Skip to main content

tv   The Exchange  CNBC  October 14, 2021 1:00pm-2:00pm EDT

1:00 pm
there's a huge opportunity to get in before they really take off again. >> farmer jim? >> pete's going to hear an echo from his "fast money" call last night. kinder morgan, still a lot of run to room, 6% dividend yield >> tx max, i think it's going higher >> thanks, everybody "the exchange" starts now. thank you very much, scott hi, everybody. welcome to "the exchange." i'm kelly evans. ahead we have lower claims, lower inflation and much higher stocks the dow up 513 right now, better than expected data, giving investors a reason to buy. but is it too soon to put inflation fears aside in. plus, one analyst got a first-hand look at just how low inventory is at places like t.j. maxx and when things are in short supply, who gets the product we'll talk to the ceo of
1:01 pm about their prep for the holiday season with the stock up 51% this year but we begin with today's rally. >> this is the high point right now of the day so far in intraday trading you can see here we just hit about 71 points of the si. this does represent session his for the overall markets with the s&p 500 4,434. a decent-sized rally to start the day. that's getting a little bit of steam here as we hit the midday portion. the nasdaq up about 1.73%. and the dow industrials just about 34,900, up 1.5%. a broad-based rally, especially for the large cap side of things in the stock market. turning now to the semiconductors a key focus point fora lot of traders out there, right now this particular etf tracks the vaneck etf nearly 3% upside right now. but you can see here we're kind of in between this little
1:02 pm
channel that we've seen for a while. so whether or not that represents an area that people want to buy as it hits record highs, perhaps again to reclaim, that could be one thing to watch as well. keep an eye on what's happening with the banks overall because those particular banks that reported earnings this morning are now a little bit kind of wayning in terms of momentum bank of america is still up. wells fargo now down 2%. each of these companies reported better than expected results and then it's probably the ipo of the day and maybe even the last couple of months here git lab, workplace collaboration company. fully remote work environment that company comes out with an ipo today now of 22% maybe this signals something about sentiment when it comes to certain types of companies this particular company has gotten a lot of focus because of its workplace regime and how it tackles things especially during the covid pandemic we'll see if it can maintain
1:03 pm
some of that momentum. >> getting after it, dom, thanks very much. stocks are rallying broadly today on strong earnings from the banks better-than-expected economic data. but consumer sentiment is still under pressure do these worry data suggest the skies are clearing joining me is president and ce o of thorn berg investment manage. what do you make of the outsized >> it's certainly the number one question i get from almost every client i think what we're seeing here is a little bit of a loosening of the supply chain bottlenecks of the goods prices problem. what investors really need to keep in mind is the housing price challenges that are out there in the context of how that feeds in, and also wage pressure so those are the two things that longer-term i'm much more focused on than simply this supply chain challenge >> does all of this make you
1:04 pm
bearish then on the economy? >> no, actually i think the economy's doing pretty well. the recovery bounced from the continued pandemic recovery is wonderful. but it's starting to show some side effects so, what we have high cpi or high price increases, high wages, those are good things that's a recovery problem. but right now it's a problem that the fed has, and ultimately what we need to look at what we'll see is are they going to throw a little bit of fire extinguisher into the mix of this flaming economy >> so, absolutely people are wondering just how much they might want to tap the brakes here obviously the taper they talked about yesterday in the minutes and kind of the fact that it is looming. but tapering by $15 billion a month still leaves a lot of purchases or however that number's going to shake out. so, you know, what happens then if -- let me sort of ask it to you more tactically, where do you think the market heads if the fed is possibly tapping the
1:05 pm
brakes or if high prices themselves are slowing the economy? >> sure. so, what you're really looking at is a rates question and one thing that is extremely important for all investors i think to understand is the correlation of interest rates and equities is really high and extremely important. so, if you look at, for example, long-duration growth stocks, rates rise because potentially the fed is tapping the brakes in the context of a strong economy. they may look like the skinny jeans in your portfolio, you may have a few too many of them. and that's really the challenge of asset allocation and of portfolio instruction. [ laughter ] >> if they are like skinny jeans and the fashions are changing, then what do you think people should be adding here? >> i think folks are generally underexposed to some cyclical names. we think financials have some room to run, as well as make sure you have a little bit of international exposure
