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tv   Closing Bell  CNBC  April 30, 2021 3:00pm-5:00pm EDT

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overall people are just pretty happy to have a job. >> no, i think that's right. speaking for those of us who are of a certain age, you're grateful for what you have and i think you are a little more able to ride over the bumps -- >> you have more perspective. >> rahel, thanks so much have a great weekend. >> i think that's very well said, tyler. have a great weekend to you as well we look forward to the hat picks. that's it for "power lunch." >> welcome to "the closing bell." i'm wilfred frost along with morgan brennan who's in for sara a weak session for the markets to cap off what otherwise has been a very strong month on track to end april with big gains. the s&p and nasdaq each up more than5% on the month but down a little over half a percent on the session. oil and energy stocks moving lower with energy the worst performing sector in the s&p 500. exxon and chevron both dropping on earnings. crude is slipping on concerns
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about demand in india. data coming in strong once again today. personal income exploding higher by 21%, driven by stimulus and personal spending jumped by 4.2% in the month of march. and bitcoin getting a big boost to end a very volatile month prices up 100% since the start of the year. 59 minutes left to go in the session. bitcoin is up 6%, down about half a percent or so for the s&p, morgan. i've got to do this as well. and we've got a big show coming your way, including the -- why did we change this the big ceo interviews coming up we'll speak with the ceo of restaurant brands about how the reopening is hitting sales later, the ceo of columbia sportswear will be back with us. that stock moving lower today on supply concerns but up 25% on the year amid a boom in outdoor activities let's be absolutely sure, morgan. >> yes, i will pick it up from here let's focus on the big stories
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we are watching today. mike santoli is tracking the action on the final day of the month and josh lipton has details on a brewing battle between the european union and apple. mike, let's start with the market >> yeah, morgan, a little bit of a listless, heavy tone to the market today, trimming back after a pretty good month. yesterday's attempted breakout in the s&p above 4200 didn't get escape velocity but it did bring the index down to the 4180s. it spent an awful lot of time right here in the last couple of weeks. as a matter of fact, 4185 was the close two weeks ago today. we first reached that level on april 16th so we've just kind of gone sideways a lot of people pretty much primed for some kind of a pullback hard for the market to capitalize on these great earnings and economic numbers coming out take a look at the last six months a lot of talk. every time we get to the end of april about a potential sell in may. it doesn't bear out that may
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starts a weak period, but it is the weaker since months in any given 12-month cycle so november to april have typically been the best months for stocks later in the summer things get choppy 28% gain in half a year really not bad. compared to bonds, that's the aggregate bond index but over six months relatively safe total bond market index, a negative total returning is unusual. so maybe it wouldn't be surprising to see some people reassess their equity exposures. here's the underlying strength of the market. this is the average number of s&p stocks making a 52-week high it's about 100 over the last ten days this spike right here was january of 2018. this one here was early in 2020. so it shows you it's sometimes toward the latter part of a rally phase in the market, not necessarily a prelude to disaster but it shows you, yes, broad
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underlying strength but also the idea that below the surface things perhaps are getting a little bit ahead of themselves, guys. >> i want to go back to the s&p and the point you just made there, the fact that we are seeing this consolidation. we've heard about and had these debates for weeks now about how overvalued, whether the s&p is overvalued at this level, mike is the way to think about it given the fact that we've had some very strong, very gang busters earnings reports so far that it is earnings catching up to price here? >> largely is that the earnings estimates for all of this year for the s&p up almost 10% so essentially companies are on track to earn 10% more right now than we thought they were four months ago and the s&p is up about 11% over that time so it is mostly earnings driven. it's tilting in the right direction. the question is what valuation do you want to place on that but it is worth remembering that the market in aggregate hasn't become more expensive relative to earnings for like almost 12
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months, 10 months let's say since last june. >> we are down 0.7% with 55 minutes left. shares of apple are lower today. josh lipton has the story for us >> so, wilf, the european commission has issued what it calls a statement of objections. that's a preliminary finding here that apple distorts they say competition in the music streaming market and abuses its dominant position. here is the executive vp of the ec on that news. >> a preliminary finding is that apple exercises considerably market power in the distribution of music streaming apps to owners of apple devices. on that market, apple has a monopoly >> remember, this case started with spotify, which is a rival to apple music apple clearly not backing down here saying in a statement the
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commission's argument on spotify is the opposite of competition bottom line here, how worried should apple investors be about this news? gene munster would argue they shouldn't be at this point at least. his point, european regulators do step in, they can order changes, but historically those changes, munster says, have not had long-term impacts on big tech business. >> i was about to say, josh, when we look back, there's always been headlines coming out of the eu, even when it's gone through to punishment, it's been relatively small when you consider the scale of 90 plus billion in revenue in just one quarter that we learned from apple this week. >> yeah, that's true, wilf you could have european regulators try to hit apple with a fine it is hard to imagine what fine they could come up with that would really dent apple.
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you're talking about a company with a net kcash position of $83 billion. they could impose some type of changes to the app store business model but of course apple then would counter, they would fight that in court i think it's important to remember this is the first step in what could be a very, very long process european commission, apple, have been going head-to-head for years over this other tax case there was a statement of objections there too apple actually won, but that battle continues that has been going on for as long as i've been at cnbc. it actually started in 2016 and continues. it gives you a sense of how long these battles can rage for. >> we've got a new administration in place here in the u.s., apple certainly in focus where the app store is concerning everything we're seeing in terms of antitrust around big tech more broadly you have somebody coming into the ftc who has done a lot of research and talked a lot on this topic too
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i just wonder if we're sort of at, and i realize this could be all held up in court for years at least from an eu standpoint, but if we're at a tipping point with the eu and u.s. getting on the same page around tech regulation >> i think that is another risk that maybe other regulators look at this, what's going on in europe, and take their cues from that and it broadens the scope there. also of course this is also coming, morgan, as apple and epic head to court officially. that does kick off in court on monday that will also possibly have some ripple effects. the risk there too, the domino effect if apple wins that, they say it probably makes the doj less likely to bring any kind of case but the flip side would be just as possible. after the break, is there a chicken shortage in america? we'll ask the ceo of restaurant brands, the parent of popeye's and burger king about reports of scarce poultry supplies. plus how reopening is impacting
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the restaurant industry. you're watching "closing bell" on cnbc. esg is responsible investing. who's responsible for building esg into your investments? at pgim, the pursuit is on for outperformance. as active investors, to outdeliver with customized strategies, integrating esg best practices into our investment decisions. as asset managers and fiduciaries, to outserve, with our commitment to better esg outcomes. join the pursuit of outperformance at pgim. the investment management business of prudential.
