Skip to main content

tv   Squawk on the Street  CNBC  October 14, 2021 9:00am-11:00am EDT

9:00 am
good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber we're set to go positive here, banks come in with pretty good results. core ppi runs a bit cool we finally have jobless claims below 300k our first interview is with james gorman, topping q3 expectations plus the president announcing a multiindustry 90-day sprint hoping to alleviate the ongoing supply chain pain ahead of the holiday shopping season. who is mad amodio?
9:01 am
he will joan us after his 38-game winning streak came to an end, the second longest in the game's history we'll talk to him about what he'll do with the over million and a half buck. >> is he going to drop that real estate rap >> no, we want some real advice. b of a, citi, wells and morgan stanley we've got to play with today ms with voest banking will make it the best of the bunch. >> i know we're speaking to james, and i think it was a fantastic quarter, but to me it was bank of america. they finally got the leverage i've been looking for, and very flush consumer numb ers>> talkin about the average american with five times more net worth than
9:02 am
before 5x network. >> before what >> before the pandemic 5x, and the people between 5,000 and 10,000, they're you have dramatically, too. i'm looking at a picture of america they're not a pitiful helpless giant i i think if i were jamey dimon, his bank is looking like the anemic bank, what is the anemic bank. >> jpmorgan? i answered correctly. >> you did you did. or i gave the correct response. >> i should have reversed it, but i would say jpmorgan should be up more, but citi looks great. wells is a conference call you never know what charlie sharp will say, but he did buy
9:03 am
back more stock. maybe it --. capital markets was very strong for morgan stanley as wilf reported earlier they had a very strong quarter there. we will speak to james gorman about that, but it's not as if they didn't benefit enormous will you with the activity that's goen on way longer than many people anticipated. spacs are incredible, but then they're not, and something replaces that. we still see so many ipos. jim, it has been a very good period. >> yes but i'm saying it's absurd that morgan stanley has a 12 multiple they're not a bank they are a wealth adviser that has to have a lot of other good stuff, m and a
9:04 am
i'm standing by this, david. >> i hear you. now it -- >> obviously it's a great time, as it turned out, and advancing an important deal for them. >> procter & gamble, they're challenged every singed, whether it's supply chain, raw costs, distribution, supermarkets, they have a 24 multiple mo morgan stanley comes along with a consistent -- i think it shows you that we're paying too much for the classic growth stocks, and raw costs being down and distribution being down, and we're not paying enough for the companies that have consistently shot the lights out. >> as for the other banks, you mentioned credit card.
9:05 am
>> i think amex, steve query is -- now, that stock is an 18 multiple, but he et cetera done a remarkable job >> 'em begging people to be less cynical for a few minutes. steve has made it an absolutely small business component that has done well, and younger people want to have a card. >> do younger people want to have a card? >> it's just a regular star, now jeopardy-style it's the buy now/pay later, the affirms of the world, the afterpay is that -- it's growing enormously is there a threat to credit cards charging you 18%
9:06 am
>> that's what max lefkin wants, if it's transparency, do i want to own capital one as much what i would say is while buy now/pay later is exciting to some of the youthful managers, then you graduate to your own credit card? >> it's beneficial to the merc merchants. >> people are willing to pay anything for affirm, nothing for jpmorgan do you think that's right? >> no, but to the extend these businesses are incredibly profitable, you wonder as it grows enormously, particularly of its appeal, whether it's not a threat to their businesses. >> a lot of people have been selling down mastercard, and
9:07 am
they have different models they're a middle man that takes a nice vig there's a lot of misinterpretation about buy now/pay later. >> we're in an environment where the household balance sheet is better than generation. >> is that a threat to america, when you have the amount of money that individuals have in this country and the freedom that it's giving them? >> to quit their job >> or to move to texas if they work and live in california? i'm a traditionalist, i think you could you should work six days a week and sleep in your suit. >> i think you're a little out of step. >> we'll ask that question of
9:08 am
gorman. >> i think to some degree people have reassessed their lives. half the people -- the 20 million people on long covid, trying to reevaluate -- i hate toe ethereal and cosmic. >> you can be. occasional ear known for deep thought, not often introspecs, that occasionally happens to you. >> maybe there's a pause in america where people are thinking about their lives as eposed to say, listen, you'll do whatever i've been doing for a long time. the more i talk to ceos who are hard-nosed, they'll say, jim, you are out of step. you have to understand that a lot of people died, almost died, and they've decided to reassess their lives. and i'm, like, rye 'says what? i was once in a plane that drab
9:09 am
landed everyone was praying, and i was typing away. >> tweet one last time >> someone said, do you understand this is a life or death situation? look, if we live, my stuff will be late. if we die, i don't care what does that have to do with the ppi in china? >> people in america of flush, giving them the opportunities to do things, so they're not showing up at their federal express job where they do this 4 million times. that's done. why can't you get existential for me for one second? >> it's too early. >> did you ever read saart >> i only read it in the original french. >> well, that balance sheet been having implications --
9:10 am
>> people are thinking about their lives differently. >> we'll talk to james gorman about those issues and more. there's a ton of calls on at&t, on bed bath, tesla, u.m.s., with futures looking pretty good here, "squawk on the street" is back here in a moment.
9:11 am
9:12 am
9:13 am
today we have good news, but now we need the rest of the private sector chain to step up as well. if the private sector doesn't step up, we're going to call them out and ask them to act >> that was the president speaking yesterday we were looking for 0.5 on core as well. a lot of papers in the uk have the same headline as the rush to save christmas. >> it's a global picture, but we're in better shape than what people realize we have a failure of imagination in technology out there. i have someone who owns a private company came on my show and took pictures of the ports
9:14 am
on saturday. almost nothing moving. the idea they're not doing a six-day week or even seven, is a scandal. the fact we had this wait so long is shameful >> i think in an interview with jane wells, there's not the capacity to take the goods sap once they're unloaded. is that not true >> this is a he said/she said. union pacific will say, look, we'll take it if they give it. you know, this is like -- if i said to you, david, look, i will do something if you do something. you say, well, jim, i'll do it if you do it, and then we don't do it. you need someone to break the logjam i'm saying it could have been broken months ago. >> is it contingent on an infrastructure bill?
9:15 am
>> oh, god, i hope not it's contingent on having someone like bill mcdermott, anyone who's any -- there's no technology these guys are living in a world, i swear, where people are just writing things down they don't know. i'm not kidding. >> so it's an i.t. issue >> it is an i.t. issue. >> how about a strike at deere and kellogg -- and they see the proves, and i think they're saying, look, we want our fair share. >> we have an evercorp downgrade of deere to hold from outperform, partly because of the strike and the duration, and have a core collapse last week kraft heinz, which frankly is a crumby company --
9:16 am
there i said it. i like cheez whiz, but every sing the commodity is you have, and then corn collapses. come on, the negativity must stop right now. >> jpmorgan today, early signs that shipping costs have peaked, but disruptions may continue, in large part because companies will precautionarily keep these lynn elevated. >> plastics coming down big in price, but weren't they supposed to be part of the problem? now they're part of the solution. >> so commodity price to say come down a bit, though energy prices are number. >> they have peaked. >> you're making this call they peaked >> i don't care. >> i'm going to be right >> we'll see if you're right or not in a couple months. >> i almost have the longest streak of being right on -- as
9:17 am
matt amodio was? >> that certainly -- natural gas is a lot higher than a year ago. how about if you're five times as flush, your natural gas is -- brian moynihan, he has a lot more divisions than the natural gas companies. >> it's a lot better here than in europe. >> david, you have to get more positive, if you're going to sit in that chair? >> really? you have to read more saart. >> it rhymes with jamey taart. later on this hour, one of the most victorious champions in "jeopardy. looking forward to that. futures continue to look strong here, as they try to go for gains on the week. we're back in a moment
9:18 am
♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ you founded your kayak company because you love the ocean-
9:19 am
not spreadsheets. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit that building you're trying to sell, matc- you should ten-x it.ion. - ten-x it? ten-x is the world's largest online commercial real estate exchange. you can close with more certainty. and twice as fast. if i could, i'd ten-x everything. like a coffee run... or fedora shopping. talk to your broker. ten-x does the same thing, - but with buildings. - so no more waiting. sfx: ding! see how easy...? don't just sell it. ten-x it. - [narrator] introducing the grubhub guarantee: our promise to deliver the food you love on time, and give you the lowest price, or you'll get $5 off your next order.
