Skip to main content

tv   Power Lunch  CNBC  October 18, 2021 2:00pm-3:00pm EDT

2:00 pm
yes, indeed, it does welcome, everybody, to "power lunch. let's give you a peek at what's on the menu. the race to the bottom little love on wall street for cable stocks growth slowing, competition rising how should you invest in a sector facing a growing number of challenges? plus bitcoin's big week. prices are soaring the first bitcoin putts etf is about to start trading should investors jump in or is it buyer beware. volkswagen's ceo will join us to discuss the chip crisis, low inventory, the ev push, and elon musk's surprise appearance on a vw conference call. a check on the markets the dow is down a 55 we were briefly positive the s&p hanging on to an eight-point gain the nasdaq up 92 points or two
2:01 pm
thirds of one percent. you heard about housing. home builders are higher on a bounceback in home builder sentiment. lennar leading the way there weighing on the dow is disney. bay close downgraded the stock on concerns over slowdowns on streaming numbers. shares are down 3.5% to $170. a strong start to earnings season but this week's results could decide the fate of the mid-october rally that has been boosting the markets with us is stephanie link, high tower's chief investment strategist and a cnbc contributor with stocks to watch. you have three stocks you have got your eye on and think we should, too. let's begin with one that hasn't gotten a lot of love in recent years. ibm. >> that's for sure it is good to see you, tyler this is a restructuring story. any progress they are making on the new businesses, which are really cloud and ai, blockchain,
2:02 pm
that sort of thing, that's what we are focusing on for the quarter. they bought red hat two years ago and that business has been on fire. they grew 17% last quarter alone at red hat i expect that momentum to continue but this is the focal point, for sure they also spun out their infrastructure outsourcing business why this is important is because it has been a drag on sales by 100 to 150 basis points. i think that will be good news that's november 3rd, the official spin. of course in general commentary about enterprise send can the recovery we heard from salesforce, from workday, cisco, all starting to see a recovery i expect ibm to benefit as well. it is not expensive. it is 13.5 times earnings and you get a 4.5% dividend yield while you wait for the restructuring. >> what did you think about what jim chain owes just revealed on the "halftime report" that he is short bip and questioning their financials >> well, i can't speak to what he's coming out with regards to
2:03 pm
being short it, but i would simply say i think the new management team is really doing a very, very good job on focusing what they can control and they have a whole new leadership division. right? i think it's really all about can they shed the businesses that aren't working and grow the growthier businesses that's what they have been doing. i don't know i don't give it much credence to be short this time not at this multiple or this valuation. >> let's go onto another stock that has been in and out of favor over the past few years. that is american express their business tied to reopening stocks, business travel, most specially. >> leisure spend has recovered we are above 2019 levels we heard it from hilton, expedia and all kind of companies that leisure command is back. but it is business spending, t and e spending that are in the
2:04 pm
early innings. i don't think it's appreciated that this is going to recover into next year i was encourage by the bank's credit card billings as a whole, average, up 25.2%. that's very encouraging. so people are spending they have a huge range, though, in terms of guidance and in terms of earnings. 750 to 870 i hope they are going to narrow that i think they will. they are going to stay conservative becauses that heavy heavy investment spend year. you are going to get the operating leverage next year as the business travel returns. >> finally, one that is in the energy area and my favorite company name to pronounce, shum better jay, i love it. >> it is a hard setup. it is up 55% on the year it is up 131% in the past year but only trades about 25 times earning. this is the leader, number one in the industry. i want to hear about the demand and are ofry, and cap ex has been coming down the majors are cutting capex by
2:05 pm
17 to 20% this year. does that continue and lead to a tight innocence the market. >> i like their international business and their digital strategy can they do ebitda i think they can i am looking forwarded to the call. >> do you think this is in general going to be the kind of earnings season that tells people this has to be a stock picker's market the better competitors versus the weaker links? that kind of thing or is it more about row nation and the macro variable like bond yields and how the cpi does and that kind of thing >> it has been such a rotation year the first part of the year was value into growth. then we got a growth scare with delta. mid part of the year -- excuse me we had into value from growth in the first quarter. then you had into growth in the second and third quarters. now you are seeing a rotation again. i think it's because the economy is on the mend and people feel better rates are going higher that usually favors value overgrowth. but to your question, i still do