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restaurant brands beating both earnings estimates for the first quarter. the stock up 13% this year joining us now in an exclusive interview is restaurant brands ceo, jose cil. thanks for joining us. >> hi, wilfred, how are you? >> hungry after pouring over the different pictures of your menus. first these strong results, is that a reopening theme or since it falls mainly in q1, is it other factors and has it continued into q2? >> well, we're excited about the progress we made in q1 we obviously have seen some benefits broadly from reopening in the u.s but other markets around the world are struggling still with the pandemic and working through lockdowns and the rollout of the vaccine. so the strength of the performance in the quarter, we
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saw some good momentum in terms of systemwide sales growth we had a positive q1 versus 2019 which shows the progress we're making we had a really strong start to the year and a strong performance in digital we think it was the good plans we put in place and the execution all of our franchisees are delivering in the restaurants every day. so we think there's strong demand from the consuming public here in the u.s. and in other markets around the world but we think it's just the beginning. we're excited about our long-term plans and look forward to push those plans. >> are you expecting challenges with full reopening, whether that's people's reluctance to come back or even labor shortages and problems on that front, which we've seen headlines about from various hospitality sectors? >> what we've seen is a really strong push over the last 12 months on the off-premise business our drive-through, our delivery business has been really strong and our digital platforms that
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we've developed for all three brands have really helped us connect with our guests and deliver in the most difficult of circumstances. we think we're well positioned as things start to reopen across the globe to deliver more and more of our great products to our guests we're seeing some opportunities in terms of labor and hiring and our franchisees do a great job locally to drive that. but our prospects long term, we feel really good about the plans we have in place and the opportunity to capture the growing demand that's out there for our burgers, our chicken, our coffee and great breakfast. >> on coffee and sticking with reopening, are you seeing a big pickup in demand for takeaway coffees in the mornings as people start to go back to work in a more normal way >> it really depends on where. in the u.s. we're beginning to see the routines come back in many parts of the country, so breakfast is growing as a result in canada with tim horton's, we
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still have lockdowns in ontario and other parts of the country so the morning day part is somewhat restricted. that said we've made really good progress with our digital business in canada there's some other work we've done digitally to drive increased performance and increased visitation so there's still work to do on that front but we're excited about the progress and think over time as people get back to their routines, get back to the offices and taking their kids to school on a more regular basis, we'll be well positioned with the investments we've made to deliver on all the products. breakfast, lunch, dinner, snacking or delivery. >> let's talk chicken, jose. clearly the popeye's chicken sandwich was the thing that reinvigorated that category over the last three or four years and everyone's fallback, even red lobster now has a chicken sandwich, which i think is a sign of the times, burger king as well. you have the new sandwich,
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original and spicy versions. is demand continuing to surprise you and is supply of chicken a problem now? >> popeye's started the so-called chicken wars back in 2019 we had an incredible 2020 as a result of the performance of that chicken sandwich and the rest of the business it brought along with it. bone-in chicken and side items we had a very strong first quarter this year, so our two-year comparable was 30%, which shows that the popeye's business is strong, demand is there for the chicken sandwich we think there's an opportunity with burger king as well we haven't seen any real supply issues on our end. we have really good partners on the supply side and distributors so we worked closely with them to ensure that we have high quality, great tasting chicken to deliver to our guests we'll stay close to it it's a topic that's top of mind for all of us. even my wife asks me about it on
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a regular business, to make sure we have enough chicken at popeye's and burger king to deliver to our guests but it's something that's top of mind we look pretty good as we head into the second quarter and into the summer months. >> which is your favorite, the popeye's or the burger king chicken sandwich >> i love them all i like the popeye's classic and the burger king spicy topped off with an iced coffee from tim horton's. >> that's so diplomatic, jose, come on. to throw tim horton's in as well, i'm disappointed anyway, we'll go on to the next question what about vaccinations, are you going to require workers to get vaccinated are you going to ask customers when we're back to completely normal to show evidence of having been vaccinated >> we're seeing a strong rollout of the vaccine here in the u.s. and the uk as well and other markets. obviously that's a decision that folks are making personally. we are working closely with municipalities and the
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government authorities to ensure that we do our part as a restaurant business, we do our part as an employer here in the u.s., canada and all around the world to take care of our folks, our teams, franchisees and our guests that come in every day. >> jose, good to see you, thanks so much. >> appreciate it have a great day. >> we've got 42 minutes before the bell and the dow is currently down 217 points or 0.6 of a percent the s&p 500 is down 0.8 of a percent right now. up next, the biden administration outlining its plan to raise capital gains tax but the higher rate could hit more people than you may think we'll explain that next. as we head to break, check out some of today's top search tickers on cnbc.com. amazon topping the list followed by the 10-year yield, apple, twitter and tesla. we'll be right back. what i w no♪ ♪ when i was younger ♪ you need a financial plan that fits the way you want to live in retirement.
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welcome back we've got 40 minutes left to go. major averages are lower on this last day of april, but let's get a check on some individual market movers. shares of skyworks tumbling despite posting an earnings and revenue beat s skyworks also missing gross margins due to rising costs and shares are down 8%. clorox also falling today after reporting an earnings beat but a revenue miss the company also providing weak full year guidance due to higher
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commodity and manufacturing costs. those are down a little over 2%. plus you can catch the clorox ceo on "mad money" tonight at 6:00 p.m. eastern. the debate over capital gains tax is heating up this week as the biden administration lays out its plan to pay for big spending bills robert frank has a look at why more people than you might have thought will get sftuck with a higher tax burden. >> biden says his plan to increase capital gains tax would only hit taxpayers who make more than $1 million a year, about 500,000 people but economic research shows those million dollar earnes actually change every year so the total number would be larger they looked at million dollar earners over a nine-year period. only half made the list for one of those nine years. just 6% were million dollar earners over the entire period it also found that one-time capital gains windfalls were the big reason that many people made
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the list and fell off. a majority of those millionaire owners hit the number in a single year by selling a company or asset they may have spent years or even generations building capital gains accounted for half of those one-time millionaires as the study said, millionaires are a highly transient group of taxpayers. because the tax hike would not account for asset inflation and because this is an ever-changing group, the true number of taxpayers who could ultimately be hit by this capital gains increase is likely to be in the millions, not 500,000, over the next decade. guys. >> robert, as you know from my perspective on this, the key thing for me should have been addressing the step-up basis in capital gains which should have been front and center. either way, parking that for just a moment, i think one aspect that doesn't get discussed that much over the last couple of weeks, if you hold something for longer, you don't cross into that would be 50% capital gains rate, it's only for shorter term capital
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gains. i also think while 50% on capital gains is probably rather a lot, you are talking about capital gains. it's only the tax on the gain, not the whole amounting. i feel like everyone is talking about this 50% level as if it's the same as your income tax where it is quite literally 50% across the board as opposed to just the tax on the gain itself. >> well, that's what's revolutionary or at least new about the biden plan is that short-term gains, ordinary income, and long-term gains, they would all be taxed the same, right? so right now long-term gains are capped at a lower rate than ordinary income. under the biden plan, long-term capital gains which are charged the top rate of 20% would go up to normal income rates which is 39.6%. what's interesting about, this wilf, and in many people's minds there should be a difference between things that you hold for a short term, long term and how
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labor is taxed what's interesting about this and why it would raise a lot of money and is very controversial with investors, basically all of those rates would be the same. when you add on the state income taxes that you would pay plus the 3.8% obamacare tax then you get up into the 40s and mid-50s in the high tax states when you add in the state levels. >> robert, thanks so much. great to see you as always. still ahead, the inside scoop on the great outdoors. we'll speak with the ceo of columbia sports wear about the boom in outdoor activities. plus twitter tanking after last night's results it's the worst performer in the s&p today. we'll ask jeremy lu what he makes of today's move. here's a check in on bond yields moving lower to close out the month. the 10-year, 1.63 or so today. "closing bell" back in a couple.