9:20 am
street." >> all right it is time for cramer's mad dash of course that was johnny gilbert. >> who was a graduate in new haven. of course, he appeared -- i appeared with him during my five shows that i hosted. that's partially why we're having him on, 9 through 13. >> you were one of the best, including like people who could hire you i don't want you to leave. >> i'm not going anywhere. >> a week a monday, i'll cover for you. >> i'm not getting hired, either let's do it. pick your category, my friend.
9:21 am
>> let's do reopening for 500. >> this industrial could turn into a butterfly. >> oh, geez, that's so easy. what is caterpillar? >> yes let me tell you something. david, the biggest curse -- remember the "sports illustrated" coming up, the biggest kurt is super cycle, coal was going to be the super cycle, then fracking was in a super cycle, boom. caterpillar was out, megapsyched until way. david, initiation -- i'm not making this up, by the way this is not just an upcycle, david, it's the fourths industrial revolution by caterpillar. megacycle, they're talking maybe second best ever, you have to buy cat. literally this is the moment if you want to buy cat. i am a little more suspect
9:22 am
it's levered to the exploration of the drilling of oil we know that's not something people are doing right now china is second. i happen to believe jim is fantastic, by -- >> what's behind this when you call it a revolution something new that's happening that hasn't happened previously? or is it just an acceleration? >> i think sometimes you get -- it's one of those things where it's new and improved. i did not find anything that really made me think that there's going to be a megacycle. >> do you like the stock or not, giving this? >> i like the stock. the return of capital philosophy, and i blanch -- i blanching it notion of a megacycle for a company that's levered to markets that are not growing. they're not. if we don't get an infrastructure bill, i think it stays a caterpillar, or becomes a moth a moth
9:23 am
>> a moth. you're from philadelphia you sound like a new yorker there. >> mare of easttown. >> i have such a crush on her. we have a lot more for you, straight ahead, including that opening bell, and longtime "jeopardy" champion matt amodio, we'll get advice for him from jim about what to invest in. then we'll be joined by morgan stanley's ceo james gorman that stock looks to be up when we start trading seven minutes from now keep it here
9:24 am
jerry is here! j! mate, how are ya!? it's so good to see you. good to see all of you, yeah! why is jerry so... popular? it's been like this ever since we started using workday.
9:25 am
what do you mean? it makes it easier to develop great relationships with our suppliers. now everyone, everywhere loves jerry. they sure do. they do. they really do. mmhmm. workday. finance, hr, planning and spend management for a changing world. so, should all our it move to the cloud? the cloud would give us more flexibility, but we lose control. ♪ ♪ ♪ should i stay or should i go? ♪ and we need insights across our data silos, but how? ♪ if i go there will be trouble ♪ ♪ ♪ wait, we can stay and go. hpe greenlake is the platform that brings the cloud to us. ♪ should i stay or should i go now? ♪ ♪ ♪
9:26 am
walgreens cites -- don't miss bertha coombs' interview with roz brewer, coming up the knicks hour. they're watching the store closures on this systemic
9:27 am
shoplifting. >> i was in one where a robbery right in front of me, a guy pulled a knife, gave them the money, they arrested him, released him a catch-and-release program. i would say roz brewer was a brilliant manager at starbucks she is so impressive it was a broken management, not a broken company >> i would bet on roz brewer every day. it was a big loss at starbucks, but good for her she's turning the company around we're going to talk about domino's in a minute. >> international was up eight and change i was looking for plus one and change
9:28 am
>> let's speak to rich >> i recommended it at ten bucks when patty doyle took over ten years ago he had a taste test with the pizza or the box, and the box won. he made it better. >> have you ever seen ethan behind the grill i went to a restaurant where they caramelize the stuff, and
9:29 am
frankly it's been a bit of a dud. >> total addressable market seems to be beginning. >> impossible burger, which i happen to like that taste, that's gmo, and the younger people don't like gmo. you know what it is? >> i know what it stands for. >> it stands for evil. [ laughter ] >> in europe in particular there's a resistance. >> they buy ugly fruit in europe, we throw it away we throw away fruit that isn't perfect. we have a couple companies that are try to go change that. i don't like it. the only thing i liked less than that was at&t, but i'm upgrading. we'll talk about that after the bell. >> yeah, at&t gets an upgrade
9:30 am
out keybank. first, though, the opening bell, at the big boardit's ims towers, a telecom cower, and at nasdaq it's gitlab, also celebrating an ipo. >> that's going to be a great interview i've had -- without our san francisco office without really being engaged. >> maybe one day you'll go you know, i will go. see, i have seven vaccinations [ laughter ] there's a two-day meeting today on the j&j and moderna boosters they have some israel data that does show a booster on the pfizer vaccine can have impact on severe illness for people as
9:31 am
young as how and above >> i'm moderna, just because of the luck of the draw i'm not saying there's false information everywhere, but the dr. toppols of the world seem unchanged. there's so many athletes in the nfl, almost every single one of them is double investigation nated. these are not people who didn't get vaccinated it's chilling that there were that many. >> how about one of the white house advisers today tweeted that the nhl, there are four players who are not vaxed. not 4%, four players 99.5% vaccinate rate in the nhl, which is largely canadian, where they have a different view >> they do kind of like the smallpox vaccine hey, i'd rather not have it.
9:32 am
>> i'd rather not have it. >> i don't want tb they're viewing it as, hey, i don't want measles they're not ant-vax. they're pro-health. >> to carl's point, they're not americans. >> they're canadians, not americans. >> i asked the ceo of constellation when they were putting a tax on beer, i asked, can you make modelo and corona in new mexico? >> no, you can't >> of course not. >> meanwhile, we're back at 4400 all sectors are green. what does it say that you have both the financials, energies, but also the tech names. all polls show incredible -- i
9:33 am
was going to get a cardigan sweater, or a whip inflation -- >> he used the word malaise. >> hellmann's malaise? >> may-lez, is how you say it. >> it's all french today the vast majority come on the air and say i'm down port strike i'm just feeling readily bad my furniture hasn't arrived. i feel bad there's people making more money, work for nothing for a long time. how does that happen that will hurt us? shouldn't ceos making billions isn't that going to hurt us as a country? >> the positive view is that the pendulum is swinging back to labor, and there's going to be some losers involved in that, but those who have arguably benefited for the past 40 years.