1:06 pm
these are very typical exposures for folks to have. but at the end of a really long, strong growth rally in the united states, maybe people are a little bit underexposed. >> all right, jason, thanks. jason brady joining me from thornberg investment management today. understocked store shelves causing a buy to a hold as significant supply chain problems are impacting stores. after visiting store locations and seeing shelves cleaned out, especially in seasonal items and stores also seemingly understaffed, loop cut its price targets on burlington, ross and tjx. loop capital director is behind those calls. she's the grinch this season laura, we just talked to you about home depot and lowe's. we had to have you back to talk about this call because just yesterday we talked to different analysts about long-term positive trends for the off-price retailers. you heard pete najarian speaking favorably about this
1:07 pm
this is a well-loved name. what are your concerns >> no doubt it's well loved, and it's one we've loved over the years. but i'm seeing something that i haven't seen in years, which means as soon as you step outside of major metros, there's not nearly the amount of premium goods or luxury goods that there used to be weaknesses in inventory levels, particularly in seasonal goods, which is the opposite of the direction they've been going for years. and we know what's coming. we know there's going to be a massive hiring surge in advance of the holidays. and we know that there is a big backlog of goods that just can't make it to the stores right now. so, seeing some issues in october that might not look tragic, our concern is that they get worse over the next two months and you have a disappointing holiday season because tjx has been a well-loved stock and is trading in multiples in the 20s, there's just not much room for error this holiday season. >> let's talk about some of these price target cuts. tx max goes from 80 to 65.
1:08 pm
and burlington from 410 to 285 explain that >> sure. so, some of it is just plain old cuts to sales and margins, the norm some of it is that we also raised our discount rate that we see cost of capital heading a little higher, the risk rate for these companies, they're more risky than they were even three months ago we came out six months ago with a similar round of checks, as positive as we've ever been, and thought that the lean inventories would actually create higher gross margins. right now, though, i think we're hitting a tipping point where they just won't be able to bring in the sales that the street expects. and expectations are pretty high going into holidays that we will see a rebound as we continue to recover from covid >> that's really interesting there what you said about the discount rate. at a time when we have historically low interest rates, explain why you're actually hiking your discount rate. >> well, we think about the direction. i think that the direction for rates is higher. i heard your last guest, and if
1:09 pm
the fed's hand is pushed by inflation, and, look, all these companies we've been talking about, the home improvement centers, the off-pricers, even tjx says it will be raising prices and it will have to, to offset the increased labor rates, the increased supply chain costs. we think supply chain costs for these companies are doubling right now in realtime this holiday versus last. that could pressure the fed, could push the fed's hand next year >> and, laura, as we wait to see what happens in the next couple of months, if we get closer to these price targets, obviously your view would maybe change about the valuations but if it proves that they're able to keep growing that top line or that this isn't as much of a break as you anticipated, that would maybe be a more positive catalyst for people to watch? >> yes so, if they do see on the lean inventories better gross margins, they're able to somewhere on ofset with price increases the cost increases
1:10 pm
they're facing, this is a rating that we could find ourselves reversing in less than six months >> laura, thank you so much for joining us we appreciate it >> you bet, thanks coming up, china's trading platforms are now on beijing's radar amid the continuing government crackdown we'll look at the regulatory risks for the so-called robinhoods of china. the investor shift from fossil fuels to esg friendly investments, not to mention poor returns, is leaving many we're back in a moment ok, let's talk about those changes to your financial plan. bill, mary? hey... it's our former broker carl.
1:11 pm
carl, say hi to nina, our schwab financial consultant. hm... i know how difficult these calls can be. not with schwab. nina made it easier to set up our financial plan. we can check in on it anytime. it changes when our goals change. planning can't be that easy. actually, it can be, carl. look forward to planning with schwab. schwab! ♪♪ flexshares are carefully constructed. to go beyond ordinary etfs. and strengthen client confidence in you. before investing consider the fund's investment objectives, risks, charges and expenses. go to for a prospectus containing this information. read it carefully.