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31 minutes left of the session, down 0.6% on the s&p
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500. a little bit more than that for the nasdaq, a little bit less for the dow, ending off what essentially is a flat week for the s&p but a very strong month, up 5.3% for the month of april there's the sector performance today. real estate, top, energy down 2.5% oil prices down a couple of percent. but energy in fact higher on the week so it's a bit of a pullback from a strong week amid a slew of aerospace and defense earnings. >> shares of northrop grumman one of those names that record this week, set to end higher after posting strong results i spoke with kathy warden in a wide-ranging interview covering everything from defense spending to nuclear modernization, even the chip shortage since she attended the white house's recent semiconductor summit. >> northrop grumman has our own foundries where we support
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electronics but we rely heavily on the global supply chain so we wanted to make sure that the voice of aerospace was heard and the consideration for our needs was also incorporated into the thinking of the administration i'm really pleased with the administration's intent to invest in research and development and to snincentiviz more domestic supply for advanced computing it's not just important to the aerospace and defense industry but as you noted to every industry which relies heavily on advanced computing >> now, in terms of amd specifically, she told me northrop grumman is a tech company in programs ranging from the b-21 bomber to the icbm replacement program which is worth $100 billion to even habitat for humans in space. in terms of that type of next
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generation technology and how it's being applied to national security, this is very much in focus for northrop but also other contractors as the threat landscape continues to evolve and change but as it is widely expected, wilf, the u.s. defense budget will be flat lining over the coming years and so there is this push to basically extract more value, be able to do more with less, with more of these technologies. >> oddly much more tied to -- the stock prices to the size of the defense budget is it hard for them to shake off what's happening to that budget? >> northrop grumman, you can say this about lockheed martin or l 3 harris, all of these companies that have very big defense books or are even primarily defense focused, that, yes, those stocks for better or worse, whether they should be or not from an investor standpoint, have been trading in line with expectations around that defense budget the expectation now is -- there had been fears and you saw the
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stock sell off because there had been worries that you'd see a biden administration come in and cut that budget pretty aggressively that has not been the case flat is the new up for those budgets. warden certainly believes that is going to be the case. albeit at these elevated levels we've seen in recent years for defense spending, but northrop grumman specifically with some of the big ticket programs that it has right now, again, as another analyst mentioned to me is poised to become the fastest growing defense company over the next decade given everything we're seeing with nuclear deterrents in space and the like. >> and the stock is up 3.8% over the last week. it is time now for a cnbc news update. rahel solomon has it for us. >> hello, everyone the state department says that americans were among the victims in that deadly stampede at a religious festival in israel at least 45 people were killed and 150 injured. in ohio, a judge has ordered the columbus, ohio, police
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department to change its tactics for dealing with protests. the ruling says that police improperly used tear gas and pepper spray against peaceful demonstrators during black lives matter rallies last summer. nasa giving its mars helicopter more time to scout the landscape. flight tests were set to wrap up in early may but they have been extended after a flight attend failed yesterday. and tomorrow was the original deadline to withdraw u.s. troops from afghanistan president biden pushed the date back to september 11th see how america got to this point in afghanistan, our longest war ever, tonight on the news with shepard smith. you are now up to date morgan, i'll send it back to you. >> rahel solomon, thank you. we'll be watching that mars ingenuity helicopter so exciting. the biden administration, meantime, we're just going to go to break because we're having some technical difficulties with the camera 'lbeacinine.ut [music: “you're the best” by joe esposito]
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age before beauty? why not both? visibly diminish wrinkled skin in... crepe corrector lotion... only from gold bond. the ceo of emergent biosolutions now walking back his comments to cnbc about cross contamination at the j&j plant meg tirrell has the details for us hey, meg. >> hey, wilf this is a plant that had to discard up to 15 million doses
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of the j&j vaccine after they were ruined. we had the ceo, bob kramer, on this show to ask him about reports that there was cross-contamination with the astrazeneca vaccine which at the time they were making at the same planting. here's what he said then and then last night on their earnings call. >> it isn't the case or wasn't the case where an ingredient from one vaccine contaminated the other. >> the batch was likely contaminated when one or more of these precautions did not function as anticipated, resulting in the transmission of the astrazeneca virus to the johnson & johnson production suite. >> guys, i got in touch with emergent last night to ask what changed in the last month or so. they said nothing changed. they said mr. kramer simply misspoke on your program that does remain on pause until the company can fix the problems identified by the fda in a
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warning letter they expect to submit their response within days and are hopeful they can soon return to producing tens of millions of the johnson & johnson vaccine doses per month at that plant. guys, back to you. >> for more news on the covid-19 surge happening in indyia, president biden is set to restrict travel to ithe u.s. dr. gottlieb, thanks for being with us this afternoon. >> thanks a lot. >> in terms of these travel advisories, these restrictions where india is concerned, given what we've seen in recent days and recent weeks and how, for lack of a better word, aggressive you could say the federal government has been about putting advisories in place around other countries, are you surprised it's taken this long? >> not necessarily surprised it's taken this long i think we need to be clear about what we're hoping to accomplish by these travel restrictions most of the data shows that they
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have a neglible impact on introduction of the virus into the united states. i can assure you that the variants that we're seeing circulating in india, including the new 617 variant are here in the united states already. so it's unclear how much we'll get from a travel restriction. if we're going to do this, we ought to be clear about what we're aiming to accomplish and why we're maintaining travel restrictions against countries like china and uk which have very low levels of virus in both of those countries so we need a coherent strategy for lifting these after implementing them. >> my british cohort i'm sure would agree with you where the uk is concerned in particular. just from a science standpoint, why would it make sense to put these restrictions in place right now? >> look, there are some studies that show that when you implement travel restrictions, and most of the studies that have been done have looked at this in the context of an influenza pandemic, that you can delay introduction of a virus
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into a new region, that you slow the introduction and maybe reduce the peak of an epidemic if the u.s. had introduced travel restrictions that weren't so leaky, perhaps we could have delayed the introduction of the virus more and reduced the peak of the epidemic. at this point we're not going to prevent introduction of the virus from sindia. i think the only rationale for why we might implement travel restrictions from india is you want to reduce the introduction of this 617 variant that we don't fully understand the best way to reduce that risk is to get more americans vaccinated that's the best back stop against the spread of that variant, not restricting travel at this point. will it have an impact perhaps a minor impact on the margins in terms of reducing introductions. it's not going to dramatically affect our trajectory and probably do more harm to india than any good it attributes to us. >> so let's move on to
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vaccination rates here in the u.s., dr. gottlieb clearly there's plentiful supply are the levels of vaccination good enough that we can continue as things are, or what do you make of possible suggestions to pay people to actually get vaccinated, whether by the private sector, big companies, or the public sector >> well, the vaccination rates are very good. it's been an outstanding effort by the administration to get people vaccinated, but it's going to slow down because a lot of the more intense demand, if you will, of people who wanted to get vaccinated have been worked off and the people who haven't been vaccinated are more marginal customers they're people who maybe are reluctant. but there are a lot of people who also work all day and at night and can't get to vaccination centers or people who just aren't as anxious to get vaccinated and will need a little more coaxing and maybe some marketing and more information about the vaccine. so i think we can continue to chip away at it. i think vaccination rates will
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slow that doesn't mean we're doing a bad job. i think it's inevitable that it will start to slow it's like any other product, when you get into areas with softer demand, the uptake isn't as brisk so we have to do more to push it out into communities. things like vaccination buses where they drive up into communities and people can show up and get vaccinated with no wait, that's how we'll get people vaccinated. also delivering vaccine through work sites. >> in terms of softer demand, you could make the argument that we have seen the peak day in terms of daily distribution of vaccines as well to your point if we don't reach what the federal government is going to define herd immunity, maybe not enough americans want to get the shot that are out there that haven't done so, what does that mean from a policy standpoint? >> well, i don't think we're going to reach anything that resembles true herd immunity where this virus stops circulating. it will continue to circulate at low levels i think we'll reach 170 million
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people vaccinated by the summertime, by the end of june, that includes kids pfizer as requested to start the vaccine for people 12 to 15. so we'll get to 170 million. if we continue to chip away at it through the summer, maybe we get to 200 million by the start of the fall. i think if we're at those kinds of levels and we're not going to be far off them. if we're off them it's not much. if we get to those levels, that's enough protective immunity in the population through vaccination that it's a pretty big back stop against epidemic spread of this virus because you're combining it with natural immunity there are people who have had this infection who have immunity from natural infection who aren't getting vaccinated. they're less likely to get infected and less likely to transmit the infection. >> dr. gottlieb, we saw this week mayor de blasio saying he wants to see new york fully back to normal by early july and
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cuomo saying potentially even before then. all of us on the team were wondering, are you back to normal are you going back to restaurants? is it safe to do so? >> look, i'm back to normal in certain aspects of my life, not in others. my children have resumed a lot of their normal activity we're still being careful doing things outside they still wear masks to school. things where i have discretion, where i can preferentially do them outside or in a lower risk way, i'm still doing them. when i go out to eat and i am going out to restaurants, i eat outdoors i'm still wearing a mask in confined spaces. i'm going to be traveling on a plane on summnday i'm going to wear a mask door to door i'm still taking precautions because the virus is still around and a high prevalence i think in two or three weeks we can start to relax the steps that we're taking. i don't think we're quite there yet. i think virus levels will start
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to collapse all through may. >> playing it safe but optimistic just what we'd expect, dr. gottlieb, thank you very much. >> thanks a lot. still to come, disneyland reopening today with new tech and pent-up demand we'll go live to anaheim, california, next in the market zone the moment you sponsor a job on indeed you get a shortlist of quality candidates from a resume data base claim your seventy-five-dollar credit when you post your first job at indeed.com/promo cal: our confident forever plan is possible with a cfp® professional. a cfp® professional can help you build a complete financial plan. visit letsmakeaplan.org to find your cfp® professional. ♪♪
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sales are down from last quarter
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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. we are now in the "closing bell" market zone, commercial-free coverage of all of the action going into the close. mike santoli is here and today we've got barbara duran with us as well.