9:34 am
>> the five odd people, they may get hurt. >> i don't think they'll get hurt. >> okay. they won't feel it the whole notion that it's the workers. i would say it's america, that the vast majority of americans are doing better, and the president has not been nearly as vocal about championing it he did praise my restaurant yesterday. he said god bless longshoremen i don't feel -- there's an element of short sharift, where we keep mentioning the problems. how many people at the ports are really wrecking our country? let's bring in the 82nd and 101st. yes, they'll get it done i just say that this market is
9:35 am
more like what i expected. we're not done, because there were some earnings that aren't that good, but i listen to brian moynihan talking about how flush the consumer is. in the old days they were all levered and were fine. now we're flush and we're negative there's something wrong. i sold 14% treasuries when i got to goldman people were like, wow, i guess i have to do it, now people are saying it's the end of the world at 2%. i still -- you know, that paper is just rolling over you sell those long bonds -- >> the voelker paper >> jpmorgan shares not doing much of anything, but bank of america shares are up strong >> zelle is a hit. do you zelle >> yes, i used it this weekend
9:36 am
to pay somebody. this is one of jim's favorite subjects, about at&t, it caught an up grade i think, a market perform somewhere. >> i like the upgrade. i don't know if people have notice the declines of shares in at&t, t-mobile and verizon it's a lot of price competition. not just coming from the three of them -- >> are you going to go cable >> i'm going cable they have been very aggressive lately in terms of offering pricing, new plans for potentially luring in wireless customers. look add what's happened in the stock the last week. t-mobile is done 7.5%, at&t over 5.5%, despite the fact you've had analysts citing their over overbuild, that being a rae competitive threat
9:37 am
, but all of that has been very weak >> why are you looking at my notes? those are incredibly bad numbers. >> what are you doing? >> this is look like the glasses your dentist wears, right? >> but i feel like i need novocaine with these >> what are you doing? are you a diamond seller >> people got that last dividend now the people who left are completely brain dead, and it doesn't matter that it's been chopped in two and they're like one flew over the cuckoo's nest and some are saying there's
9:38 am
value here i'm saying, even though i die speeds them, i'm saying it's okay. >> really? you had to put in the despise there, huh >> i'm a big believer of a single source of truth. >> they'll take it they'll take it. >> all can be forgiven, but -- where is that numbers again? when we come back, the "jeopardy" champ matt amodio will join us live. a look at the ten-year yield overall with the s&p at 4400, health care definitely helping out. all averages are positive for the week that ten-year yield is back below 154.
9:39 am
(tennis grunts) pnc bank believes that if a pair of goggles can help your backhand get better yeah! then your bank should help you budget even better. virtual wallet® is so much more than a checking account. its low cash mode℠ feature gives you at least 24 hours of extra time to help you avoid an overdraft fee. you see that? virtual wallet® with low cash mode℠ from pnc bank. one way we're making a difference. ♪ earl: - hey barista: - good morning, earl! narrator: - since our beginning, barista: - there he is! narrator: - we've looked to inspire and nurture each other, by asking what's possible?
9:40 am
what's possible when we connect? office worker: - coffee's here! narrator: - what's possible when we come together. female 1: - kayla? female 2: - oh. is it ok to hug? narrator: - when we open our hearts. female 2: - this is like the best date i've ever been on. narrator: - when we grow together. narrator: - after 50 years, we've learned that possible is just the beginning.
9:41 am
the pursuit is on. the pursuit of naoutperformance at pgim.s, with deep expertise to outthink across multiple asset classes, actively managing investments in the world's public and private markets. outscale, with the resources to serve 1,500 clients in 52 countries. and outlast, with long-term conviction that looks beyond today's volatility. join the pursuit of outperformance at pgim. the investment management business of prudential.
9:42 am
welcome back, everybody. matt amodio's 38-game streak came to an inderalierthis week he came away with recognition for what is the secondest longest consecutive wins in the show's history and over about a million and a half bucks in earnings he continues to be a ph.d. student. congrats, of course. >> thank you so much my pleasure to be here >> i hate to start on a bad memory i have a lot of good ones from our week together. you went on to so many more winning days, but i wonder, were you shocked? wait a second, i have to leave now? >> yeah, a bit surprised, but not too surprised. i had anticipated this moment 38 times, and every time before that, i happy to win, but i
9:43 am
always knew it was a possibility. >> you did again, a question, you know, given that streak, what do you attribute it to? what do you attribute to the fact that you were able to pull it out time and again, oftentimes you really did not have serious competition heading into fine jeopardy >> it's a lott of rhythm once you get into a groove, you're remembering things you didn't even know you knew, your timing on the signaling device is perfect it's a great feeling it feels good. and then it can disappear. >> i did know occasionally you seemed to ring in, know you might know the answer, but it didn't seem to be there right away you gave yourself a few seconds, and then came up with it is that true were you still cogitating? >> it was a two-step process of recognition and then cognition
9:44 am
do i think i'm going to know it? if so, ring in and hopefully i will know it. >> let's get to the bigger question, the one i tweeted some time back for when you did finally end your streak, come on, what are you going to do with what is a sizable amount of money, matt? jim cramer is here as well do you have any ideas at this point? >> i have the boring answer. i'm going to do long-term investment goals i'm not there on the day-to-day trading. it's too much for me to keep track of, but index funds paired with a small amount of bonds, with yearly rebalancing. how can you go wrong, right? >> well, matt, you're an american hero. this is the first time my kids have ever loved the show they loved you so much they just admire your level of
9:45 am
play it was like watching "queen's gambit." matt, why any bonds at all you're a young guy, why not 40% in less aggressive, and you're getting the ph.d. from a town called new haven you have your whole life in front of you i don't think you should own any bonds at all >> all right interesting in a long-term dip, though, isn't it nice to buy some at a lower price? to be able to get back in? >> wow, yeah i thought you were going -- keep cash around for the dips is brilliant, as you are. i would do that. i recommend about 7% cash in my charitable trust waiting for the big dip. i think you should join our investing club, and i get a kick out of you, man. you are so much fun. i'm not kidding. we're a "jeopardy" family.
9:46 am
you're just different. fun from the day you were on, we said we've got a champ here, david, this guise was a champ. >> he was certainly during my wife >> it is high praise indeed for jim cramer to call me fun. so thank you [ laughter ] >> well, matt, one record that will never be beat is playing with six different hosts, as you did. i won't ask you your favorite, i think we all can guess, but i won't ask. i will ask, are you back to actually going after this ph.d. that we all heard about every single night and where do things stand, by the way, in your education >> absolutely. it never went away it was a bit much, juggling everything, but it is nice to be able to focus entirely on that now. i hopefully will graduate at the end of the school year, and looking for jobs, faculty
9:47 am
positions, that kind of thing. i would love to be a professor long term. hopefully the positive publicity will help me a bit. >> and being a long-term investor, as you say, could help to fortify you as you take on professorship. matt, all the best to you. congratulations on a great run. >> thank you. >> very happy to have shared that stage with you for those five games and to have on you this morning as well thank you. >> thank you for getting my kids to watch "squawk on the street." first time ever. >> my pleasure matt amodio. carl >> one more view, that's good. james gorman when we come back don't go away.
9:48 am
your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit retirement income is complicated. as your broker, i've solved it. matching your job description. that's great, carl. but we need something better. that's easily adjustable has no penalties or advisory fee. and we can monitor to see that we're on track. like schwab intelligent income. schwab! introducing schwab intelligent income. a simple, modern way to pay yourself from your portfolio. oh, that's cool... i mean, we don't have that. schwab.
9:49 am
a modern approach to wealth management. paola needs a parachute. so, salesforce customer 360 unites your marketing, sales, commerce, service, and it teams around her. so they can deliver a great experience from anywhere. ♪ (whistle) ♪
9:50 am
>> matt amodio was a great treat but we have another treat, morgan stanley's james foreman morgan stanley stocks are appropriately higher after what i regard as being a great quarter. chairman and ceo james gorman. welcome to "squawk on the street." thank you for coming to talk about how well your bank is doing.
