tv Worldwide Exchange CNBC April 28, 2021 5:00am-6:00am EDT
here's the top 5 at 5:00 fed shock and awe? we're setting up for the big fed day ahead. a tale of two techs. after record-breaking course from google and microsoft, getting in the free market 100 days in and president biden set to speak before congress tonight the goal, spending trillions more on new programs but will even some democrats push back on the tax hikes that want to pay for it
apple reportedly slashing production for what once was one of the fastest growing product lines the competition turns up and call it the epic tidal wave of inflation from cars to golf we've got a list of nearly everything that is up in price and you're going to want to see this it's your rbi on this wednesday, april 28th and this is "worldwide exchange" on cnbc. ♪ well, good morning good afternoon, good evening, welcome from wherever in the world you may be watching. i'm brian sullivan thank you very much for joining us and starting your day well, today is really about two things the federal reserve and earnings now, nobody expected jay powell and company to change much if anything certainly, they're not going to change interest rates, right
in fact the futures market says it does not expect an interest rate hike from the fed, that is, not the bond market until 2023 the markets have been slow if you noticed ahead of this. and futures doing the same thing today. they're flat, slightly down on the dow, slightly higher on the s&p. the ten-year yields have been tuck, 1.6, 1.64 right now. if you're worried about inflation and more are, here's a tip. check out t.i.p.s., treasury inflation protected security you probably heard a lot about them lately. one big one that's an etf that mirrors t.i.p.s. is an etf, a pop off the april lows it tracking inflation and if you want to know what the market thinks about inflation -- well, watch those as well.
or watch our rbitowards the en of the show, it's got a list of everything that's up at record or near record highs in prices well, there are two big stock stories this morning things you know, google reporting huge beats on the top and bottom lines in the first quarter. and check this out, google is beginning a $50 billion stock buyback, one of the biggest we've ever seen or heard of. youtube ad revenue up 50%. everybody sitting at home telling their kids don't bother me, watch the ipad overall, scales to $55 billion google's youtube is closing in as being as big as netflix think about that then there is microsoft it is being hit in the premarket, despite being down up 19% year over year. and hardware sales also coming
in higher than expected. the problem, cloud sales, its azure platform and others were flat investors hoping to see a little more growth. let's switch gears out of stocks and head to d.c. because it's all ahead of president biden's big address to congress tonight. his first as president what can we expect as he tries to sell the country and members of his own party with plans. what can we expect tonight jt. >> reporter: good morning, president bide will be deliver his first address to a joint session of congress tonight and announce a $1.8 trillion plan i tax cuts paid for by the wealthy. it's about 1 trillion over the next decade, 200 billions for universal preschool. $109 billion for free community
college and $225 billion for a national paid family leave program. now, this proposal also covers $800 billion in tax cuts including making the larger earned income and dependent care credits permit but also extending the child tax credit extended to 2025 and they believe they can fully pay for this package over the next ten years among the increases restoring the rates 39.6%. tax cap gains for ordinary incomes makeing and end stepped up basis and the white house officials called this plan part of the core of the biden domestic agenda and tonight the president will frame this as investment of the american economy and the future but they know it will go through the wringer on capitol hill.
one thing they do not mention is the state and capital state deductions, brian, saying it's eager to get it to lawmakers back over to you >> there's a lot to unpack there. there are a lot of things to unpack on the tax hikes, ylan, and a lot are probably going to hit the states occupied by wealthy, maryland, massachusetts, new york, what has been the talk among democrats particularly that cap on state and local tax deductions which if you remove it just puts a dent in the spending and pay for it plans? >> well, certainly, there is some bipartisan push to end that cap on state and local tax deductions but one of the interesting dynamics here is that the lawmakers, the senators in some of the states that you mentioned those are the ones pushing biden to go even bigger on this package.
so what you're finding is those democrats represent something of the high tax states they are more progressive they wanted biden to make it permanent. they wanted a bigger investment in child care. they wanted to include changes who is eligible and what age and they're not hearing from states like joe manchin, he's one of the key swing votes and crucial for getting anything that president biden wants passed on capitol hill what we're seeing biden is really being pulled in two ways here progressives they let's make this even bigger than the $1.8 trillion you propose and the moderates say, hang on a minute, we got to make sure this is paid for. and by the way, do we even need to spend that much money. >> well, it's a battle of wonot?