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good afternoon to you, barb. major averages lower on the last day of april but the dow, s&p and nasdaq on track for big monthly gains. the nasdaq higher for the sixth straight month, its longest monthly winning streak in more than three years and the monthly gains for the s&p, 5% for the week, flat for the session, down 0.8%. what's really driving that little bit of a pullback today >> i don't know if there's a specific driver except for the overall dynamic where investors are kind of just slughrugging w they see great economic numbers coming through we're up 11%, 11.5% on the s&p year to date over 5% of that happened in just the first two weeks of april that's the way the market runs, it kind of gets the returns in these chunks and then it settles out. so a lot of people thought, and maybe there still is, the makings for something more of a pronounced pullback because of where sentiment and positioning were and how far we're up in a year plus. you might be able to consider it
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a victory that we've essentially just gone sideways a couple of weeks. >> to that point, barbara, what is the next catalyst if not strong earnings that is going to break the s&p out of that range? >> yeah. i think the problem is right now the market is significantly discounting lots of good news. we all know the reasons. the big fiscal stimulus, fed support. we've got nearly $4 trillion in savings on the sidelines that's both corporate and personal. you've got consumer confidence rising as the vaccine is really taking hold and getting people out of the house we're starting to see demand explode. and the problem right now is valuation. and so what we've been seeing since the beginning of the year is this rolling rotation people are chasing stocks that seem a little undervalued. then they get overvalued, people pull back. so as mike said it's a bit of a victory to be going sideways here i think the next catalyst will be a negative one. inflation continues to be a big
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worry, but we are not going to know if it indeed is transient as the fed and investors have decided to accept what the fed is saying for quite some time. we won't know it until the fall because we are seeing supply challenges. >> let's take a look at energy stocks chevron and exxon lower. chevron reported in-line eps and revenue beats. the better than expected results follow a string of quarterly losses as demand for oil plunged. wti is down but way up from levels a year ago. barb, i just want to get your thoughts on the two oil majors, the results today and the fact that they're not only under pressure today but despite a very strong start to the year, the fact that energy too seems to be pulling back at this level. >> i think this is part of the phenomenon we were just talking about. you see energy is the best
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performing sector year to date it's up over 30% exxon itself is up 40% chevron is up nearly 23% so the question now is, okay, we don't yet have a global synchronized recovery. that's where we're expecting more demand to come. we're certainly seeing it in the u.s. you also then have supply issues opec and others have been relatively disciplined but history has shown that may not last so it's always the question of where will oil prices be going forward. i think right now a lot of good news is in the stock exxon for instance is a well run company. there's a lot of things going on, a 6% yield chevron also has a good yield. but right now they're probably fairly valued unless you see oil prices really start to climb much higher. >> energy is the best performing sector this week despite today's pullback. >> there has been a little bit of a revival of the cyclical reflation type assets. if you look at a year-to-date of exxon or chevron, it looks
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essentially the same path of reflation expectations, the cyclical upturn and high beta stocks so it all fits together. it's not necessarily about combing through each company's books but right now they are holding that way and that has been an outperforming group as the nasdaq has not gotten much benefit on a net basis from those great tech earnings. >> disneyland opening today. julia boorstin there with the details. >> reporter: wilf, the park is back open with mandated masks and 25% capacity as well as social distancing, plus the return of 15,000 cast members, that's what they call employees here, for this step in the phased reopening of the park today does mark a period of massive loss disney lost $7 billion in operating profits in calendar 2020 due to the pandemic and the stock is up 135% from its lows last march 18th. now analysts barton crockett
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projects the parks will be bringing in pre-pandemic revenue levels by disney's fiscal 2022 there's no official word on how much demand there's been for this park yet, but tickets for disneyland, for this park, were sold out through may guys, back over to you. >> mike santoli, so now the stock can perform well because it is a reopening play >> exactly you can kind of win multiple ways here, although it has calmed down as the stock really did get repriced aggressively, bore that momentum with disney plus obviously it's going to help in terms of forward cash flow and earnings expectations for disney adds something to the story beyond just streaming. this stock has already gotten a fair amount of credit for having multiple things figured out at this point. >> barbara, streaming is really what's powered this stock in the recent months. the fact that you now put really this money-making piece of the puzzle together for disney, is it a catalyst for a move higher? >> you know, i don't think it is
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actually, morgan, because i think most of the performance has been because of the streaming and their movies the parks and resorts is 25% of their business but people of been expecting there will be a reopening and gradual in some areas so it's a positive i think there's a good long-term story here i own it in different accounts but in terms of adding here. you can add it, but i don't see a lot of near term upside. >> twitter is the worst performer on the s&p 500 today, plunging 14% despite beating earnings estimates the company warned of rising expenses, possible slowdown in user growth. the cfo on "squawk box" earlier this morning with his outlook for twitter. >> we expect qs 2, 3 and 4 to see low double-digit growth with a low point likely in q2 so there's no change to what we said before. as economies open all around the world, our product improvements are designed to help people continue to find what they're looking for, whether it's around sports that they're watching in
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a stadium as opposed to on their sofa, politics, entertainment or whatever the topic might be. >> mike, it's really interesting. you take this stock reaction and just the results after the bell yesterday and compare them against another big tech name that reported yesterday, amazon. amazon's advertising revenue now on a quarterly basis is seven times larger than twitter. i mean how does it speak to the fact that if they are winners and losers before the pandemic, those have just become even more entrenched if you will and even within tech a bigger shakeout. >> twitter has never been smaller in terms of the overall digital ad pie you know, since it's gone public seven or eight years ago so i think it's an issue there. i think part of the reason for people owning twitter and thinking it's a valuable asset is just the stickiness of the user base and deep engagement they still do have and as a
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realtime engagement machine. they haven't been able to monetize that. maybe they're working on that and things they can do but it's always been an asset value play it's big because it has this many people and that many eyeballs committed to it, not because they have figured out how to earn a lot of money off those eyeballs. >> bob, wh-- barb, what's your take on twitter? >> and the googles of the world and snap it's a show me stock i don't own it, i don't plan to own it it's suddenly gotten beat up enough we'll see where it comes to rest. management does have a plan, they're very much in the brand advertising and very little in the direct monetization aspect which everybody else is in the problem with this is that the user engagement looks to be down they were talking long-term growth just at the end of february of 20 plus percent. now it's looking more like 11% to 13% in user growth. that's the problem
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where do advertisers want to go? to the greatest platform. >> two minutes left of the session. mike, some proper taking after a great month. what do the internals show >> there's definitely an undertow of trimming back of positions. it's well over 2-1 to the negative side so whether that is a month end kind of shifting portfolios around or not, you did have some give back right there. we want to look at the consumer sector, equal weighted index versus consumer staples. during the month, you really still have had a cyclical tone to the market, even though the overall market hasn't done anything in two weeks. the more economically geared areas have done very well so that's encouraging if you're looking at the macro message of what's going on. consumer discretionary equal weight also, excludes the heavy outsized effect of amazon on that index which is why you would look for it right here
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the volatility index has perked up a little bit. i've been characterizing it as in a range and it is in a range between 16 and 19. but that 16.25 is where it closed a couple of weeks ago the s&p is at the same level s&p is flat and vix is up a couple of points maybe people are deciding to lock some in you have the seasonal effects and people wondering whether we're in for a choppier period it's worth watching to see if this does pick up going into next week, wilf. >> let's have a look at the final hour of trade, final minute, 50 seconds or so, down 200 points on the dow. it was down 275 at the low of the session. the s&p 500 down three-quarters of 1% and the nasdaq down zm0.9% the best performing sectors utilities and real estate with energy and tech at the bottom of the pile energy down 2.8% but still up