9:51 am
>> happy to do it as long as you don't ask me to go on "jeopardy," jim. >> we're going to hold off on that that's a different subject you deserve to be on because what is the best wealth management business in the world? >> thank you. >> $300 billion in new money this year. what is happening that people can bring in $300 billion in wealth management? >> it's amazing. the team has done an unbelievable job we're managing over $4 trillion, nearly $4.5 trillion, with success comes success. we have a lot of clients who feel comfortable with the brand, the platform, the technology we've invested through e-trade it's all come together this has sort of been a dream for over a decade and we're seeing the fruits. 12 years ago, i think our assets were about $500 billion so they've gone up eight or nine times in that period and this is sticky money it's a great business. we're thrilled >> that's what i wanted to talk
9:52 am
about. there's -- at one point morgan stanley before you came in had what i regarded as episodic earnings, good and bad and then good and bad hard to give a price earnings multiple the business you're bringing in, including e-trade, is sticky and steady growth secular growth i'm wondering when you sit around in your board meetings doesn't someone say how come we're at 12 times earnings this is a secular growth story it's not cyclical. i'm trying to understand why you're not given a greater price to earnings multiple >> well, it's getting there. i mean to be fair, we were sub 10 and i thought that was nuts we're now managing wealth and asset management together, which give us a balance about $6.5 trillion on that we're generating revenues over $30 billion. that's -- and that's very sticky on the other hand the investment bank and what its done, the resurgence of fixed income after restructured dramatically in
9:53 am
2015, equity is number one, the investment bank itself and m&a is on fire, the equity underwriting, so it's balance and speed concept i've talked about. we're starting to get the multiple, the recognition. you look at some of the other pure wealth plays in the marketplace trading at, you know, 20, 30 times earnings, you know, we would love a piece of that i think our investors are starting to understand that. it's getting there >> well, i think it is if you added buy now, pay later, 30 times earnings. >> yeah. >> i've struggle about the love of robinhood and how important it is and i want to stack that up against you and i want you to include a company that you bought at the time it was called solium, you made into share works. who has a younger investment base and whose base is larger? >> first, i have a lot of respect for robinhood. what they're doing introducing young investors to the marketplaces you've said this and i believe
9:54 am
that's a good thing. as long as they prudently are investing and understand the markets go up and also go down, they've got a real winner. a lot of respect for what those guys have done we've sort of done the same thing but we've done it within the morgan stanley platform and brand. maybe it doesn't get that kind of recognition solium is a technology company, 300 programmers that gave us an opportunity to get into the workplace space between solium and e-trade and our existing business we're touching over 30 million households and they're wealthy households there's significant money. by the way, they want to borrow, and they want to park their cash there. they're taking out mortgages it's got multiple verticals. we can go after to help these people find financialstability that's what i'm really excited about. the combination of the traditional adviser model, e-trade model and the s ork lium workplace model you're getting
9:55 am
people at work, online and through an adviser that is the magic mouse trap >> james, it's david i'm looking at your stock price not doing much of anything right now, i'm wondering perhaps because people think when it comes to capital markets, this thing just can't keep going at this rate. you've pointed it out, of course, whether it's fixed income or equities, the outperformance of expectations, the percentage gains year over year from '19, i don't know if you've ever seen anything like this in your career, but can it continue at this rate? >> oh, sure it can and listen, the market, you know, i don't have a problem when i see the market if our stock is at 100. i'm looking at your camera but we're at or about that we were $50 a year ago the stock was up 34% i think in 2020 during covid. we're up 40% plus this year already. the market cap is over $180 billion, had a phenomenal run,
9:56 am
but there's a lot more to go if you take that thread jim was pulling on about the multiple expansion, and you take the fact that we built these enormous businesses that have huge scale advantages and operate on a global basis as you know, david, in m&a and capital markets cross border stuff, that's not an easy lift you don't just turn up one day and say that's a business i want to be in you have to build that over decades. i think they're resilient. the share gains that we've done through the institutional side under tense leadership have worked out great and i think it's going to keep going i'm really positive on the story. [ inaudible ] a broader market environment. >> right but we're here at the new york stock exchange and see the listings happening, chinese companies and then spacs and now straight ipos. that's one part of capital markets activity you expect you're always going to maintain these kinds of growth rates when it comes to equity under fixed income for the next year or two
9:57 am
>> you know, yeah, we're not going to compound atthis level >> no. >> you have global gdp growth in pretty much every major economy in the world is going through global gdp growth. we've got fiscal stimulus and rates. people want to transact. the move from commercial lending to capital markets across all of europe is still in the very early days you know, i'm not uncomfortable in saying we've got -- clearly we have a growth platform, whether it's at the level we see in m&a obviously not our pipeline suggests that's with us for a while to come but over the next five years we will not maintain that kind of growth the resilience of the model, the scale advantages, efficiency ratio under 70%, all these things are real and when you double the dividend you're giving investors, you know, a 2.8% yield at $100 i mean, that's not for nothing, right. you're buying back about 3% of
9:58 am
stocks investors are getting return of 7%, before we get any of that growth >> james, one of the headlines about the call about crypto, it's not a huge part of the business demand from our clients. is that because it's early days and do you expect that to change >> you know, carl, i've said this before, i think crypto, it's not a fad, not going away, and obviously the blockchain technology supporting it is a real innovation. we're not seeing among very wealthy clients, they might put -- i talk to people, 1% of their portfolio in it. nobody is putting 10% of their portfolio into it. it's an interesting thing. a lot of people want to participate. they don't know how crypto is going to pay out i see bitcoin i think trading, i don't know, 55,000, knocking on 60,000, so a lot of people made a lot of money on it, but it's not a core part of their diversification strategy it's an option that they're playing out. and with very wealthy people
9:59 am
with some of the younger folks, it's different they're using -- they have less money at risk and frankly their age and stage in life they can take more risk you're seeing more interest at that level, e-trade had much more interest than the traditional morgan stanley client base. >> that makes sense. james, you have drawn a line in the sand with people coming to work, people showing up, being able to judge someone who is a first year associate, second year, third, very traditional, and i've always felt very right, pushback people think that you're wrong people not wanting to go to morgan stanley versus other sflasz places what is the culture on this issue. >> i don't think there's been a decision i've made i haven't had pushback you don't just get good bits of being a leader, you get good and bad. people don't like it when you make decisions and that counts for everything, from what you put in programming on the show to what's going on in politics so that's okay i can deal with that and, you know, fundamentally what i said was, and, you know,
10:00 am
the quote i used which got a lot of attention, if you can go to a restaurant you can go to the office i didn't say, jim, was, and you have to be in the office five days a week forever. clearly we've moved to a flexible working environment, but we like to see people in and around their colleagues at least several days a week. that's how we do our best work that's for our best innovation happens from bringing people together and training and developing them. it's okay for me working at home i'm at the tail end of my career the kids at 25 they want to be in and around and learn from the seniors. again, we'll be flexible and we are being flexible but we still want to see you in the office some of the time, job dependent, et cetera we've had folks as you would imagine on the trading force been in five days a week from the get-go and that's what their job demanded client facing people have to do what the the clients want. we'll be flexible, but we're certainly intentional. i think it's very important to share your learning and development skills with the young kids
10:01 am
>> yeah. i think there's no doubt i sense frustration from some of your peers in terms of people not showing up on fridays, and yet knowing at this point as you say, flexibility is part of the allure for other employers, and seems to be something that you simply have to provide, regardless of whether you want to, do you agree >> i don't know. i mean, david, you know, it's interesting some of the early companies that came out and said you can absolutely do whatever you like in terms of working, they've retracted from that. i mean it's not every employee gets to choose exactly how they work in the same way they don't choose how they get paid or when they get promoted. there's going to be a balance in this you're not going to please everybody on this topic. what i've said between now and the end of the year, we're still in the category of what can we do from a health and safety. new york city, for example, we require you to be vaccinated to come into the buildings. guess what 96% of our employees are vaccinated, and they showed us their test cards other parts of the world they're
10:02 am
not even -- australia, where i grew up, they barely opened the economy up they're still in lockdown phases in different parts of the country. by 2022/2023 we'll really see what the right model is by business group and then by individual. >> the stock is down which is a rare opportunity you because this is a great opportunity. my travel trust owns it. we talk about it when it comes to the cnbc investing club i can't thank you enough for explaining why your bank is different and positive and much better than almost everybody in the industry james gorman, ceo of morgan stanley. >> the stock being down is not all bad news we are in the middle of a buyback program. that's okay. >> there you go. all right. >> meanwhile, jim, safe to say you are encouraged by the action today? >> look, i just think that we're going for a bottom
10:03 am
something else happens tomorrow that we'll hear is a hot inflation number or hear somebody else there's a tremendous supply chain problems what i'm urging people to realize we will work through it and exhibit a is apple two days ago we heard apple was in trouble and they will not make it for christmas. then think about the satisfaction level of what people get from the phone and look at what david talked about with the telcos and how they're desperate to beable to grow, the way to grow is to give them the apple phone. just because they don't make it this quarter they will make it the next quarter and the stock going up and up nicely, tells me there's some people thinking a little more than just 36 hours, the may flymarket may be ending >> want the may fly. okay >> okay. >> i want you to read "no exit tonight". >> okay. >> and we'll get a little dialog going. >> little dialog back and forth. >> yeah. >> domino's tonight. >> we're going to find out
10:04 am
what's going on there because they've been a huge winner for our viewers and i'm not giving up good luck to the eagles. i will be there. now, we have this guy ron, neal ron, he is in charge of logistics of getting truck drivers for uber he is the real deal. we're going to find out what the truck shortage is about. you're going to find out there is no shortage >> all right >> all right >> there's no zule >> only zule only zule. >> we'll see you at 6:00 on "mad money" with jim cramer good thursday morning. i'm carl quintanilla with morgan brennan and david faber at post nine we are getting a pretty nice bounce here. dow up almost 400, all sectors green, health care definitely helping out as the s&p and the nasdaq and the dow actually are all shooting for weekly gains. >> that's right. we're 30 minutes into the trading session. here are three movers we're watching we're going to start with taiwan semi, shares higher after
10:05 am
reporting a better than expected 14% jump in third quarter profit thanks to the surge in global chip demand and a shortage that pushed them higher up 1% right now. cowan initiating coverage on caterpillar with an outperform rating it sees the first mega cycle for cat in 14 years, including a $35 billion revenue opportunity from autonomy in the next decade. connected mining machines, you can see those shares up 2.5% dow component walgreens finally topping earnings expectations, revenue also beating consensus with results boosted by more covid vaccinations and growth and sales of at home covid tests. you can see those shares are down 3.5%. we're going to hear from ceo roz brewer this hour don't want to miss that. >> in the meantime the markets, rallying up 400, major averages for the week joining us goldman sachs equity strategist david kostin.