1:12 pm
[ sigh ] not gonna happen. that's it. i'm calling kohler about their walk-in bath. containing this information. my name is ken. how may i help you? hi, i'm calling about kohler's walk-in bath. excellent! happy to help. huh? hold one moment please... [ finger snaps ] hmm. ♪ ♪ the kohler walk-in bath features an extra-wide opening and a low step-in at three inches, which is 25 to 60% lower than some leading competitors. the bath fills and drains quickly, while the heated seat soothes your back, neck and shoulders. kohler is an expert in bathing, so you can count on a deep soaking experience. are you seeing this? the kohler walk-in bath comes with fully adjustable hydrotherapy jets
1:13 pm
and our exclusive bubblemassage. everything is installed in as little as a day by a kohler-certified installer. and it's made by kohler- america's leading plumbing brand. we need this bath. yes. yes you do. a kohler walk-in bath provides independence with peace of mind. call... for fifteen hundred dollars off your kohler walk-in bath. visit for more info. welcome back as china's crackdownplays out, the china internet is trying to hold onto its gains. trading just around 50%. here's a look at the largest they're positive for october we're talking about alibaba,, pinduoduo and baidu.
1:14 pm
pin and baidu have dropped but are still positive on a one-year basis. it's 11% higher in october and on pace to break a three-month-long losing streak charlie munger's daily journal nearly doubled its alibaba investment in q3 shares of china's nasdaq are also down sharply today after state-owned media said they could face regulatory effects. >> reporter: thanks so much, kelly. the communist party mouthpiece, the people's daily, stressed that the new personal privacy law will govern the export of daily of mainland chinese citizens because of that the law is one that had said that this new
1:15 pm
export, this governance of exporting data could pose a new challenge for online brokers offering stock trading services for mainland markets or major markets including the u.s. and hong kong. it specifically named futu and fintech as companies that need to clarify how they share data of their mainland chinese customers with foreign regulators such as the s.e.c. as well as finra. it cite sized up fintech for transferring client data to its u.s. partner interactive brokers. futu said that it's assembled a team to check its use of client information to ensure compliance the new personal information protection law, kelly, as you had mentioned, goes into effect november 1st >> we learned that microsoft is shutting down its local version of linkedin, in china. this apparently was the last major u.s. social network still
1:16 pm
operating there. >> yeah. and actually it's been a very big topic of discussion here the hashtag microsoft to close linkedin china is ranking number 12 right now on the top -- among the top-trending topics on social media a lot of people have been talking about how this is going to be really tough for them because they enjoy going on linkedin to be able to search for jobs for english-speaking jobs to look to really broaden their prospects. this is something that a lot of people have been saying is really too bad for a lot of chinese people and one other thing that was kind of interesting was that the chinese version of linkedin actually left out a lot of the discussion about the difficult environment that microsoft has said -- linkedin said it found itself operating in. so there's been a lot of discussion about how different the two countries are at this point. >> and what sort of the real reasoning is, microsoft said it
1:17 pm
will shut down due to a significantly more challenging operating environment and they will instead launch a jobs search site in the reason that doesn't have linkedin's social features a major move there eunice, thanks so much as always, we appreciate it. coming up, we'll speak with the ceo of overstock about the supply chain issues he's seeing. we show the chart and tell the story. with the shares of 7.5%, here's ceo saying how they are dealing with the labor crunch. >> one of the things we recently did was introduce the $15an hour minimum wage. and i think that helped because i think this is a time where we, to make sure that people understand that these companies, we're here for you, and we understand the rising costs that
1:18 pm
they're also incurring in their lifestyles right now we were able to also look at our pharmacists and our pharmacist technicians and really applaud them for some of the work that they've done so we've passed on some bonuses to those individuals on our stores and so it's helping. if you wake up thinking about the market and want to make the right moves fast... get decision tech from fidelity. [ cellphone vibrates ] you'll get proactive alerts for market events before they happen... and insights on every buy and sell decision. with zero-commission online u.s. stock and etf trades. for smarter trading decisions, get decision tech from fidelity.
1:19 pm
for smarter trading decisions, hey lily, i need a new wireless plan for my business, but all my employees need something different. oh, we can help with that. okay, imagine this... your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, asap! so basically i can pick the right plan for each employee... yeah i should've just led with that... with at&t business... you can pick the best plan for each employee and only pay for the features they need. you founded your kayak company because you love the ocean- not spreadsheets. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit
1:20 pm
welcome back to "the exchange," everybody we're just off session highs dow is up 526. strong across the board with gains of 1.4% to the blue chips. 1.5% for the s&p 1.6% for the nasdaq. bond yields again just kind of sink lower, adding a little bit more support there let's check the sectors. every group is in the green. technology is leading the way.