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3.5% for the week as a whole we do have oil down 2.4%, gold and silver down slightly the vix is up for about 6% today and the 10-year around 1.63. at the close, morgan, we are down 0.8% on the s&p, but flat for the week as a whole and up 5% for the month of april. welcome to "the closing bell." i'm morgan brennan in for sara eisen along with wilfred frost also mike santoli. as you just heard wilf say, we did end the day lower for the major averages the dow is down half a percent, 181 points, low up for the month of april a similar story for the s&p as well the s&p closing down about 0.7 of a percent or 30 points. 4181 is your level there however, it just finished its
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best monthly gain since november the nasdaq as well finishing the day lower, down 119 points or 0.8 of a percent or also higher on the month of april i'd also just point out the dow transports, which are finishing their 13th straight week of gains. we haven't seen a run like that of the transports in more than a century. meantime twitter shares tanking on week user growth and guidance coming up, jeremy lu on the outlook for social media stocks as the economy continues to reopen plus shares of columbia sportswear under pressure despite an earnings beat the company's ceo will break down those results and give us his take on the state of the consumer. meanwhile, barbara doran is still with uls and liz young joins the conversation now as well but first, mike santoli, to you. this was such a busy week
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between earnings, the fed, president biden's address to congress this week i could just keep going down the list. >> and guess what, it all nets out to a pretty flat performance by the index what we've had is really good economic and corporate news colliding with a market that has already built in a lot of expectations for good things you have investors with relatively full allocations to the market you look at retail and institutional portfolio levels all that is to the good. i don't think this week was necessarily decisive or worrisome in any way but it does keep you in the same mode of saying we're weighing all the good that's happening right now with the concerns that we might be seeing peak growth rates and then the challenges down the road, whether it be from somewhat higher yields or inflation getting disorderly to the upside who knows if the fed will have to start talking about easing back on easing policy before too long. >> liz, clearly fantastic data, fantastic earnings, but can it continue at that pace for the
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rest of this year? >> yeah, i think, first of all, when we look at the pullback today, we can't hit new highs every day. any time we're heading into something where the market is racing to the top, we're likely to have days like this not only do we have a fed that's abundantly clear that they're not going to move, we have 10-year yields that have relaxed since the end of march and a ton of economic data that's going to continue to be strong throughout the summer so it's a friendly environment there. on the other hand, we have valuations that are challenging. we have 95% of the s&p tragds above a 200-day moving average so some of the technicals and fundamentals are looking a little bit frothy. typically when that happens you'll see mixed results in the market for the next 90 days, three or four months, but over a 12-month period you can still see strong results and strong returns. >> barbara, what do you think
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the small caps are signaling right now? the russell 2000 was lower on the week and just in general for the month of april it has underperformed this was the basket of stocks that was seen as a reopening gauge. now with tax changes in the mix, discussion or debate around inflation, is this what's dinging these names? >> i think a lot of it is that small caps typically perform well in the early stages of a recovery and we are well into this recovery. so i think small cap has probably seen its day. i don't think we'll see another big room but if we start to see heavier tax burden, that's much harder on these companies they don't have the balance sheets or leverage that they can resort to so we'll see tax is not yet a big issue you haven't seen that yet and frankly i'm not sure there will be because i'm not sure that biden's harshest proposals will get through congress
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congress is majority millionaires on both sides. >> mike, a lot of the faang plus microsoft type names pulling back today but interesting to see tesla bounce significantly after a soft week and also bitcoin bounced significantly today. >> yeah, there's been these efforts to get the party restarted in some of those areas on fridays it seems like there's a huge flow of people buying call options in tesla, let's see if we can get this thing working. it's also felt its pain. i would also just add i think small caps to some degree got to those heights because of tons of retail investor kind of aggressive flows in that direction. if you look at some of the other tells in that area, whether it's the hypergrowth tech stocks, the ark names and things like solar, they have all had pretty serious pullbacks. the russell was to some degree riding along with those trends in addition to also week a cyclical indicator.
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>> credit suisse raising its price target representing a more than 9% increase they cite a red hot economy which is driving reasons to boost the stock market as well lee appeared earlier this morning and predicted a bearish outcome. >> something is going to give in the end. i suspect the dollar will give and interest rates will rise let's face it, the market is facing the fact that taxes are going up, interest rates are going up, inflation is going up, and we have a reasonably richly appraised market so cyclically i'm engamiengaged. i've got an eye on the market. i suspect the market will be lower a year from today. this is not going to ends well but nobody, myself included, knows when it's going to ends. >> barb, is all of the great news that we have out there priced in? >> i think a significant portion
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is but as liz said, i think we're going to continue to see strong growth through the summer and into the fall. and so really the question is going to be where do valuations go i think when they get too stretched, people sell and rotate into something else and i think that's what we'll see all year long. the bull market underpinnings will be intact for a long time corrections are normal but it's a question of where the valuations are at year's end there's a lot of cash that has yet to come into this market. >> liz, i want to get your thoughts on this too because a lot can change in a year as we saw in the past year but next year fiscal stimulus is not in focus there's a strong possibility that you start to see the fed pull back at least a little bit, maybe on the taper money side and then you do have the possibility of taxes, tax reform, more regulations, et cetera >> yeah, i think actually if the market is lower a year from now, it's not necessarily because of taxes. it would be because of an
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inflation problem or it would be because of the fed's reaction function to an inflation problem. so i don't entirely agree with lee on that point. but looking at just fundamentals of the market and the strength of earnings, we do have to hand off the baton at some point from policy support to fundamental support. there is a big question mark of whether or not we can do that. i think we can i don't think it's going to be easy, but i think we can get through it and i do think the market will make it through that so i also disagree that we're going to be lower a year from now. i think we'll be higher than we are today but not a huge amounting higher i think some of this will be a little bit of a grind. >> mike, for so long we watched whether the vix would fall below 20 and today it's picked back up again a little bit if it does jump back up, is that a warning sign >> if it jumped above 20, i don't think that's a trigger in itself but if it starts to trend higher, then it's a signal that says be on guard or try to
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figure out what's actually happening below the surface that's causing the anticipation of volatility to go up, which is what the vix does measure. it's what people are willing to pay for hedges one reason the vix sometimes goes up, often, lots of stocks seem to be correlated and move in one group as opposed to lots of give and take between sectors and stocks so it usually means more of a macro driven market. people are focused on either fed or other conditions. but i would say you definitely have to be on guard if it seems to sustainably turn higher than 20. >> liz, i want to go back to that inflation topic again because you mentioned that could be on the horizon in 2022. does that mean that you don't see it as an issue this year despite the fact we're seeing so many comments about not only higher costs but higher prices being pushed out to end markets by companies in this earnings season >> i don't think that it's going
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to be a huge problem this year because there's also been so many signals that we won't know if it's transient or not i think we will get higher inflation readings before the end of the year but there's the expectation that they're going to self-correct at some point. we won't know if they're going to be sticky or persist until 2022 then it's more a matter of are they persistent enough that the fed has to move? one thing that's interesting, if you look at cpi numbers, between 1% and 3%, the market tends to move up so we have some room here if we're looking at a fed average target of 2%, we've got even more room so i don't think 2021 is the inflation problem, i think 2022 is more of the problem. >> liz and barb, thanks so much for joining us good to see you. >> thank you it was a tough day for twitter. the stock tumbling after disappointing user growth and guidance up next venture capitalist jeremy lu will join us he knows a lot about this space.