10:06 am
good morning >> good morning, carl. at some point i'm coming on set. >> you keep saying that. we're going to make it happen. it's getting easier all the time we think i do want to ask you about, you know, sort of the angst we've been wrestling with the past few weeks. jim's point a moment ago was that we're looking for ways to get through these hand wringing episodes about inflation and supply chain and debt limit. you think we're making progress? >> carl, in my view, the equity market has been pricing this in for several months now the reason i have that view is when we look at the results for the companies in the market in the second quarter, they beat expectations by 17%. that was a trend you saw, in fact, in the first and second quarter. but the analysts and ourselves, the strategists' expectations really didn't increase in terms of the forecast for the third quarter and fourth quarter and into next year all of that momentum people had
10:07 am
already most investors with whom i'm speaking, had anticipated that there would be some margin pressures and the expectations are that margins will be lower this quarter than last quarter that's already sort of expected and most of the conversations now are looking into next year about tax reform and some other issues that are fundamental than well -- fundamentals obviously a lot in the supply chain disruption but the expectation is that will recede at some point in the early part of next year the expectation we have right now. >> i know tax and policy risk have been a talker for you earlier in the q3. has it been displaced by supply chain and inflation? >> well, there's a couple ways to think about the supply chain disruption re use that terminology. the real economy and there's been problems and i had conversation cans with cfos and ceos in the spring already raising this issue about backlog in the port of los angeles and long beach and the trains and
10:08 am
the trucking distribution, so that has been well understood in the market and how far into the future this was going to be discounted back, it is certainly a concern that we have on the fundamental side, but the results coming in so far on the consumer confidence and the idea of balance sheets, you heard from the banks this week, it's optimistic in terms of the business activity. lack of supply and some of the other issues are certainly there. when you think of another way of supply chain disruption, think about it in the financial markets. $240 billion of capital that's been issued this year, both ipos and follow-on equity offerings and roughly similar amount of inflow into the market, so i would argue in the financial markets, in equities, that's been matched off pretty reasonably supply and demand. then there's this huge amount $900 billion of authorizations and executions on share
10:09 am
repurchases. we think about the supply/demand in the financial markets, that's an aspect that you need to keep in mind as well. >> david, you know, you mentioned tax reform, and i'm curious, have you begun to try to model what earnings will look like next year perhaps if we do get, for example, and we don't know, i know that, but a rise in the corporate rate here in the states and as importantly, perhaps, that global minimum tax of 15% that may also take effect in some fashion. certainly what hit some of these big growth companies that pay little in places like ireland. >> david it's an excellent question yes, with my colleague ben snider we've done lots of work modelling and thinking about the tax implications around the variety of proposals and the assumption that they are making in our forecast is that you'll have around 25% sort of federal statutory rate on the corporate
10:10 am
income tax rate. we do have an assumption on the international tax rate as well and the bottom line, david, we are assuming only 2%, 2% earnings growth next year. that is a pretty modest, pretty muted level of earnings growth and a lot of that is a function or the fact that it's quite low is a function of tax reform. if you didn't have tax reform in a positive scenario, you had the static tax law today and sort of persistent the next year, we would have earnings growth on the order of around 7% it's about 5 percentage points headwinds in terms of earnings growth again, that's something that will affect different companies in different ways, but we are assuming that. that's part of our model and thinking about what's the market today, trades around 20 to 21 times forward multiple, bond yields are at 1.5% we're assuming that they climb a
10:11 am
little bit higher to around 1.6% at the end of this year and that would be supportive in our view of around 4,700 for the s&p 500 this year and that would be another 6% or so upside from the current level and then next year however a relatively more modest upside and that's 4,900 at the end of 2022. if you want to think about that, david, it's like 10% return over the next 15 months it's kind of generally in line with where earnings are going. it will be shallower next year because of the tax headwind. >> okay. so potential 10% return for the s&p more broadly, but when you dig down into sectors and industries, what do you like right now? where is the biggest bang for your buck given all the uncertainties we're talking about. >> morgan, the way i think about this is the companies with high and stable growth margins because as carl has indicated in his question, the big focus is
10:12 am
understanding who is more or less exposed on the supply is chain disruption and whose margins are more at risk one way to attack that problem is to say well, which companies have been delivering stable relatively low amplitude in terms of the margins, very stable margins and so we look at a number of software companies, you can think about oracle, think about synopsis, think about companies in that vicinity, my colleague, our analyst, looking at 15 to 30% upside from some of these companies on the back of the fact that you don't have the supply chain issues that affect many of the software companies that's sort of one approach. you can look at some of the industrial companies where they are likely to benefit from the pricing power and push that through. there's some areas where i think there's margin resilience and that would be an area to focus on for us as a strategist and dealing with portfolio managers. >> that's a good lay of the land
10:13 am
right now, david, as we see so much push and pull the last few weeks. good to see you again. thanks >> thanks, carl. >> david kostin. as we take a breaks the road map including shares of industrial giant deere under pressure 10,000 employees going on strike over wage disputes >> we'll have an exclusive with walgreens boots ceo roster brewer >> and we'll hear from the two paying passengers aboard yesterday's blue origin space flight, working with jeff bezos, transcript to space and more a big show ahead don't go anywhere.
10:14 am
need to get your prescriptions refilled? capsule pharmacy can hand deliver your medications - today - for free. go to we handle your insurance. all you have to do is schedule delivery. go to to get started in 15 seconds today.