1:21 pm
but look at materials as well, up more than 2% today. we did have better data on jobless claims energy up there with about an 0.8% gain. still the leader for the year, up 50% u.s. steel is jumping, following an upgrade to a buy with a $25 price target saying they're seeing increased demand and higher pricing for steel as global economic conditions improve and go-go dropped as much as 5% after tesla's elon musk said he's going to provide inflight wifi shares are down about 3% well, more workers on strike, staffing shortages having a domino effect, and wage inflation could actually be a good thing in some cases maybe in most cases. it's all coming up today in "rapid fire. boeing in the red today. one of only two stocks
1:22 pm
walgreens, united health and intel leading the way. we're back in a moment it's a thirteen-hour flight, that's not a weekend trip. fifteen minutes until we board. oh yeah, we gotta take off. you downloaded the td ameritrade mobile app so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard before we board. excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position. you two are all set. have a great flight. thanks. we'll see ya. ah, they're getting so smart. choose the app that fits your investing style.
1:23 pm
1:24 pm
if we're going to have some real serious trade talks with china, we need a simple set of ground rules first, no talks if the chinese keep trying to bully and intimidate taiwan. watch or listen live on the cnbc app. welcome back, everybody. with markets near session highs, we see about a 1.5% gain across
1:25 pm
the board. materials up 2%. technology there as well energy is the laggard today. and we'll have more on that story in just a moment but in the meantime let's catch you up on a few other stories. it's time for "rapid fire" labor edition. we're digging into how staffing issues and wage inflation are impacting some big names joining me is chief investment officer. and seymour investment manager you're not an extravaganza, you cover it courtney reagan is here to round things out deere is the latest company facing a worker strike with roughly 10,000 uaw members from 14 facilities across the midwest refusing to work after rejecting a contract worked out between the company and the union. the members are saying the agreement didn't sufficiently increase pay or guarantee pensions for new employees the news briefly setting shares lower this morning before recovering coinciding with one at kellogg
1:26 pm
and follows recent strikes at mondaliev. and the looming strike in hollywood. is it just our imagination or are these becoming more frequent >> this is where inflation is now a mainstream issue and not just a wall street discussion about whether it's temporary or not. we look at deere the unions were looking for about a 5% increase in wages this year and next year. well, we saw cpi this week up 4.5% and we saw the government, the new social security cost of living adjustment is going to go up almost 6% so that's where the perspective is from the unions and even they were offered for the next couple years wage increases of about 2%. and we're going to hear more of this obviously that's a small percentage of sort of the private sector pie but this rise in inflation is beginning to hurt people's
1:27 pm
pocketbooks. >> we just talked to laura, she is seeing staffing issues at tjx. we just heard from the ceo of walgreens who said she was able to increase pay and pay out bonuses. it seems like the only response is to try to keep increasing pay. >> exactly and i think, kelly, it's a really hard thing to pull back once you begin to offer it, especially if you're doing it to try to pull an employee away from or if not away from somewhere else, to incentivize them to come to your location over another location. it would be very hard later to pull that back certainly incentives or one-time bonuses are something else but it's going to be pretty incredible i think to see what the labor situation looks like as we go through these final months of the year because this is when all the seasonal hiring is happening for all the retailers in store but also at those distribution centers and all of those package delivery companies and many of them are saying kind of admitting what's going on in the labor situation and saying we're just going to have to give
1:28 pm
our own employees more hours that's something that walmart had been doing for the last several years, as opposed to going out and doing a very big hiring push just for seasonal workers. >> and target and their strong performance, the ceo has attributed their low employee turnover to the fact that they were able to increase pay and keep people on in the early stage of the pandemic. do you avoid companies like deere, kellogg while they're having these issues? or at some point would you be avoiding the entire s&p 500? >> i think the markets have priced in a lot of these concerns we already knew some of this was going on for deere on some level this is stock that's still up 23 or 24% year-to-date the market has bought into the challenges here. i think i actually like caterpillar over deere here because they both maybe have
1:29 pm