the republicans will push back and say wait a minute your earned income tax credit is actually just a universal basic income in disguise, effectively cash payments for children there's a lot of nuance to the language that our viewers and others need to understand that is behind just the headlines, because each side is going to use words. and the way they frame things -- that we knew, by the way, to any of the audience out there, to try to sell it there's a lotmore in here than meets the eye. >> well, that's right, a lot of these priorities are ones the democrats have been pushing for for a long time. and another sort of dynamic that we're seeing develop is that the way they've envisioned the social safety net and to get this done through a fast track reconciliation process is to do this through the tax code. to do this in a way that focuses
on direct payments to families because that is a way that democrats feel gives families the most flexibility but it's also the way they can use the processes of the complicated legislative process of the senate in order to get this passed. >> ylan mui, ahead of the big congressional address, we're glad you're here for us. thank you. have a great day, take care. as we just mentioned the president's address to congress tonight comes out of his first 100 days in office and it's a mixed picture when it comes to stock performance in that time. since biden's inauguration, you've got things like retail, steel, transports, they've dominated on the soaring, quote, reopened trade not so lucky, biotech, gold and emerging markets all negative since the president took office but biden's short time in office is also defined by big spending programs that we just talked
about that is sparking fears of inflation all of this as the fed makes a call on interest rates tonight. let's bring in stiefel's chief economist. lindsey, what do you expect, if anything, from the federal reserve today? >> in terms of monetary policy we don't expect much we do expect the fed to keep this rate. and keep it at the current 120 billion a month. what we could see, however from the chairman, during the press conference say reiteration of this ongoing need for the fed to continue to support market despite the improvement we've been seeing. we've seen vast gains in manufacturing, services, housing, the consumer and labor market and the fed is likely to acknowledge these in the right direction but at the same time, the fed is likely to reiterate
that the market is far from complete and still needs the fed to keep their foot on the gas. >> do you think it does? >> well, i do think at this point the economy is still at a fragile state. the gains we've seen thus far do create the perfect short-term equation for growth. when we talk about the expectations for gdp, we're looking for very elevated levels, 6%, 7% in the first quarter and continue that strong profile through 2021 but the vast majority of this support for the elevated return of activity has been the spike we've seen that spike in activity closely coordinated with each of the rounds of the pandemic specifically with the trump administration and earlier with the biden administration and what happens, it starts to remove that punchbowl. that's something that the federal reserve is concerned about, they're saying we're not
going to withhold support until we know it takes hold. we can see there be has been organic activity for this going forward even without this massive government spending. >> lindsey, we have seen it flying around and driving around during the pandemic that the underlying economy may have never really fallen off the way many predicted which is a good thing, by the way. this is a time you want to be wrong. obviously, hospitality, leisure, small business on main street, they got crushed but the underlying economy seemed to only accelerate in many parts do you think that we, perhaps, as a whole, overestimated the negative economic impact that covid might have had >> well, i don't think we could possibly have accounted for the unprecedented measures that we saw from the federal government that helped supplement that loss
of activity during the worst of the crisis to your point going forward, the best we can expect is not further support from the fed or the federal government but a longer term reopening plan allowing businesses to return to normal allowing consumers to move back into the marketplace that's the trajectory that we need to head towards that's where we're beginning to see the organic support for activity returned and returned to a sustained level where we can regain the punchbowl unfortunately, it looks like we're the lions on these measures to keep this going. >> maybe inflation isn't a bad thing, lindsey, by the way at the end of the show, you want to watch the rbi of all the things near or at record highs. lindsay, thank you for being on. have a trask day >> t terrific day >> you're welcome. let's look at big stories.
first up, india. the situation there continues to deteriorate as the country sees yet another day of more than 300,000 new covid-19 cases many hospitals there are at or near capacity with vaccines, oxygen and medical supplies much needed beginning to arrive from around the world india's seven-day average is nearly 1.5 times the rest of the emerging markets also happening today, regulators are reportedly looking at new rules to restrict growth predictions made by spacs. according to reuters, the s.e.c. is honing in on specific rejections used by spacs that protect against shareholder litigation and new data on deal logic on the breakneck pace of ipos this year. according to the report both deal numbers and deal values are at their highest levels from the start of any year going back at least two decades, wow
we are just getting started. and when we come back on this busy wednesday, a major european bank shows you what's possible when you're not caught in the thick of scandal will scandal. a name to watch revealed plus, on pins and needles. why shares of pinterest are taking a nosedive in the premarket. and a new look in the semiconductor shortage china's market promise and the three stocks that could help make the difference. straight ahead on "worldwide exchange." to a huge wedding. to give high fives to our patients. to hug my students. with every vaccine, cvs is working to bring you one step closer to a better tomorrow.