10:15 am
10:16 am
breaking news on microsoft this morning the company announcing they will shut down the local version of linkedin in china. linkedin was the last major operated social media in that company. citing a significantly more challenging operating environment and greater compliance requirements in china. instead microsoft is going to launch a job search sitein tha country that doesn't have some of the social features that linkedin has we're going to watch that. stock up almost 1.5%. >> it comes amid other headlines from microsoft this week coming out of the big army conference in d.c. that big multibillion dollar hallow lens contract with the u.s. army is halted to walgreens topping earnings estimates boosted by higher than
10:17 am
expected covid vaccinations, six months on the job roz brewer is laying out her vision for the company and bertha coombs joining us with an interview with brewer. bertha >> thanks, morgan. walgreens is doubling down on combing pharmacy and primary care services in store announcing a $5.2 billion deal in primary care provider village md, that doubles its stake to more than 60%. plans to roll out 600 clinics by 2025 in under served and urban and rural areas, part of the company's launch of integrated services under walgreens health. >> when you think about health care it has to be local. it must be local we can move in local communities to have a physician connected to our walgreens store and it creates a wonderful relationship between that pharmacist and physician and then when you think about putting in the background of that a
10:18 am
tech-enabled platform so that all of your medical records are pulled together and the conversations are uniform, and youring if recommendations are being shared directly with the pharmacist, i think that's a game changer >> also looking at shifting offerings in the front of the store. >> we're actually looking at that now and making some deliberate decisions about what should the front of the store represent and what it should look like in a more healthy for you profile. >> where does tobacco sales, where does that fall in if you are going to be taking a more healthy approach certainly there have been investors that have asked the company to stop selling tobacco products and yet the company has said it's going to evaluate it, but we haven't heard more about that >> that is part of our process we are thinking about what's next in our stores and how do we really project a healthy for you profile when you enter into our
10:19 am
stores tobacco is one of those areas under scrutiny right now and you will see more to come in that area. >> shareholders have been pushing for that since c vs dropped its tobacco sales in 2014 meantime brewer wants investors to know that she's going to be disciplined in what the company does and what they don't >> very intentional, very deliberate, we're going to be very cost conscious as you've seen in our cost transformation work, but also we're going to be transparent and very open to how we're going to manage ourselves going forward. many times when we've had these discussions we would talk about foot traffic in our stores, we would talk about categories that are working. you'll hear us talk more now about how many lives are we managing, right. we will talk about our relationships with our peers we will talk about relationships with our pharmacists and ouring ifs. >> if i'm an investor, i
10:20 am
shouldn't really thing about you so much as a retailer anymore? >> i think you will hear us talk some about retail, but what we really want to have impact is in the health care ecosystem and this new walgreens health will make a difference and will begin to transform us away from retail and just dispensing pharmaceuticals. it will be about the lives that we manage and the lives that we touch and the lives that we can wrap physicians and clinicians around in our buildings. both physically and digitally. >> that's a big shift. you can see investors not quite buying it at this point. the company, though, also boosting its guidance when it comes to cost cutting. they've done $2 billion a year, now boosting that by 50% back to you. >> yeah. bertha, you know, it's interesting to hear those comments from brewer given the headline on our website right now that walgreens is boosting its stake in primary care
10:21 am
company village md more than $5 billion. she's six months in. i guess just in terms of that transition into walgreens and away from starbucks and starting to make some of these big moves like this, how does it speak to i guess longer term the strategy she's implementing >> you know, it's more or less a strategy that has been there she's trying to give it more focus and say that they're going to be more intentional walgreens has tried a lot of things in their stores they've brought in optometrists and a lot of different health care things. she wants to focus it on really being a destination and really carrying on the fact that people are coming into their stores to get those vaccines, keep them coming in to get their other health care. that's what everyone is trying to do now. cvs, walmart, all of these retailers. >> bertha, great stuff with brewer bertha comes, thanks. as we go to break, watch shares of beyond meat moving higher as mcdonald's plans to
10:22 am
test its mcplant burger in eight restaurants in the u.s. next month, bringing the plant-based patty to u.s. shores after an international rollout in international markets. we're back to 4420 on the s&p. best gain in about three months. ♪ feel stuck and need a loan? move to sofi and feel what it's like to get your money right. ♪ ♪ ♪ ♪ move to a sofi personal loan. earn $10 just for viewing your rate — and get your money right. ♪ america! after the past year-ish, and get your money right. everyone deserves something new! so at&t is giving everyone our best deals on every iphone including the iphone 13 pro with its amazing camera. like everyone that worked from home. learned a new hobby...
10:23 am
or welcomed a new family member. they were all out of dogs. so... our deals are for everyone! it's not complicated. at&t is giving new and existing customers our best deals on every iphone, including the epic iphone 13 pro on us. ♪ earl: - hey barista: - good morning, earl! narrator: - since our beginning, barista: - there he is! narrator: - we've looked to inspire and nurture each other, by asking what's possible? what's possible when we connect? office worker: - coffee's here! narrator: - what's possible when we come together. female 1: - kayla? female 2: - oh. is it ok to hug? narrator: - when we open our hearts. female 2: - this is like the best date i've ever been on. narrator: - when we grow together. narrator: - after 50 years, we've learned that possible is just the beginning. so, should all our it move to the cloud? the cloud would give us more flexibility, but we lose control. ♪ ♪ ♪ should i stay or should i go? ♪ and we need insights across our data silos, but how?
10:24 am
♪ if i go there will be trouble ♪ ♪ ♪ wait, we can stay and go. hpe greenlake is the platform that brings the cloud to us. ♪ should i stay or should i go now? ♪ ♪ ♪
10:25 am
welcome back to "squawk on the street." it is time for our etf spotlight. we're taking a look at the industrials. ticker xli up double digits for the year boosted by honeywell, union pacific and raytheon up almost 1.5% today. today in particular watch shares of deere with 10,000 workers going on strike over their contract and meantime the stock be getting a downgrade from hold to outperform at evercorps, which cites uncertainty around the duration of the strike the shares are fractionally higher we'll be right bk. ayitusac ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina?
10:26 am
hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq at vanguard, you're more than just an investor, you're an owner with access to financial advice, tools and a personalized plan that helps you build a future for those you love. vanguard. become an owner. new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit and get started today.
10:27 am
. you can see some of the buying going on today. dow up more than 400 points.
10:28 am
best day tfor the s&p since july vix below 18 10-year yield below 1.53 news update with rahel solomon >> hi, carl, good morning. here's what's happening this morning. the bow and arrow attack that killed five people in a small norwegian town appears to have been an act of terrorism, what the national security agency is saying it says that suspect, a 37-year-old danish man, is a mu him convert who had been identified as having been radicalized. in beirut, five dead, 16 injured in fighting between christians and shiite muslim, it started against a judge who is investigating the port explosion. snipers, pistols and rocket-propelled grenades were used in the sectarian clashes. an fda advisory panel meeting right now on whether to back a third shot of the moderna covid vaccine with a vote expected later today tomorrow the group will consider whether to recommend a second
10:29 am
johnson & johnson dose. and more than 10,000 john deere workers are on strike this morning after rejecting a six-year contract agreement between their union and at company. they say that raises of 5 and 6% are not enough you're up to date. back to you. >> really, thank you by the way, i mean, love the look today with the pink >> likewise. great minds, morgan. >> xap. let's turn back to bank earnings with bank of america, wells fargo, and morgan stanley all beating. will fred frost has the highlights. >> five have reported so far and two clear winners, which the year over year revenue growth numbers captures somewhat crudely. morgan stanley and bank of america, the clear ones with the biggest year over year gains in revenue. morgan stanley's security business smashed it and like everyone, they had a beat the advisory that drove a banking beat, $2.8 billion compared to a forecast of $2.2 billion, while
10:30 am