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and the spac trending, whether things are overvalued or not mike santoli looks at whether the huge jump in personal savings can hit the economy. we're back in 90 seconds
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twitter plunging today following last night's earnings despite a beat on the top and bottom rline the company failed to deliver on its daily active users, gave lower than expected guidance for the second quarter shares finishing the day lower by 15%
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for what this all means for the social media space, let's bring in jeremy lu jeremy, good to see you, thanks for joining us. >> thanks for having me. >> what is twitter failing to do at this stage of its life when it comes in a week where clearly its rivals are doing incredibly well >> i'm not a public markets investor so i'm not sure i'll have the best insight as to the recent twitter stock move. as venture investors we take a long-term perspective, a seven to ten-year time horizon on that basis i think it seems as though perhaps investors were a little disappointed with the user growth being at the low end of expectations for twitter, but, you know, i think maybe the larger issue is the revenue guidance was low but as a vc, i would just take a long view, this is a quarterly view on the whole i'm pretty encouraged about the recent
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announcements they have made on product, including the paid subscriptions they have been talking about, the newsletters, the audio spaces, all of which will drive engagement and expansion beyond advertising towards new revenue streams. that's a trend that we've seen a lot of startups, which is more my world, moving towards in the media business subscriptions, direct payments, whether it's to influencers or to companies, because people just seem to be more willing to pay for content. so you see that with the athletics, substack, twitch, fourth wall, the rise of merch as a business model for creators, it's all supporting that. >> jeremy, it's morgan you just hit on my question to you, which was going to be whether it's twitter or some of the other more established social media names out there in the marketplace. it wasn't that long ago that we were talking about the fact that there was no competition and that new companies were going to have to focus on other areas to
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really make a dent and yet here we are having this conversation this afternoon about all this new generation, if you will, of social companies that do seem to be starting to pull some eyeballs and attention away from the likes of twitter and facebook, et cetera. >> yeah. you know, people have been saying social is dead for a really long time and yet there constantly seem to be new social things popping up. people say social is dead and tiktok came along. people say social is dead and now we've seen clubhouse starting to take a lot of viewer attention. in that whole time, you look at even twitter, its stock is up 2x in the last year snapchat is up 3x in the last year even with these new companies coming along, i think you're finding that even the big companies are still holding up pretty well. >> where do you stand on the pace of spacs that we'll likely see for the next year or so and all ipos, and do you think of
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them as one and the same presumably you don't think the pace can continue. >> wilf, i think you hit on a great point, which is that the window is open, clearly, for companies to get public and there's a lot of different ways they can get public. we've seen a lot of very successful ipos happening over the last couple quarters we've seen some direct listings, coinbase notably relatively recently and then we've seen all these spacs. they're all different tactics towards the broader opportunity to be a public company we've seen a lot of companies that have grown as private companies to a really substantial scale and lot of value creation over the course of the last five, eight years so it's terrific to see so many of them being able to become public and so a broader set of investors now gets the chance to invest in them. >> speaking of companies going
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public, the honest company poised for an ipo next week. i realize because of that you may be limited in terms of what you can say or comment there, but in general i wonder how you think it speaks to, again, this next generation, this new crop of consumer-facing companies, whether it's packaged goods or whether it's retailers that are starting to come to market right now and what makes them so different from what already exists >> yeah, there's not much i can say specifically about the honest company because of the s.e.c. quiet period. but i think you're right, the broader observation that there have been so many companies that have built themselves to a really substantial scale and revenue. many of them have gone public and done extremely well and there's still likely to be many more to come and so we used to talk about unicorns being this incredibly rare thing private companies are worth more than a billion dollars and now we're seeing those worth
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$10 million. they can be public and they are becoming public. >> and the honest company has jessica alba, going back to your point about influencers and celebrities. jeremy liew, have a great weekend. >> thanks so much. let's send it over to mike santoli for a look at wage growth and personal savings in the u.s. >> just historic levels of personal income growth in the past quarter a lot of that was government stimulus payments but this is a measure of wage and salary growth that does not account for that it's basically job focused so it's pretty much apples to apples throughout history. this level is basically above 4% you have to go back to before the great financial crisis and really to get consistent numbers up here, it was in the late 90s. so this is very positive news and show retained jobs. this is fattened up by a lot of those transfer payments by the
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government but we had this huge spike during the pandemic, nobody could spend, a big drawdown. but still above a prior trending now a snap back up as we got those $1,400 payments. so this is clearly a buffer. this is fuel for further growth. you wonder if it's going to also fuel more talk of overheating and bottlenecks in the economy and people rushing to get this money out there or if people will run with a bigger cushion than they got used to before the pandemic, guys. >> i wonder how key some of these wage-related metrics are going to be as we continue to have this inflation debate i realize that the fed has a very narrow view of how it assesses inflation over what -- over the period of time and some of that hasshifted as well in general if you start to see wage pressures, i would think that the fed at some point is going to say, wait a second, we need to reassess things here. >> you would think and obviously it's going to feed into other measures of inflation. but what the fed really did lay
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out last year is to say we are not going to key on anything until we get to full employment by their definition, probably something below 4% and if inflation by their preferred measure fails to run above 2% for a little while. so in other words, they have really tried to create a narrow set of circumstances under which they would raise rates however, before you raise rates, you're going to taper bond purchases and maybe stop the balance sheet increases. that's what everyone is trying to figure out right now, when that clock starts. >> mike santoli, thank you. up next, columbia sportswear's ceo on whether the company will pass increases on to consumers. plus lumber is not the only commodity sending new home prices off the charts. the eye-popping cost to build a new home that is coming up jt inusa little bit on "closing bell.