some cyclical dynamics caterpillar is four or five turns cheap to deere on the multiple they really have to invest in precision ag both stocks look interesting cyclical challenges may be more structural for deer. and i like caterpillar over deer >> those shares are up nearly 3% so that's kind of one thing to take away from this. let's talk domino's which is falling short of third quarter revenue estimates amid staffing and stimulus head winds. here to deliver her hot take in the first "rapid fire" drop-in since early 2020 in a sign of normalization. kate rogers joins us >> in a decade anyone who knows me knows i have a lot of hot takes, kelly. the same for sales declined down
1:30 pm
1.9% first decline in ten years on a two-year stack, though, which is what the ceo kept talking about on the call here, up over 15%. so that's still a pretty strong number there some staffing headwinds, you know, causing them to close stores early in some cases, not being able to handle all the orders that were coming in and they also mentioned that the stimulus rollout also impacted them negatively in the quarter the staffing thing, though, was the big focus, and it's what basically every analyst on the call was asking about. they were talking a little bit about automation, removing some of the tasks that keep workers kind of tied up and slow them down in some cases things like folding boxes. they're trying to get rid of that. >> make that a little bit easier for them to do and drivers are not getting out of cars. he said i foresee a future where the driver doesn't have to get out of the car they partner with neuro, that robotics delivery company.
1:31 pm
so maybe robotic pizza delivery. i mean, he didn't say that specifically, but that's kind of where my head went as you mentioned, though, the stock turned around. i think people are feeling a little bit more confident after the call >> i think it's about to go mainstream tesla was kind of joking, not joking this is ultimately it seems to be somewhat disinflationary. technology is going to replace a lot of roles that people used to do because of this >> yes but keep in mind that's been going on since the history of time, technology evolving and replacing that i'm a believer that technology also creates a bunch of jobs domino's, it wasn't just delivery people. they couldn't find enough cooks to make the pizza. but i think this is certainly a widespread situation and when you have companies like amazon that's now offering $22 an hour, a lot of these other businesses are having to raise
1:32 pm
wages to compete with the bigger companies in order to attract these workers to do business >> any trades you'd offer on this one >> i tell you what you had your chance this morning, but the stock's now probably 7%. i like domino's. peter thinks there's a lot of problem in the cost there. but i think uni growth 30 times next year with their international story. >> and the shares are now up 2%. kate, great stuff. thank you very much. our kate rogers. the ceo of domino's will be on "mad money" tonight. don't want to miss that. fedex labor costs are outpacing their price hikes, rival ups is getting an upgrade. setting strong ecommerce sales is a continued growth driver the firm saying the recent drop in shares likely in sympathy with fedex
1:33 pm
steve will also talk about peak demand and disciplined capital allocation reasons to be bullish. shares are up nearly 4% today. isn't ups also a highly unionized workforce? i'm very interested in the sort of the way things have been turned on their head here that traditionally people, i think, favored fedex over ups for that reason highly unionized work forces are starting to go on strike >> look, ups over fedex, by the way, was a great trade four or five months ago. i'm going to tell you i'd rather own fedex here having underperformed by 23% year-to-date significantly cheaper. we know fedex has been not able to operate under the same consolidated margin as ups they're probably 500 basis points better than fedex on their consolidated margin, which is why the company trades at such as premium. the secular ecommerce story is great. but to get to your question, i
1:34 pm
think pricing power for both fedex and ups is as good as it's been and maybe as good as it ever gets. and therefore i think they can offset a lot of the transportation and labor costs and i think fedex is the one to own. and you're protected if that's a pair trade people are worried about cyclicality in the economy both these stocks will suffer. but fedex has priced in a lot of bad news >> they are going to be the bottleneck if there really is one for all of the packages this season they've already given, i think, most retailers kind of those drop-dead dates by which they have to ship thing and we've heard people saying order as early as you can. >> absolutely. i know that last year in the pandemic certainly the situation was a little bit different but it was still a pandemic. and ups was sort of communicating to the retailers different price changes. and a lot of the retailers didn't really have any choice. and they've got orders they have to fulfill in that key fourth quarter. i think that there is just a lot of relationship building there that really cannot be unraveled.