that tilted in trading towards equities helped $2.8 billion there, up 24% year over year, offset a decline in fixed income trading. that was still not bad at $1.6 billion. their wealth and investment management numbers slightly missed expectations. they were still strong, but they did slightly miss. their firm-wide year to date revenue is 10% higher than their full year 2019 revenue was with one quarter to go which captures the growth they've had bank of america had strong capital markets as well puts the standout was their net interest income starting to perform already this past quarter rather than guiding to that starting to happen moving forward. loan growth e-ppp was plus 2.3% quarter over quarter and held expenses flat and that anticipated the type of operating leverage that all banks will hope to show if rates rise next year citigroup did see expenses rise 5% year over year but they
10:31 am
guided to that and the capital markets division delivered likes the others did a solid quarter while going through their strategy shift wells fargo comes down to the call which hasn't begun and getting a hold on whether their regulatory restrictions are going to be lifted soon as was hoped a few quarters ago or the opposite, whether there are more coming as some have started to fear in the last few months. stocks have turned lower across the board pretty much. bank of america still higher but off its highs. guys >> yeah. wilf, a mixed picture in terms of the reaction. jpmorgan shares are up a bit any look back on that quarter from your perspective in terms of the market reaction and how it stacks up against many of these others >> yeah. i mean clearly revenue growth year over year is standout for morgan stanley first and bank of america second and jpmorgan didn't really have that. they were up 2% year over year so they're not the best performer this quarter interestingly in terms of the share price performance today,
10:32 am
morgan stanley as you guys were discussing with james gorman turned south, not anything specific, after the earnings call had finished. it feels more i've been texting analysts like sort of a macro concern within the group yields did move lower as well. wells fargo sold off on that moment which feels a bit odd given we had the numbers there. jpmorgan held better almost as if it's the safest of the group and that might be a factor at play if you're looking at the numbers bank of america and morgan stanleys the best so far >> okay. we're going to stay on this topic. thank you. in fact, we did speak earlier today with morgan stanley ceo james gorman saying the bank is seeings the fruits of its long-term strategy paying off. >> the team has done an unbelievable job the reality is we're managing over $4 trillion, nearly $4.5 trillion with success comes success. we have a lot of clients who feel very comfortable with the brand, the platform, the technology we've invested
10:33 am
through e-trade. it's all come together this is sort of been a dream for over a decade and we're seeing the fruits of it >> joining us is rbc capital markets gerard cassidy we heard from five of the six, haven't heard from goldman give me your take in terms of what you've seen and heard albeit we haven't heard from wells fargo on the conference call >> david, thank you for having me back and you're the re, the numbers that have been reported have been very strong, particularly in the capital markets area the advisory area, that's the mergers and acquisition fees that these companies earn, are generally up 2x over a year ago. you also saw strong ecm numbers led by the strong ipo market and then on the trading side, equity trading was strong for all of these companies. the vix was down but compared to a strong third quarter last year across the board the capital market numbers highlighted as will fred said about morgan
10:34 am
stanley really putting up some incredible numbers >> yeah. and james gorman, when he joined us about 30 minutes or so, he think they can keep it going maybe not at the revenue growth rate they're seeing but it was confident. >> i think what's going to be interesting in response to a question i had on the earnings call, talking about the future, we all know we've been in an incredible bull market since the spring of last year and these companies have all captured that growth, which is obviously been good but at some point markets don't grow to the sky and we could have a down market at some point, but i think you're going to find morgan stanley and the other big player continue to capture market share because of the technological costs to remain competitive and these companies have the where with all to make those investments. >> yeah. all right. wilf went through the revenue growth numbers for us. for some it's not particularly
10:35 am
impressive and i come backs to the idea of what's going to get the stocks higher? is it going to be multiple expansion in some way or, you know, an appreciation for the consistency of their business? >> it's an interesting question because what's happened is the start of the year, you might recall the 10-year government bond yield was about 1 basis points and the trade in the banks and as you've seen from your work that bank stocks this year have outperformed the market, but it's been a macro trade. you want to own the banks because rates are going higher i think this quarter is the inflection quarter where the handoff will go to the fundamentals for the group and if the fourth quarters comes in better than the third quarter, outside the investment banking activities, the traditional banking wilfred touched on, the net interest income number, if this grows for the group which we think it will because loan growth is turning positive, i think what you're going to see is the growth in the earnings will drive values higher in 2022
10:36 am
because of fundamentals and it's not going to be driven by the amount of trade as much as it has been in the past 12 months >> yeah. gerard it's morgan, that's where i was going with you there's been focus on the wall street piece of the puzzle wheres the bank are concerned but what is the main street piece telling us and just as importantly, the fact that we're seeing u.s. foreclosures start to increase 67% from a year ago, it's a huge percentage increase as diana olick points out, coming off severely depressed levels given all of the more moratoriums we saw last year in the mist of the pandemic, but how real is the risk as we start to get to more of a normalization in the economy >> it's a good question, and, you know, we all have fresh in our minds in what happened in '08/'09 with the subprime housing crisis and the devastation it caused. we have to remember a couple things, to your point the number are low, coming off a low base, but two, housing prices are up dramatically so should these banks have to foreclose, any
10:37 am
losses will be minimal compared to what we went through in '08/'09. both jpmorgan chase yesterday and this morning bank of america, their consumer banking businesses are kicking out 30% return on equity numbers that's very positive to us what you're going to see is the economy comes back as employment comes back and dlath and the covid problems finally are in the rearview mirror in 2022, these banks are positioned to really capture the growth for next year. >> that's interesting. gerard, we spent a lot of time talking about all the excess cash at the household level. we obviously know well how much money corporate has raised when times looked a little bit darker how do you explain where loan growth comes from in the coming year or why someone would need to take out a loan given all that excess liquidity? >> hi, carl. really good point. two answers for you, first, in
10:38 am
jpmorgan pointed this out yesterday on their call, they're looking at their customers that traditionally will revolve on credit cards that means they'll have a balance at the end of every month and those customers have not been revolving as much as they've done in the past because of the stimulus payments those companies that have accounts at jpmorgan, jpmorgan is determined that those balances are running down pretty quickly so those customers will be coming in to resolve probably going into the christmas season. second, and most importantly, is the commercial loan growth as you know, any of us going to the local target, the walmart, the shelves are not completely stocked and therefore there's an inventory supply problem the inventory to sales ratio in this country is near record lows as the supply chain problems are correct over the next 12 months, everybody builds up their inventories, commercial loans will start to grow bank of america pointed out that their lines usage for their
10:39 am
dealers, automobile dealers, which as you know this is the new car season in the fall, which typically run around 70 to 75% usage, they're down below 30%. as those inventories come back, we expect strong commercial loan growth over the next 12 months. >> real quick here, goldman sachs we haven't heard from givens the capital market strength from others, what are your expectations? >> david, they're going to be strong they're going to be like morgan stanley. they're going to be very good. i think we should all expect to see gang buster number from them when they release. >> all right of course it doesn't mean the stock will go up given the reaction in the market thus far. always appreciate it thank you. >> you're welcome, sir take care. as we go it break take a look at some of the top gainers on the s&p for the week to date. energy names in there, but mgm on that upgrade a couple days ago, even some retailers look at vf corp up8% on the week dow up 420 we're back in a moment
10:40 am
that building you're trying to buy, - you should ten-x it. - ten-x it? ten-x is the world's largest online commercial real estate exchange. you see it. you want it. you ten-x it. it's that fast. if i could, i'd ten-x everything. like... uh... these salads. or these sandwiches... ten-x does the same thing, but with buildings. sweet. oh no, he wasn't... oh, actually... that looks pretty good. see it. want it. ten-x it. yum!
10:41 am
♪ ♪ ♪ ♪ ♪
10:42 am
wells fargo delivering a bearish forecast on bonds. what central bank policies and supply chain bottle necs have to do with it on more "squawk on the street" coming up.