which shows will you be getting into tonight? with every vaccine, cvshow about all of 'em.you netflix. cuz xfinity gets you really into your shows. when someone burns for someone who does not feel the same. oh, daphne. let's switch. from live tv to sports on the go. felix at the finish! you can even watch your dvr from anywhere. okay, that's just showing off. you get all of this with x1. so go on, get really into your shows. you need a breath mint. xfinity. it's a way better way to watch.
all right, welcome back. time to check on some of this morning's big money movers first up, deutsche bank, the german bank reporting its best quarterly profit in seven years. that's on fewer loan losses due to the economy as growth slowly recovers from the pandemic next up, investors sticking a pin in pinterest, the media company reporting first quarter revenue jumping 78%, beating its own guidance but look at that. shares are down 10.5% as user growth, particularly in the u.s. appears to be slowing. pinterest said since the second quarter last year it noticed a strong correlation between lockdowns and user engagement on its platform imagine that sit at home and look at the internet finally, starbucks, second
quarter sales missing forecasts even as the coffee chain raising its annual profit and annual guidance on the expectation more customers will return as they get vaccinated starbucks says american sales have returned to prepandemic levels although sales in locations in downtown areas are still lagging those in the suburbs. by the way, the ceo kevin johnson joining "squawk box" today. apple's hardware headache, as the company reportedly slashes production on what was once its fastest growing segment. detas enilwh "worldwide exchange" returns. dow futures down 41.
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welcome back the global semiconductor shortage continues to plague american business and consumers and it's hitting across almost all sectors like cars, technology, even home appliances like microwaves. tesla called out shortage in its earnings call saying the supply chain remains, quote, difficult. volkswagen if you remember a couple days ago said the biggest challenge that the company is facing is the semiconductor shortage for more on the shortage and how investors should analyze it, we're joining by a cnbc contributor, scott, it's a royal pain in the you know what, the semiconductor shortage, you want
that product sorry, we can't make it for months but is there a way to ease the pain of the wait by investing around it and making money up? >> brian, there is you have to focus on u.s. chipmakers because while much of the worldwide chip supply comes from east asia, china is not going to do any favors given the situation with huawei. they're actually hoarding chips, the global supply chain and port problems are problems for nearly every automaker, every appliance maker. yesterday, when they announced earnings, tesla's ceo musk announced that the global supply chain was causing insane difficulties for the company and it's not just tesla. ford's ceo said it's the most difficult supply chain problem he's seen ever and recently, it's been estimated ford is going to lose anywhere between $1 billion and
$2.5 billion on their bottom line this is a company that can't afford to shave a whole billion dollars or $2 billion from their bottom line, because of the global chip shortage and, brian, they recently slowed production of their pickup trucks which are insanely profitable so ford is slowing production of pickup trucks. >> that's what our audience -- our audience may not fully understand they hear about the semiconductor shortage, maybe they don't fully get it. if you want to buy one of the new f-150s you got your eye on a pickup truck and you customize it they say, yeah, we'll get you that truck, we'll get it to you by september you say, wait a minute, i want to buy it now. sorry, we've got a production back log that's the kind of stuff that's happening and that's the kind of stuff that's going to hurt bottom lines >> absolutely. but it's also going to fuel inflation which is a problem you know it's also interesting
brian, not only is this a problem for automakers and for appliance makers, it's going to be a problem as you pointed out for everybody because of inflation. deloitte put out a report several years ago that said 40 of the cost of a new car has to do with automotive electronics because of backup cameras, collision avoidance. it's no longer batteries, 40% comes from electronics and that tells you how that is for a company that can't get computer chips >> and a company we ever talk about but huge in auto is little old texas instruments. they've been around for decades. and they make a lot of that stuff, analog and digital, that goes into these cars are they a good-bye because of this, or does it hurt them >> well, when you look at chips here in the united states, you
have to look at a company that makes a range of chips not just memory chips or processors the three companies probably in order would be intel, and then texas instruments and then microchips technologies, mchp. probably in that order intel has had plenty of problems but it's dirt cheap on a npb basis. even a company that's had problems is going to make a lot of money as long as they can crank out computer chips >> scott nations, nation shares, microchip, maybe a little intel, semiconductor shortage, when it hits trucks, scott, you know it's real. >> that's right. >> scott, we appreciate you coming on, thank you very much take care. still ahead on "worldwide exchange," why this crypto coin is hitting all-time highs as bitcoin continues to bounce along recent lows. who is it?