1:35 pm
and this is really the lynchpin to how all of this is going to go this christmas season for ups, for fedex, and the retailers both getting those items to the store and then shipping from the store and to the consumer and from the warehouses ultimately. and, look, the ceo of ups used to be the former cfo at home depot. she is an operator and she knows how to run a business so i would not count out ups. >> i see everyone nodding as well there fedex shares down about 12%. ups trying to hang onto an 11% gain after today's 4% hike one possible beneficiary could be bed bath & beyond the firm is still downgrading shares, anticipating a broader slowdown bed bath & beyond shares are down about 7% this week. and despite some trader interests are still down about
1:36 pm
20% on the year. peter, what kind of hard landing do you foresee here, and how much of a cushion is there from savings? >> well, the one thing with bed bath & beyond is they are the competition for their product is so intense there's nothing special about what they sell compared to what you can get at a walmart or target while the macro could be right in that wage increases hopefully will at least try to capture to where inflation is, i think bed bath & beyond in terms of their competitive stance still has a lot of work to do. and the wage gains that we're seeing are still below the pace of inflation real wages are still falling that is what is going to crimp consumer spending. >> nominal gains even in the 4 or 5% rain, if the cola just went up 4%, that's not cutting it
1:37 pm
i think the stock actually is worth owning here. it's three and a half times multiples near the bottom of its range. it's got about a billion in cash i think the brand turnaround is there. we know all about supply chain with bed bath & beyond this story has endured a lot of this pressure for the last three or four months i'd be the other way on this trade. >> if one of them could change their ticker, they would be doing us a huge favor. every time it is a story on one or the other at least blackberry. yeah, it's tough trips you up every time. thank you so much today. coming up, energy prices are soaring, but few investors can capitalize on that rise. how the push for esg is causing major ripple effects in the oil and gas industry, including hampering production remember, you can catch the show any time, anywhere by listening
1:38 pm
to and following "the exchange" podcast. we're back in a moment that building you're trying to sell, - you should ten-x it. - ten-x it? ten-x is the world's largest online commercial real estate exchange. you can close with more certainty. and twice as fast. if i could, i'd ten-x everything. like a coffee run... or fedora shopping. talk to your broker. ten-x does the same thing, - but with buildings. - so no more waiting. sfx: ding! see how easy...?
1:39 pm
don't just sell it. ten-x it. you could email an urgent question to lisa in marketing. and a follow up. and a “did you see my email?” text. orrrr... you could see her status in slack. and give lisa a break while you find someone online who can help. slack. where the future works.
1:40 pm
welcome back to "the exchange." i'm rahel solomon. and here's what's happening at this hour. the white house may pick a former head of the fda to once again lead the agency. "the washington post" reporting a top contender for the post, although no final decision has been made. fda advisers vote on covid booster shots and who's likely to get them first. that's tonight at 7:00 eastern steve bannon may soon face contempt charges he says he will not appear at his deposition today for the house's investigation into the january 6th insurrection he says that former president trump told him not to do it. the panel has set a vote on holding bannon in contempt
1:41 pm
and trump scheduled for a deposition of his own on monday. a new york judge ordering him to be deposed for a lawsuit by a group of mexican protesters who were assaulted in 2015 outside of trump tower in new york city. the protest happened after trump called mexican immigrants rapists and criminals. and in spain fresh lava flows have forced another 700 people to leave their homes, bringing the total now to about 7,000. the magnitude 4.5 earthquake has also shaken the island of la palma. it's the strongest quake since the volcano erupted. oil prices are hovering around a seven-year high there was a lot less drilling going on than the last time prices were this high. as my next guest explains, that's because the big players are not investing in production anymore. leaving the surging market to smaller produces who can't keep up he says banks are also reluctant to make energy loans
1:42 pm
joining me now is greg with the "wall street journal." and congrats on the new book and i loved this piece which i think explains to people why there is not going to be a massive supply surge do you think this means that oil prices might remain at these elevated levels for quite some time >> i do. so, i've been covering these markets and some of these frackers over the years and never thought i would see this kind of change where they're focused on dividends, cash flow. it used to be production they used to talk a big game about returning capital. they never did and now they are there's all kinds of pressure on the part of investors. and just seems like they've changed. we're talking about the public companies, the big companies the privately held companies, drillers and such are much more important and they just are not big enough to really step in here and help us out >> right and i think it's important to
1:43 pm
mention that while the esg trend is very important, we have a decade of terrible returns for a lot of these drilling activities oil and gas, shale it comes on top of an already -- is that why the banks are so reluctant? of course they're worried about esg on the one hand. but on the other hand because it hasn't been historically a great return on income, return on their loans, i mean. >> yeah, that's exactly right. so in some of them i think both lenders and investors are hiding behind maybe esg giving that as the excuse or the reason but they've been unbelievably awful. some of them are heartfelt and some of them are sort of virtue signaling, i would think and, sadly we're not ready yet to transition. we still get 80% consumption comes from fossil fuels. challenges in terms of production we just don't have the private capital out there.