10:43 am
welcome back investors are betting big on bitcoin futures up over 75% since the beginning just this month. securities regulators could approve the first futures based bitcoin etfs as early as next week and joined by steve, co-founder and ceo of crypto trading platform voyager digital. i do want to get your take on that possibility that we could start to see some of these futures etfs green lit from the sec. this has been years in the making >> thanks for having me today. i appreciate it. look, i think from a voyager
10:44 am
perspective we're excited about having a bitcoin etf even though it's on the futures side because it starts to show that it's being more accepted by the government, by the sec, and it looks like that would be the first step until we get hopefully a bitcoin etf that would be based upon the spot which we think is the next step and drive more adoption into the crypto space at least the etf on the futures side will allow advisors into the space to put more bitcoin into their accounts for their customers. >> yeah. of course, it speaks to the regulatory framework perhaps that's beginning to emerge around crypto currencies overall. how do you expect that to evolve >> look, we're really excited about and support a regulatory environment for crypto currencies that's the natural progression of this asset class. i think when you do add regulation and thoughtful regulation to the ecosystem, it's going to spur adoption, and
10:45 am
that's what this industry really is looking for folks like us who are public companies, first public company in the space that's transparent with customer funds, we're welcoming that adoption and that regulation because that really will spur the safety and security of customer assets and the fact that they believe their assets are safe and secure >> we've seen bitcoin rally and other crypto currencies rally pretty strongly just since the start of this month. what do you attribute it to? >> look, i think there's a lot of adoption going on we're seeing on our platform we're seeing more and more consumers buying not just bitcoin, but we're seeing them actually buy all level 1 protocols such as avalanche and we're seeing more adoption the nfts are spurring more adoption as more people are coming into the marketplace and really starting to see some way to use the crypto currencies and obviously i think with bitcoin we're seeing it as the reserve currency, as a replacement for gold and more and more consumers
10:46 am
wanting to hold back in their portfolio. >> yeah. we talk so much about bitcoin. we talk abd ether and ethereum there are a number of other coins, though, that have been moving pretty dramatically this year is it still really just bitcoin ether and everything else or are there other coins that could potentially begin to take for lack of a better term market share? >> we actually look at it in solano, avalanche, all taking market share on our platform from ethereum because we think there's an ethereum alternative, a cheaper, more efficient way to access nfts and other protocols and other projects that are coming out we're seeing more and more adoption of that on the platform and our assets for those protocols are increasing every single day >> interesting so i guess as we head into the end of the year and beyond, i mean we just had fidelity on
10:47 am
yesterday and they're talking about the possibility of bitcoin hitting $100,000 where do you see it going? >> interesting question because i said it was going to be $100,000 six to eight weeks ago and i still believe in that, i believe that bitcoin will be at $100,000 by the end of the year. we're seeing that increase in price, and i'm -- i am well behind $100,000 price target by the end of the year. >> all right we'll see. we'll see how volatile it is if it does, indeed, get there we appreciate it >> thanks for having me. coming up on "tech check" a big show including an interview with lebron james business partner maverick carter with his company getting funding from nike, epic games and others. on ipo watch, software development getlab going public in the nasdaq and the ceo will jo us. "squawk on the street" in the meantime will be right back.
10:48 am
10:49 am
- [narrator] introducing the grubhub guarantee: our promise to deliver the food you love on time, and give you the lowest price, or you'll get $5 off your next order.
10:50 am
after this break, we'll hear from the two paying passengers
10:51 am
blue origin flight yesterday. in the meantime, a check on the broader markets because for the major averages we are at session highs. the dow is up 1.3%, 455% s&p up 1.4%. 4424, having the best day in almost three months. nasdaq is up every sector in the s&p is higher led by materials and tech stock. we're back in two minutes. don't go away. ♪ so, should all our it move to the cloud? the cloud would give us more flexibility, but we lose control. ♪ ♪ ♪ should i stay or should i go? ♪ and we need insights across our data silos, but how? ♪ if i go there will be trouble ♪ ♪ ♪
10:52 am
wait, we can stay and go. hpe greenlake is the platform that brings the cloud to us. ♪ should i stay or should i go now? ♪ ♪ ♪
10:53 am
- [narrator] at southern new hampshire university, ♪ should i stay we're committed to making college more accessible by making it more affordable. that's why we're keeping our tuition the same for all online and campus programs through the year 2022. - i knew snhu was the place for me when i saw how affordable it was, i ran to my husband with my computer and i said, "look, we can do this." - [narrator] take advantage of some of the lowest online tuition rates in the nation. find your degree at
10:54 am
welcome back jeff bezos blue origin completing another successful human flight to the edge of space yesterday carrying four private astronauts some 66 miles above earth in a ride that lasted just over 10 minutes. espoke this morning with the two paying passengers on board that new shepherd capsule planet co- co-founder glen des have vries. >> the best part was the top of the arc we flew and we had a fun of time to look out the window i thought i was mentally prepared for what would feel like to see from earth up there. and it was different and better than anything i expected. >> yeah. i think as an all-time rocket guy, i loved hearing that rocket
10:55 am
motor turn on and better was it turned off and i knew we were in space and it was a good feeling. >> their crew mates, william shatner, captain kirk who at 90 became the oldest person ever to travel to space. >> went to space with somebody who played captain kirk, which was really cool and important because we talked with bill a lot. it means a lot to people to see this iconic character, science fiction, actually go through science fact of now people being able to go to space thanks to blue but, actually what we did is we flew with our friend bill. we actually developed some really nice bonds as a crew. and he's just a lovely person. and to get to see him experience this at age 90 was really a special moment >> now, i also asked what jeff bezos, who drove the crew to the launch pad yesterday, he was the
10:56 am
first on the ground opening the hatch to greet them upon their parachute return in the west texas desert after the trip said to them through the process. >> he had his flight suit on we thought he was going to sneak in and take off with us. >> we thought that, too. >> yeah. that was a little of a surprise. no, he said to us, when we met him afterwards and said that he felt more moved by our flight than his own because he said that this was proof to him that the journeywas meeting blue origin's goal is to build up a highway in space a road for future activities for the human race and to see other people flying on this road i think was very deeply moving to him. it was something he's been moving towards for years it was cool. >> the experience leading up to yesterday's space flight what was it like to work with blue origin, the company has in recent weeks come under a bit of a fire from both former around current employees about workplace culture, concerns about safety that give you any kind of pause?
10:57 am
>> none at all, no. >> we had an amazing couple days the astronauts i have gotten to meet, lucky enough to talk to, want to talk about the fact that you spend a lot of time training for every unit of time you're actually in space. we did the same. saying before, training was fantastic. we had a great time together we learned a ton and blue origin has done everything that you actually all got to see it in terms of some of the holds during the launch process and the day that we scrubbed the flight to make sure that this is an incredibly safe experience so we were in terrific hands >> now, of course, both of you were paying passengers on board this mission how much did you pay for your tickets? >> whatever it was, it was worth it. >> it was expensive, to be honest, in the future it will come down. we all should be able to fly 2021 has been an amazing year. five human civilian space flights. this is really exciting. >> yeah.
10:58 am
to be able to pay and fuel this industry that's starting is actually a privilege we want this to be accessible to everybody. >> so we still don't know how much it cost for a ticket on blue origin's new shepherd, but we know it's a lot we also know going back to july that at that point in time the company already had $100 million in ticket sales. it said yesterday that it plans to do one more of these human space flights before the end of this year and, quote unquote, several more next year, but david, i mean, i think what's really incredible about this is this has been absolutely the year of a new era of private human space flight this was the sixth human space flight mission this year to carry civilian astronauts who have not received government training and there could be potentially and a little hat to washington post which crunched some of the numbers here, there could be three more before this year is done 21 private citizens travelled to space this year, both orbital
10:59 am
and suborbital >> that looks like one of those movies it's incredible. >> it speaks to the software that's inside the hardware and that's the fourth time that that booster, that rocket -- >> has been used, right? >> has been used. >> they plan, i guess to use it again. i'm in awe of shatner. he must have been moving at the speed of light and shaved off ages saying similar things what those astronauts said to you in term of how it's more impactful than you might imagine. >> that comparison to earth as life and space as death was very poignant and struck a lot of cords as well for folks that were watching this very closely. in the meantime, another check on the markets here as we wrap up the hour. we are at session highs. all the major averages are in the green right now. helped powered by the torrent of earnings we're getting the s&p best day since july 20th actually if you want to use
11:00 am
space flight dates. >> that will take us back. >> up 1.4% 4425 that's going to -- well, i think that's going to do it for us on "squawk on the street". >> keep an eye on shares of boeing another concern about defects on dreamline impacting that dow stock. for now, that will do it for us on "stock on the treat." "techcheck" starts now ♪ ♪ good thursday morning, welcome to "techcheck. i'm carl quintanilla with jon fortt and julia boorstin the nasdaq is on pace for the best day since august, best day for the s&p since july then shopify teams up with microsoft and oracle to take on amazon and linkedin shuts down in china then later


info Stream Only

Uploaded by TV Archive on