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which shows will you be getting into tonight? pure protein. how about all of 'em. netflix. cuz xfinity gets you really into your shows. when someone burns for someone who does not feel the same. oh, daphne. let's switch. from live tv to sports on the go. felix at the finish! you can even watch your dvr from anywhere. okay, that's just showing off. you get all of this with x1. so go on, get really into your shows. you need a breath mint. xfinity. it's a way better way to watch. focus on the fed markets waiting and watching and wondering when the fed may pull back ultra low interest rates. trillions of your dollars are at stake. you may find out today speaking of trillions, president biden is set to lay out the next leg of his ambitious spending plans, likely to include tax hikes on higher
income families. and microsoft and google looking at blockbuster quarters but the stock is having very different reactions. we'll dive into both numbers and what you need to know. it is wednesday, april 28th. and this is "worldwide exchange." well, welcome, or welcome back, everyone it's exactly 5:30 eastern time on the nose. thanks for joining us here on "worldwide exchange. well, today is really all about three things three things first tonight, the president's big congressional address, trying to sell the country and maybe some members of his own party on his latest trillion dollar spending plan but it's also about the federal reserve and guidance from companies. now, on the fed no one expects jay powell to change much, if anything in fact, the wording of the statement could be exactly the same as the last one
the futures market saying it does not expect a rate hike from the fed until 2023 we also have big time earnings today. companies like boeing, facebook, apple and ford, all out with their numbers. now, ahead of this, the market waits and it watches futures are mixed. maybe slightly down on the dow slightly higher on the s&p 500 it's been a very slow couple of days, but that could all change today. kind of the same story with bonds, ten-year yields, a bit stuck. around 1.6, about 1.64 right now, not a big move there. now as with today's fed meeting it's pretty much exactly a decade since the fed and ben bernanke first instituted a press conference that comes along with a rate decision remember, they used to just put out a statement and a decade ago, almost to today, we started getting pressers, well, steve liesman and other colleagues at cnbc noted since that first press conference, a friday good
run for stocks and amazing run for tech look at that, since april 27th, 2011, the first fed presser. the dow is up 117% s&p up 11% not bad but the nasdaq is up nearly 500%. in other words, over the last ten years if you just blindly bought a nasdaq etf. never thought about it just threw money into a nasdaq etf and vanished for ten years and opened up your statement you made nearly five times your money in that time of course, it's not just the fed sending stocks higher, but easy money policies pushing a lot of money to growth stocks and certainly, a lot of our viewers' wealth has grown in that time. now, your top stories this morning. president biden tonight set to unveil his ambitious american families plan to congress.
amer americans, with his 100 day until office today, he will address congress with the $1.8 trillion spending and tax cuts paid for by top earners. it will include things like $200 billion for universal preschool. $109 billion for free community college. $225 billion for national paid family leave program proposal also covers $800 billion in tax cuts, effectively, creating a universal basic income and even larger earned income and dependent car credits permanent but also extending the tax credit to 2025 and they expect that to be continued indefinitely those are some of the proposals. we'll see what the reaction is tonight. let's move on and talk crypto ethereum is what will we referred to before the break hitting an all-time high following reports of the european investment bank's plans
to launch a digital bond sale on ethereum's blockchain network. the european investment bank is the lending arm of the eu. according to reports, the eib as it's known, plans to issue a two-year, $100 million euro digital bond with the sale to be led by goldman sachs, banco and societe generale and right now at 2600 on ether ethereum, 1200 bucks a couple months ago and amc entertainment is shifting gears on its plans to issue new stock. the company to sell off 43 million shares after announcing it was cancelling its proposal to shoot 500 new shares. amc in annest to recover from the pandemic big tech earns continue to roll out with google and
microsoft, the first to report, alphabet as it's formally known crushing expectations. it posted sales growth of 34% year over year the company almost doubled analysts' expectations for earnings per share google did see a steep drop in ad spending at the onset of the pandemic but their continued growth could be a sign that tech could be on hold as some of the gains it's made over the past year go away joining us now is paul meeks, fund manager paul, nice to have you on nice and early. google, these numbers are huge youtube almost the size of netflix. i guess because everybody's at home and people are watching youtube. parents are, here, get on the ipad i'm trying to get my job done. are these numbers sustainable to you? >> i actually think google will continue to have a run right? the numbers were, as you said, outstanding.