1:44 pm
there used to be tons of private equity firms that were interested in energy and investing in energy, about 29 or so just a few years ago. and today it's just nine so the private money is just not there. >> and i've seen other publications saying that private equities, pumping up oil prices right now and all of that may be relative to zero but it's certainly nowhere near the level it's once was at do you think this discipline remains though, greg here is the sort of fundamental irony. if this remains the case, and if oil price remains higher, then ultimately you're going to have to get more players in the market it's so hard to maintain an equilibrium at a higher oil price. >> when it comes to commodities like energy, high prices solve high prices. you do think over time you've got to figure there will be opportunities, people will step in and we need them
1:45 pm
frankly, it's a regressive tax it's the underclass, the people that really can't afford the pump and to heat their home that get hurt the most. we are going to need more investment in alternatives and also fossil fuels. >> absolutely. and i think we're talking 15% of income we know that so this is on the gasoline side, not the oil side the spikes are even worse on the natural gas side, maybe a little bit more contained in the u.s. but probably a 30% increase in heating bills after this weekend. do you anticipate, you know, any kind of supply change in the u.s. where we could end up going from this shortage to a glut at some point or no >> well, it all depends obviously on the global economy. if you argue that china's going to slow, then maybe globally we have a sufficient amount of oil. we're going to grow our consumption, our need, our
1:46 pm
demand for oil over the long term but very slowly maybe 1% a year. you could see potentially a surge. and i'm sure they're itching to increase production. but until now they felt this pressure from investors for the first time i've ever seen it, they're heeding that pressure. >> greg, thanks so much. such great stats on this piece his new book "a shot to save the world" is available on october 26th and stocks of overstock are down we're going to speak with ceo jonathan johnson about that in the upcoming holiday season next here's a quick check on the markets. we're pretty much near session highs now. the dow up 515 points. to a fin this broker is your man. let's open your binders to page 188... uh carl, are there different planning options in here?
1:47 pm
options? plans we can build on our own, or with help from a financial consultant? like schwab does. uhhh... could we adjust our plan... ...yeah, like if we buy a new house? mmmm... and our son just started working. oh! do you offer a complimentary retirement plan for him? as in free? just like schwab. schwab! look forward to planning with schwab.
1:48 pm
1:49 pm
welcome back shares of ecommerce player are down about 15% in the past three months as supply chain woes and worker shortages have hit the retail space. but it might have an advantage over others as bottlenecks persist. they only offer items for sale that are actually in stock or
1:50 pm
overstocked. and it's already worked with suppliers to put itself ahead of the holiday surge. let's welcome in's ceo jonathan johnson jonathan, it's good to have you. tell me what you mean in terms of positioning yourself with suppliers. >> overstock's ceo >> we have over 4,000 suppliers. they are really good at getting product into the united states so we can list it on our site. we never put anything on our site that's not in a warehouse and ready to ship. unlike other companies that are just in time that suffer from bottle necks, that doesn't affect our customers because we only sell what we have in stock. >> i imagine you have a lot of seo-driven traffic if i am looking for an item you don't have, that would still be a lost sale. >> sure. but from so many suppliers what
1:51 pm
we have found is that when one supplier is out of stock on a modern black leather couch another supplier has one similar. while our in-stock percentage is not as high as it was two years ago it is better than it was going into the holiday season in 2020 we are think we are in a good position. >> you are in a better supply position this year than you were last year? >> we are. our in-stock percentage is higher we have great product. one of the products everyone is having a hard time getting right now, christmas trees -- we have them for sale on the site, ready to ship right now. so, you know, when people are looking for that holiday decoration, come to overstock. we have got it. >> i just saw juan for sale at cost khouw that was either $500 or $600 basically. it was lovely but that's a lot of money for a christmas tree. let me ask you about sort of an
1:52 pm