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welcome back shares of columbia sportswear are up nearly 25% year to date but falling today after reporting first quarter earnings last night shares fell almost 4% today. this comes despite the outdoor company beating wall street expectations on both the top and bottom lines and raising revenue guidance above 2019 levels joining us now in an exclusive
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interview is the columbia sportswear ceo, tim boyle. thanks for being with us. >> great to be with you. >> we've seen this, this great outdoor boom that has been afoot in large part thanks to covid. we've seen it across a number of retailers, a number of stocks that's played out as well. yours is no exception. given the results you did just report, i guess how much do you expect that strength and that focus by consumers to continue to do things like go outside and do things outside? do you expect that to continue this year? >> yeah, we absolutely do. we think this is a very long-lived trend nobody is anxious, presenting company excluded, to wear a necktie and a coat to work. >> i'm with you, tim i'm with you. >> i knew you would be. >> it's mandated. >> i knew you would be but people who have been at home and been outside, able to go outside and feel healthy and enjoy themselves with their
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families, they're not going to go back to a formal way of life, in my opinion. there will be much more activity outside and we think we're positioned perfectly for that with all the brands that we have but specifically with the columbia brand, which is really very democratic and has really benefitted from these new entrants into the outdoors >> in terms of what you are seeing with consumer behaviors right now, do you feel like stimulus checks have helped boost some of the buying power by your consumers? is it something else >> well, we did definitely see a bump in business around the stimulus checks, but this has really been a long-term movement in the business upward we would expect that to continue again, people are enjoying themselves outside it's a great place, a very safe place to take your family. i think people are recognizing that and there's going to be a lot more of it to come. >> what percentage of your sales do you expect and hope to be
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e-commerce sales in five years time, tim? clearly strong growth there in the last 12 months. >> well, that will be interesting because, frankly, even though we had 20% or so of our revenues in the quarter with our own web business, e-commerce business, we have a quite broad business globally with retailers who have a significant component, some exclusively digital. so i would think that the amount of merchandise that's sold on the web by not only ourselves but our customers who have web businesses is going to be very significant. now that's not to say that we're going to never see another store anywhere in the world. china, that business is quite strong but i think the web is here to stay and people feel very comfortable conducting business on the web. >> we've been very focused on the supply chain disruptions we've been seeing, things like port congestion on the west coast which i know has affected a lot of folks importing goods many of them going ultimately
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towards consumers as well. how has that affected your company? how are you navigating it? how long would you expect it to last, if it is >> well, it's hard to predict how long it will last and it really is a west coast of the u.s. phenomenon. we bring some merchandise into the united states through the east coast, through savannah and other ports. but frankly, it's hard to know how long it will last. there's the whole issue with the disruption on where the containers are located we haven't seen the kind of disruption in our european business that we've seen on the west coast business here, so it's hard to know if it's going to be long lasting we've built our models and really talked to our investors yesterday during our call to expect some disruption throughout the year 2021 but we would expect that over time it's going to dissipate. >> what do you put down as the main reason for the share price decline then today, tim? some of the analysts' questions seemed to suggest elevated sgma
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costs going forward. what's driving it, do you think? >> well, we guide it to almost the historic high if you take act the early days of our public company history, and then 2019 we've actually guided in a very healthy manner it's very hard to run the business on a day-to-day share price view i mean we've got a long view here we have almost a billion dollars in cash. we're a very strong financial company. we have a good, clear sense of where we're going in a market that's growing rapidly you know, i don't know what computer got turned on where or whatever, i really can't get focused on that. all i can focus on is making the business better and bigger and the share price will come along as it should. >> i wonder how you see amazon, friend or foe, given the fact there is a marketplace for columbia on that platform? >> well, it's interesting. we for years considered it to be
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almost a distraction but we've really talked about how we harness the power of amazon o obviously it's a platform that people feel comfortable buying, they feel very comfortable interacting with that from a search perspective and it's an area where we think globally there's probably appropriate business to be conducted there for us we have to always be cautious. we don't want to have a huge customer someplace that drives what we do outside of our normal strategies but consumers want to visit amazon, wantin to search there, want to buy there and we want to be there when they're active. >> tim, much appreciate it thanks for joining us. >> thank you enjoy talking to you. still ahead, uber and lyft to report earnings next week coming up an analyst discusses the economic reopening and talking about gig workers. plus why increasing immigration
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on all the food that makes you boogie. (upbeat music) get the food you love with perks from- - [crowd] grubhub. see yourself. welcome back to the mirror. and know you're not alone. because this is not just a mirror. it's an unstoppable community. come on, jesse! one more! it's every workout. come on, you two! let's go! for everyone. so join in now. and see your best self. in the mirror. of. welcome back time for a cnbc update. >> the biden administration is extending face mask requirements
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on air travel until september 13th it covers all workers and passengers on buses, trains and commercial aircraft. nuchal ciew calculations frm reuters show russia has more deaths from last april through march. some say this is the best measure to view the true toll from covid-19. russia says it should be closer to 250,000 johns hopkins reports only 108,000 confirmed covid deaths in russia. and in connecticut, some pretty smart bears are expanding their search for food by breaking into cars surveillance video got three bears casually opening the front passenger and driver's doors and climbing in. they did only minor damage to the seat but apparently the paint wasn't even scratched. it's like they knew what was doing. >> my mom has bears and they
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always get into her beehives and they don't look that neat. she has bees. >> just, you know, in the vicinity. >> rahel solomon, thank you. have a great weekend. >> you too. earnings season will show no signs of slowing down next week. coming up we will look at all of the big names set to report, plus an analyst who previews what investors need to watch when uber and lyft release their results. don't miss the cnbc small business playbook on may 4th the most trusted voices in business provide critical advice and vital resources to help owners overcome extraordinary on stacks go to cnbc.com/events playbook
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it has been a jam-packed week of earnings and more coming up next week lyft is set to report on tuesday and uber is on deck for wednesday. this renewed focus on those
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names after the u.s. labor secretary this week discussed reclassifying gig workers as employees. let's get a preview of what's to come tom white joins us now and has a buy rating on both stocks. tom, buy rating on both stocks i guess there's a difference here as to the level to which they are both geared to reopening. does that alter your preference between those two despite buys on both? >> yeah, look, i think in the near term lyft is probably our preferred name here over, say, the next couple of quarters. we struggle to find a stock in our universe of u.s. internet names that is so explicitly levered to an economic reopening and specifically one in the u.s. we think the u.s. is going to be the market that sees vaccinations at kind of the highest clip and, therefore, reopening at the highest clip. this business is exclusively u.s., it's exclusively tied to ride sharing which is tied to things like people going out to restaurants and seeing friends and going back to work in some
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capacity so near term lyft is one that we think has a lot of gas behind it longer term, we think uber is building a great business, a great large platform i think the near term is a little bit -- a little bit maybe nuanced and potentially complicated for uber. >> do you think the comps are going to be very hard for the food delivery business throughout the rest of the year? >> so the first quarter numbers for delivery we think are going to be great. we expect that the comps will come back down to earth a little bit starting in the second quarter. we still think you're going to see growth in delivery part of that is going to be organic. they required postmates at the end of last year they acquired grizzly. so you're going to see a little normalization there. we are urging investors not to get too focused on the near term comps for delivery we think that the pandemic was just a spectacular opportunity for uber eats to acquire new
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customers super, super efficiently. we think that's a base of new customer acquisition that's going to really benefit them in the years to come, even if over the next couple of quarters or the next few quarters you're going to have different comps. >> tom, meantime, these names plus doordash took a real drubbing after you had a report out of reuters that the u.s. labor secretary said gig workers should be classified as employees. he said, quote, these companies are making profits andrevenue and i'm not going to begrudge anyone for that because that's what we're about in america but we want to make sure success trickles down to the worker. here's the kicker, they're not actually profitable companies, so what happens if this proceeds. >> regulatory risk, increased regulation is by far and away investment risk number one for both uber, lyft and doordash this week labor classification is kind of the hot topic that's been an important topic, you know, over the last several