and the expectations were high going into the print but i do think with the reopening of the economy which some folks don't know this, but they should, that the benefit for ad spending is there and so, yeah, i think that they'll have a couple of quarters here at this 30%-plus level. and the nice thing about this stock relative to some of the other faangs is, last year, even though it had decent performance vis-a-vis the s&p 500, it did underperform most of the other faangs and so it's valuation coming into 2021 was less demanding, gave it more room for upside some of these other stocks have done so well, and their valuations are so expensive that they're really sensitive to any blemish at all in their quarterly reports. but i probably am, after last night's print, what i see going forward for google, i probably am the most bullish of the faangs in that vein. >> why
>> well, i just think that there's still upside to the valuation of some of the other ones are going to be harder to do that. and the growth is fast and accelerating and even above pretty lofty expectations. >> all right let's turn now to microsoft. it is down a little bit in the free market. i mean, it's down a couple percent. man, paul, microsoft has a heck of a run they beat on earnings. they beat on sales the guidance was good. cloud segment growing by 50% 5-0 percent in the first quarter. revenue grobwth up year over year i don't want to make too much of it, the stock's been on an absolute monster tear. are you surprised by this? i mean, microsoft, can they keep this level of growth up? are that many people using excel
or bing or the zoom music player >> it's an excellent question. one of the reasons that the stock looks like it's going to open down 2% now be it that the stock was up 18% year to date in a market that was up 11% because, you think about it with the whole covid and the remote work, remote play, remote study themes that they've had a boom, unexpected boom, in all things hardware and so, i think, one of the things that we all have to wrestle with is do the good tidings continue with microsoft? because, remember, before covid, nobody invested in this company as a hardware story. but now pcs are booming. and can they continue to boom? i think the pc rebirth, let's call it, will have some legs but that's nothing to be concerned about. also folks looked very closely at azure, the public cloud
business it's growth is 50% but when it comes to the h high-value stock, it's not the change, it's the rate of change. but azure, i know it seems hard to say, it's starting to slow some i think it's confirmed to be a three-horse race with amazon, microsoft and google cloud coming quickly in third place. i still like it -- >> you go from 50 to 45% growth, paul i think a lot of companies would like to have that problem. let's move on, complete the trifecta, shall we those numbers are out. we're waiting for apple. their numbers are out after the bell they've got big expectations as well after posting their biggest quarter ever back in january but one segment not looking as good, that is airpods if anybody cares. what are you looking for from
apple? what is the key number tonight >> i think if you look at apple, it's not only the overall numbers, they should be a slam dunk, up 50% u.p.s. growth and revenue growth, they're comparing a is very poor quarter from a year ago. but i again want to see how well do we do in some of these mundane, or at least previously mundane businesses like macs and ipads. because they're really the driver as we roll out 5g and then continue our focus again on the iphone and i also want to see, what are they saying? how are they pitching the new privacy measures with is14.5 >> do you think that's going to drive sales up, paul, to make the stock more buyable because apple seems a little more serious about privacy? when i say serious, meaning they're the only ones that care about it among the big technology companies is that going to move the needle and make it more investable? >> well, i actually do think
they'll make the case that this will be a driver out of all of the major tech platforms and maybe they're uniquely suited to be able to do this and it might be disingenuous it might be marketing spin but they are the safer platform. they are protecting your data. they are not the advertising field business of course, you know, that might be just badmouthing essentially indirectly facebook and google but i do think they'll try to make quite a splash. and of course, i think they do it at the end. day to drive incremental sales, earnings and cash. >> paul meeks, looking at microsoft and google looked ahead to apple tonight. i know you've got a couple of busy days ahead, paul. we appreciate you taking time for us take care. >> yes, sir. all right. coming up, more on this morning's big money movers including amd and the possible
semiconductor shortage as we head to break, here are headlines on this busy wednesday. verizon impacting calls for cell phone customers in southern california l.a. and san diego saying, hey, we could not get calls or texts in they were dropping aping all yey afternoon, verizon confirming that and humana announcing it will pay $5.7 billion in a 60% stake of kindred at home that is currently held by tpg capital. and the family of samsung announces it will pay off a massive inheritance tax of $10 billion. the payment one of the largest in the history of south korea, hey, in the history of the world, will be paid out over a five-year period how would you like to get a $10 billion tax bill wow. dow futures flat
♪ all right, welcome back. and good wednesday morning it's time for your daily covid vaccination update well, there's earnings on deck tonight. you got boeing, facebook, ford and qualcomm out with their numbers as well at the premarket move let's get the daily vaccination update and the rollout continues to boom.