aanalogous situation an analyst downgraded a retailer because she didn't think they had never inventory in stock why wouldn't her downgrade apply to you >> let me be clear, we don't sell overstocked goods that's a legacy name we are selling this year's product. this market is particularly good for our business model we don't sell the product if we don't own the product. it is owned by the suppliers, in our warehouse. in a time of particularly high demand and low supply chaus suppliers want to have maximum ways to sell their inventory if they are forced to put it in a fulfillment by amazon warehouse or a castle gate at wayfair, that limits the channel
1:53 pm
that they are selling it to. we let them sell it anywhere so we have this year's goods more suppliers listing their products on our site i think this high demand/low supply time is the perfect time for overstock to excel. >> that's a very, very interesting case obviously, your two-year performance is there, dramatic, up 600%. jonathan thank you for joining us today we look forward to following the story into the christmas season. >> thanks, kelly. >> jonathan johnson the ceo of still ahead a jump in foreclosures last quarter as aid programs wore out. but that doesn't spell doom into the housing market xt will look at the numbers ne
1:54 pm
♪ 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. paola needs a parachute. so, salesforce customer 360 unites your marketing,
1:55 pm
sales, commerce, service, and it teams around her. so they can deliver a great experience from anywhere. ♪ (whistle) ♪
1:56 pm
welcome back foreclosures soared last quarter as mortgage bailout programs ended. don't let that jump fool you things may not be as bad as they
1:57 pm
sound. diana olick is here to explain. >> the headline number is pretty big. but let's put it into perspective. we normally see about 40,000 new foreclosure actions a month. with the mortgage bailouts, just 3,000 to 4,000 forbearance programs, public and private allowed borrowers to delay their payments for 18 months they are ending for the first wave of borrowers. 25,000 properties have been foreclosed upon. up 67% a year ago and up 32% from the last quarter. now, the numbers are still well below normal but the rise does serve as a washing that foreclosures are headed back to prepandemic levels there are still 1.4 million borrowers in forbearance plans according to black knight. i spoke dave stevens, former fha
1:58 pm
commissioner under obama during the subprime foreclosure crisis. he says i think the forbearance cliff will be minimal. unlike the bubble where home prices dropped 20% from peak to trough, this forbearance saw prizes rise. those who aren't able to get current on their loans could set, possibly at a profit. >> what has the impact been on landlords given how long the moratorium lasted. >> for a landlord, if they were in trouble on their mortgage they could get into the programs as well. really for them it is getting the payment in from the renters so they can pay the mortgage itself and they can also pay some of the costs, the property upkeep, the taxes. it has been rough for them as you know, the eviction moratorium expired so they are starting to see more income coming in. >> the foreclosure moratorium and the eviction moratorium, for
1:59 pm
landlords one is a bigger hit than the other what has been the impact diana, as we talked about all the people who have been buying homes investorwise taking them off of the market. one of the concerns was that you could unleash a supply back onto the market if the market turns >> kelly, i can't tell you how much pushback i have gotten from other analysts saying there is no way that we are overbuilt and we are going to have too much supply given how much demand wooet we have. for the landlords and the investors, they are still seeing high demand from renters, increased prices for them they have in reason right now to sell. if you were to start to see more inventory coming on the market i think you would see it snapped up by investors. i don't think it is going to hurt the overall housing market. >> maybe now would be a better time for it to be absorbed thank you. let's get a check on merck shares taking a bit of a leg
2:00 pm
lower. on its's fifth day of falling. the pill meant to be administered to high-risk individuals with a newly diagnosed covid infection. that does it for "the exchange." stay right there, because "power lunch" begins route now. welcome to "power lunch" everybody. thank you, kelly wall street in rally mode today. here's what's ahead on a busy hour blame it on the weather. the rain that's what companies usually do when their earnings are weak will corporate america's new earnings excuse be the broken supply chain plus, the next trillion dollar industry? supporters all hydrogen a low carbon miracle but it's not without controversy. we will look at whether it could be the next big thing in energy. and th


info Stream Only

Uploaded by TV Archive on