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years really we think online food delivery could be kind of a target of regulators also going forward. you've got a lot of cities that instituted commission caps there's some question about whether some of those commission caps could prove permanent for example, here in new york city where i live close by to, the mayoral candidate front-runner andrew yang is calling for making the commission caps instituted in new york during the pandemic permanent. he's also calling for the food delivery platforms to try to have to share data on customers with partner restaurants, which could potentially cause some of the restaurants to maybe take that data and churn off. so labor classification is an issue. i don't exactly know what the labor secretary can unilaterally do to force reclassification of drivers as employees but certainly, you know, if he's really focused on this, it could spur a series of probes and
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investigations which is just going to i think shed more light and more focus on this issue and could result in more lawsuits against these companies. >> tom, lyft deciding to sell its autonomous unit or uber buying grizzly which is the better deal for you? >> i think it probably depends on your time horizon i think, you know, near term the decision for lyft to sell to that unit of toyota is going to have near term benefits and long-term benefits near term is increases lyft's flexibility and gives them extra dry powder, if you will. they're going to save a hundred million dollars in annual operating expenses as a result of offloading that unit. that's money they can reinvest in the recovery. make sure that they try to win the recovery is really what both of these companies are doing
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so there will be a near term benefit to the p & l longer term there's a question as to whether or not it would be better for a ride-sharing platform to have its own proprietary autonomous driving technology or if a more partnership-driven approach is the best way by contrast, the grizzly deal was a great deal too more of a long-term benefit to uber, but uber is really just trying to build the equivalent of a super app here in the u.s we don't have those the way they do in asia, but uber is trying to tack on adjacent offerings like alcohol, like grocery, like pharmacy and i think drizzly is an interesting step in that evolution. >> tom, thanks for joining us. good to see you. >> thank you. up next, new census data shedding light on startling population statistics. we'll break down how current immigration laws could be
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impacting the u.s. economy ahead. later, etsy gearing up to report results next week but can it hold on to its gains as we start reopening? that story is coming up on "closing bell. i'm only 21 but i've never been afraid of hard work. i waited tables to help my family make ends meet. i dreamed of going to college and the kpmg future leaders program helped me get there. with a scholarship, mentorship and support, i graduated with degrees in biology and philosophy. now i'm on my way to become a doctor
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. lumber prices have skyrocketed over the last year but that is not the only factor that's sending new home prices to new heights up next, we'll break down the big drivers and tell you how much more a new house could cost you. "closing bell" will be right
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welcome back census data released earlier this week shows that over the past decade the u.s. population grew at its lowest level since the 1930s because of a falling
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birth rate and significant decrease in legal immigration. if the current trend continues, it could have a serious impact on the economy joining us now to take a closer look at this is msnbc anchor ali velshi, host of "velshi" which airs saturday and sunday mornings ali, great to see you. >> show airing sunday and does mornings good to see you. >> great to be with you, nobody gets it better than you do and cnbc does. we've taken a wrong approach to immigration in the country like every other modern country has declining birth rates, more people working, no one needed to tend the farm, we have a lower birth rate with fewer people being born to replace workers retiring or passing on the problem here is that we are getting back to our pre-pandemic employment levels will take two years to get there the congressional budget office said by 2024 we should reach 3.5% roughly where we were last february before the pandemic hit
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that's better than full employment,s a good place to be, a place to cause wages to go up a little bit but is manageable what we don't have is enough immigrants to replace that there are things under way and the biden administration is taking a different approach than has been done by the trump administration to both increase le legal immigration and look at asylum seekers that's going to have to be met because once we're back to full employment by the beginning of 2024 we'll have a bit of a labor shortage. >> so what is the position at the moment that the government will need to alter, as it were, to make that happen? >> well, they got to do a few things they're proposing is as part of the citizen act 2021, one is make visa wait times equal r8 regardless where you come from be more encouraging to have people apply for legal immigration to the united states second thing, really important, locality, states and locality is
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a way to have federal government and immigration policy effect them right now we have no way to adjust for immigration that locality is required, parts of the country with shortage in particular workers, in some parts of the country it's agriculture and in other parts of the country it's high-tech and engineers. the third thing, h 1 bv a lot of people are on don't allow for someone's family so they will adjust so spouse of someone with h1b visa will have ability to legally work in america. not sure how fast it will get done but it does have more bipartisan support than a lot of other immigration endeavors. >> as for equalizing the wait time for visas i don't know whether the uk is in the list of wait times but you don't think it can be much worse than is already. it varies from person to person, country to country, but it's definitely not quick
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going to your area of expertise, done a perfect job already, what's the political push back or embrace of these sorts of policies >> well, it's the one you and i both know as immigrants to this country that there's a sense in this country that i am graduation is bad. - this country that i am gradam this country that immigration is bad, most with a farm will tell you there's a shortage of immigrants it's worth noting people planning to migrate in the next three years united states is far and away the single most popular destination but falling to people wanting to go to germany are canada, who are more welcoming of immigrants. it's a double edged sword to fix for economic reasons and got to rebrand immigration so people don't see it as a bad thing. it's a heavy lift because rank
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and file voters in parts of the country feel immigration dilutes the culture, takes away jobs and creates crime, when in fact, it boosts gdp and productivity it will be a bit of a marketing job as well as legislative job. >> heavy lift is a good catalogization of that thank you. >> tune in to velsh ii at 8:00 a.m. sunday he will interview white house economic advisor for the latest on economic news. ccoung next, red hot hsi hiccup, reason a new bill could end up costing you more than you bargained for. ahead.
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you deserve to work with a team as invested in your future as you are. learn more at massmutual.com if you're looking for a newly built home, let's explain what's going on prices just keep going up. >> they do for material and land cost for home builders are off the charts adding to your cost for newly built home starting with lumber setting records daily up 70% in two months up 340% from a year ago lumber doesn't just go into framing the added costs hit
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cabinets, doors, and flooring. gypsum up 7% from a year ago steel up 18% from march, bean, sheet metal, and wiring. copper also at a new record 450i what do you put this on, land, the price per single lot up 11% compared to a year ago that's because demand is so high and supply is low. new supply down 20% according to zanda. the inventery tight in san diego, nashville baltimore seeing drops 90% of drops considered significantly under supplied that is why a new home costs so very much. back to you. >> gosh almighty it's a laundry list i would add labor to that pile too based on the conversations i had with home builders
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diana, thank you for breaking it down for us looking ahead, we got another jam packed week of earnings on deck tuesday we hear from pfizer and act vision blizzard and t-mobile and gm on wednesday. and thursday we get numbers from beyond meat. drop box shake shack and square and a did east and draftkings will results on friday as you might call it add did as. >> not quite but almost -- also as ceo might. >> wow zinger. >> that one comes up often as you know whether fill in anchor or permanent. >> no wonder your visa takes so long, you don't know how to say the word. >> i know, that's probably why i have to wait, hopefully not turned down.
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very strong month. flat week. disappointing friday session. >> yeah and job week coming up, next friday expecting 1 million new jobs in april, second straight million, that would be great news, see if the market shrugs. >> morgan thank you for dropping by >> thanks for having me. >> have a good weekend everybody "fast money" starts now. >> i'm melissa lee this is "fast money" tonight's trader lineup tim seymour, steve grasso, james mcdonald and nadine microsoft falling one trader says double down on this name, how they're playing this pull back it's a small world but big reopening, disneyland opening the gates for the first time in a year we break it down for the trade. later, we are upping the stakes why tomorrow's kentucky derby could be a big win with the betting sports stocks. starting with s&p 50

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