little scary and clearly would have societal implications on health and on the economy, which is this huge study published in "nature." 87,000 covid-19 patients, people who were not hospitalized, and many had mild cases, had a much
higher risk of deaths and health complications than people who did not have covid what did you make of that? >> well, look, i saw the study it's hard to tease it apart fully. there is obviously some people who recover from covid have sequelae from the infection, have some long-term effects from the infection, and it probably makes them more vulnerable for other kinds of complications and that may be accounting for some of what they're seeing in that study it's also hard to fully control for the fact that people who contract covid and become sick from it may have more underlying health conditions in the first place. it also may set them up for bad health outcomes in the ensuing months apart from the covid infection. the study itself is hard to fully interpret. it's probably a combination of both of those factors. but clearly there are sequelae from covid we see that now. it's obviously a dangerous infection, even among people who recover from it. that's why we should encourage people to get vaccinated so they can avoid getting infected in the first place. >> dr. gottlieb, thanks for joining us good to see you. >> thanks a lot.
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. if you're 55 and up, t-mobile has plans built just for you. switch now and get 2 unlimited lines and 2 free smartphones. and now get netflix on us. it's all included with 2 lines for only $70 bucks! only at t-mobile. jpmorgan became the latest partner of the european super league to apologize today. a spokesperson saying, "we clearly misjudged how this deal would be viewed by the wider football community and how it might impact them in the future.
we will learn from this. the fallout for jpmorgan seemingly less severe than it might be for some of the owners of the 12 clubs involved, who are still facing a revolt from fans as highlighted today by protests from arsenal fans just a few hours ago. trying to force out owner stan kroenke. he's also the owner of the l.a. rams, the denver nuggets and the denver avalanche by the way. should not who might be interested to buy arsenal, sport advice ceo daniel eck. he tweeted today, "as a kid growing up i've cheered for arsenal as long as i can remember if kse," that's the holding company of stan kroenke, would like to sell arsenal i'd be happy to throw my hat in the ring, end quote. meanwhile, as i said, sara, a source at jpmorgan suggesting it's not going to be as big a kickback they're not delaying the launch of chase in the uk and they don't expect a lasting blowback. >> what a revolt from the fans in other sports news a tough week for nike. today all-star gymnast simone biles announcing she's leaving
nike to partner with gap's athleta brand. biles telling the "wall street journal" about athleta, "i felt like it wasn't just about my achievements it's what i stood for and how they were going to help me use my voice and also be a voice for females and kids." nike responding saying, "our contract with simone biles has ended and we wish her the very best we've always taken great pride in our leadership in supporting women in sport at all levels for close to 50 years as individual athletes, through their universities, national teams or their competitive leagues. biles didn't badmouth nike per se but it's notable that sprinting champion allyson feel made a similar move to athleta a few years ago and did criticize nike for failing to support pregnant athletes. nike yeah was at the center of allegations of having a bro culture in 2019 when it replaced a number of execs over behavior and culture including the number 2 at the company simone biles comes just days after we learned that kobe bryant's estate is also leaving nike after nearly 18 years and
at least 20 pairs of sneakers. kobe's wife vanessa was at odds with nike over supply issues the estate has been quietlit filing patents and trademarks of its own hinting at a new line. sneakers aren't necessarily a needle mover on sales. they're reportedly under $250 million. but bryant of course is an presumtive slatgrevor larence jennifertrevor lawrence. do i really fit. with indifferent companies opportunity to do different things always have to ask myself is this me, does it fit who i want to be. what i want to be portrayed as >> he didn't give us word on adidas nfl draft is next thursday to be sure nike has a lot of top
athletes especially in basketball, lebron, kevin durant, western conference quarterfinal westbrook. but the sponsorships do matter when it comes to selling sneakers. >> fascinating stuff we have to pivot to breaking news on j&j. >> cdc recommended j&j for those 18 plus not putting restrictions in place including recommending a warning about risks about these very rare clots, 10 were in favor, 4 opposed and 1 abstention some folks opposed recommended there be a warning for women under 50, for whom the risk is higher for these rare clots now
the decision goes to the cdc and fda to lift this recommended pause on the j&j vaccine over the weekend may see it back to use in the u.s. >> thank you so much still to come, earningth week and next week we'll preview what's what. ♪ ♪ ♪ ♪ ♪ ♪ the lexus es, now available with all-wheel drive. this rain is bananas. lease the 2021 es 250
all-wheel drive for $339 a month for 39 months. experience amazing at your lexus dealer. hey, dad! all-wheel drive for $339 a month for 39 months. hey, son! no dad, it's a video call. you got to move the phone in front of you like..like it's a mirror, dad. you know? 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.
up next, tesla gearing up for results on monday what should investors look for, we'll tell you when "closing bell" comes back hey lily, i need a new wireless plan for my business, but all my employees need something different. oh, we can help with that. okay, imagine this... your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, asap! so basically i can pick the right plan for each employee... yeah i should've just led with that... with at&t business... you can pick the best plan for each employee
and only pay for the features they need. it's a wishlist on wheels. a choice that requires no explanation. it's where safe and daring seamlessly intersect. it's understated, yet over-delivers. it is truly the mercedes-benz of sports sedans. lease the 2021 c 300 sedan for just $449 a month at your local mercedes-benz dealer. zero-commission trades for online u.s. stocks and etfs. and a commitment to get you the best price on every trade, which saved investors over $1.5 billion last year. that's decision tech. only from fidelity.
now to our wall street look ahead, key earnings from alphabet, facebook, amazon, and many more and the big report to watch on monday, tesla, phil has a preview. >> it's all about growth and profit margins, gross margins in the auto business for tesla. on monday three things analysts will focus on, first, what's going on with the growth in china, it's accelerating at a steady clip, does it continue in terms of the profitability out of the gigafactory, there's one in germany, one in texas, the capital expeexpenditures
spent on those two factories finally the growth margins, auto profit margins tesla 22% growth margins is expected when you look at vehicle delivery they basically hit the expectation for all of 2020 we have not gotten more than vague guidance when it comes to this year, will that change during the conference call don't forget earnings come after the belichick on monda the bell on monday we will have the numbers for you. >> we'll all be there. the other thing we're looking out for. a little birdie told me it was your birthday this weekend, happen yi birthday >> thank you very much happy birthday >> thank you svechnikov. thank you very much. >> phil won't giveaway his age we'll be watching earnings overall so far 34% growth rate for earnings and beaten expectations by 24%, how much of
that is already baked in. >> particularly the big tech names tuesday, wednesday and thursday always a lot of fun when those come out. see if they disappoint netflix did this week. follow snap jumped significantly. look forward to next week. have a lovely weekend. "fast money" starts right now. i'm melissa lee, and this is "fast money", tonight as trader lineup -- we're trading the tech turn around, nasdaq rallying as we gear for huge earnings, and look out below, next stop for bitcoin, $40,000, why carter weather -- worth is seeing trouble in the crypto charts and later -- ♪ >> "fast money" friend cashious is