more than 230 million shots have gone into american arms which means 97 million americans have been fully vaccinated. that's more than 37% of the adult population wow. and over 54% have received at least one dose which a new study out yesterday shows is highly effective in reducing transmission just one shot. also, cases continue to drop to recent highs and despite scary headlines around michigan and a few other states, nationally hospitalizations, especially among the young, are not moving higher nationally. and in a few select locations they are, but overall, the trends of cases, hospitalizations and famtalities are all moving in the right direction as the vaccination boom continues time for a check of this morning's other big money movers a second round of this, stock number one -- or stock number four is visa
meeting forecasts, surge in online shopping, a sluggish spending on travel visa's total payment rising 11%. the biggest jump since the beginning of the pandemic. stock two, texas instruments, shares down even agency the company posts better than expected first quarter results all on strong demand for semis t.i. raising revenues for the second quarter stock three, amd, another semiconductor company. earnings, you got it, you see the trends, being forecast, revenue nearly doubled they hiked the demand on the year, with the ceo lisa sioux saying she's confident amd will be able to source additional chips to its partners. she'll be on "squawk on the street" on 9:00 eastern eastern time coming up, the morning rbi and the higher prices you're
paying for, well, just about everything we have made an epic wall of inflation that you've got to see, we're going to list everything whose product prices are up you're going to want to see it and, by the way, you're going to want to hear it. and if you haven't already, subscribe to our podcast, by spotify, apple and more. no worries, listen to the podcast. we'll be back after this
i hope the vaccine can get me one step closer to my fiancé. dance on stage. spin class! i can't wait for my patients to see my smile again. to hug my students. to give my parents a proper send off. to go salsa dancing. no. i can't wait for you to meet my mom. play my piano for my friends. to give high fives to our patients. i think we are one step closer to being...better people. with every vaccine, cvs is working to bring you one step closer to a better tomorrow. (♪ ♪) witwhether it's ae, cvs itechnology first,g you (♪ ♪) a fashion first, (♪ ♪) a science first, (♪ ♪) or a first for us all (♪ ♪)
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well, it's time for today's most random but interesting thing. or rather, the most random but vesting things -- plural there's been a lot of talk of higher prices for stuff, later, inflation and the fed. and the fed doesn't seem that concerned but it should be who knows what things will look like in a year well, maybe not the fed. with that said, we thought it interesting to show you things that are all-time highs in price or at least multi-year high in price. are you ready? i'm going to blast through it. here's your prices at record or near record high menu, new cars, used cars, old homes, semiconductor, lumber, steel, iron, ore, copper, corn, wheat, sugar, platinum, palladium, shipping containers and more
we just didn't have any room on the wall we could probably throw up supply chain, but we ran out of space. this is short term it's a real pain in the wallet for companies and a pain in the wallet for you, the consumer, who doesn't need corn, copper, car, homes, lumber you name it, up at record or near-record highs in price random but interesting, and random but expensive let's get more on this and what it means for the markets along with new tax policies, we're learned by the chief strategist at truist advisory services. keith, what did you think of that list? i could keep going but we literally, for the first time ever, ran out of space on our giant graphics wall. >> first, brian, good to be with you. it is a pretty wide list listen these are things we're
hearing. we've all seen it, even me personally, i called up yesterday to get a refrigerator. hey, see you in september, when you can expect that to be delivered. we're seeing it's a short-term supply issue because of shutdowns we saw during the covid shutdown i will say, you know, if you're looking at from a market perspective, we're seeing the earning estimates moving forward. that's telling us at this point, companies are able to pass through some of these costs. if you're going to raise prices, brian no better time to do so when you have excess of $2 trillion in savings and $5 trillion of stimulus over the last year. >> let's tie to that, used cars, new cars, nickel, copper, palladium, all of the raw material that go into things by the way, our viewers think, we don't care. it doesn't affect us yeah, it does, because companies you don't think they'll pass that along if they can and
that's key for stocks. is it not? profit margins if their costs go up 10%, as long as they can pass on 10% or more to customers or consumers margins stay the same. markets are happy. do the companies have the pricing power now, keith, to do that, to keep margins and earnings stable? >> well, i think, certainly, it's going to be a mixed bag overall, i would say the answer is yes we can see that not just what i think, but what are the earnings analysts look at these companies individually and see those assets move up what's interesting, brian, the market is up 11% the forward earnings estimates up 11% year to date as well. we're continuing to see forward guidance move higher again, it's not going to be every sector you're seeing places you may benefit from this. think about industrials, think about materials. think about if you start to see the wage pressures lead to
higher rates what does that mean from a specter position. it's a lot different from last year and you want to be, you know, in the same path of these trends. that's why we like, as i mentioned materials, financials, industrials that can help push through some of these prices and keep or maintain profitability >> let's talk about something else, keith. and that is taxes. you and your team did excellent work, put out a note about tax policy that pertains to the market a law enforcement of our audience, they're cfos, they're business owners, they feel like maybe they're already doing their fair share and people are worried that higher taxes may hurt stocks the problem is, you've proven not a lot of historical correlation between tax policy and the stock market i know a lot of people aren't going to want to hear that, but history and the data says it's kind of true >> yeah. and we're really fact-driven, and i will say all of the research we've done, brian, shows a tenuous relationship
between tax policy and the market that doesn't mean that taxes don't matter, they do. so many other factors matter as well we went through the history of this and it's a mixed bag. you can go by decade and look at one of the highest tax decades in the years, in the '50s great stock market performance great economicals despite high taxes. then you move to the 2000s where you had very low taxes and very weak economy and very weak stock market returns even the last decade, brian, remember, 2013, we raised taxes. a lot of consternation then. but the mark was up a lot. 2018, we reduced taxes and the market moved sideways. again, we're not saying that taxes don't matter it just means so many other factors matter what is valuation? what is the fed doing? what is the economy and business cycle? it may trump other factors but we're still early in this
sector >> do you think stocks can move higher from here >> yeah, but i definitely think it's more of a two-step forward, one-step back. we're going to have higher fashions and higher rates versus the earnings that we see >> well said keith learner of truist doing extent work. keith, we appreciate you coming on thank you, have a spectacular day. folks, that does it for us on "worldwide exchange." you've god the president and congress later tonight and earnings, a big day. keep it here on cnbc erhil be here to wrap up evytng that happened today tomorrow "squawk box" is coming up. have a great day
which shows will you be getting into tonight? how about all of 'em. netflix. cuz xfinity gets you really into your shows. when someone burns for someone who does not feel the same. oh, daphne. let's switch. from live tv to sports on the go. felix at the finish! you can even watch your dvr from anywhere. okay, that's just showing off. you get all of this with x1. so go on, get really into your shows. you need a breath mint. xfinity. it's a way better way to watch. this is bob minetti and his wife wendy. in 2016, he was diagnosed with pancreatic cancer. bob participated in a clinical trial that included cutting-edge radiation therapy and surgery. he's been in remission since completion. i am so glad i learned what was possible for me stand up to cancer and lustgarten foundation are working together to make every person diagnosed with pancreatic cancer a long-term survivor.
google but very different reaction from the two stocks we'll return through all of the earnings movers straight ahead president biden is going to present this $1.8 trillion -- i thought it was 2.3 oh, wait, this is a different one, 1.8 trillion family plan. we'll show you what's in it and how it will impact your money. plus, interest rates likely on hold in the fed meeting inflation, got that ten-year, better be on the "stack. steve liesman is going to be here wednesday, april 28th, 2021. as "squawk box" begins right now. ♪ good