2:06 pm
think it is a stock picker's market you are going to have the haves and the have nots. look for companies that have pricing power. that's going to be the most important thing so they can offset the inflationary pressures. >> that's some of the data that coming out later this week i think a couple of inflation numbers. stephanie, nobodyjams more content into less time than you do stephanie link, thank you real talent appreciate it. >> amen. the apple event just concluded. the shares turned up during it let's get to josh lipton for everything we need to know. >> it is a beast of a machine. that's how apple is describing its new macbook prowhich is going to be powered by the big new brains, m 1 faroe and m 1 max chips which apple claims are faster than the original m 1 chips launched about one year. tim cook said it is helping to fuel the mac growth. two sizes for the new machines unveiled a 16 inch version for 2499, and
2:07 pm
a 16 inch version for 1999 order today, available next week apple says users are going to feel the different they claimed amazing battery life, updated the displace the machines are quieter better cameras and mics. we know the mac has been a winner for apple people need those machines as they work from home during the pandemic the question is can apple keep the momentum going on the course ahead. also announcing new third generation airpods with new design, wireless charging for $179 entry level airpods now cost 129. airpods part of the faster growing wearables division along with the watch >> so they must be confident that their supply chain is going to hold up and they are going to be able to deliver in a timely way all the machines that they expect customers are going the demand as we head into christmas? >> i think they must feel like they have to have an event like
2:08 pm
this because they have to keep showing off their technology, pushing the boundaries, keeping up with rivals and competitors it is going to be interesting. apple like so many other companies in so many industries is dealing with the ongoing historic chip crunch they talked about how they have been impacted before we will see whether they could be supply constrained. if they are, then the question is what is the impact? some analysts say even if there is a delay but not demand destruction. in other words, if you can't get it medley you will wait for it we'll see. nugs alert on facebook julia boorstin has it. >> tyler, facebook is playing defense ahead of a wave of more exposes about the company that it says are coming the facebook's communications handle tweeting out quote over the last six weeks including over the weekend we have seen how documents can be mischaracterized obviously, not every employee at facebook is an executive not every opinion is the company's position going on to tweet, quote, right
2:09 pm
now, 30-plus journalists are finishing up a coordinated series of articles based on thousands of paged of leaked documents. after so many critical exposes at the company and of course whistle-blow frances haugen's testimony prompting a further push to regulate facebook, the question is, what other shoes are left to drop guys >> what in the world do they mean by a coordinated group of 30 journalists i have worked with journalists like you and every -- let me tell you that the least coordinatible group of people on earth are journalists. >> i hear you, tyler i had i had the same thought process. it seems they are thinking whoever is controlling the leaked documents, fran res haugen -- another whistle-blow testified just today in the uk before a parliamentary committee. -- whoever is controlling those documents is doling them out and
2:10 pm
making the journalists agree to a certain timetable. i think we will probably learn much more in the coming days and weeks. but facebook certainly seems to be concerned about this. i mean, they haven't come out ahead of any of these articles in the past. they were asked for comment on many of these past exposes so it seems like facebook thinks a lot is coming and thought it best to get out ahead of these issues. >> thank you very much julia boorstin on facebook. coming up, cable stock conundrum, competition heating up, costs rising what's the best way to invest in this sector? a panel will guide us. plus, our trading nation tells us how they are investing around the move higher -- stocks moving higher, simon property, home depot, halliburton, and state restet a new wireless plan for my business, but all my employees need something different.
2:11 pm
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.
2:12 pm
2:13 pm
welcome back cable companies arespending more to gain new subscribers it is taking a toll on returns many are down 6% to 7% including comcast, our parent company. are these companies in a race to the bottom let's bring in two guests.
2:14 pm
both have negative outlooks and recently downgraded the sector, each for their own reason. steven, what's yours welcome? >> thanks for having me. our reasons were fairly simple i think cable has grown broadband subscribers the last many years almost unfettered and they have been a shared grainer from that very slow dsl teleco company that's in your neighbor. and they have put more capital into-second sector, they are building fiber as well as 5g and there are a lot of folks who don't have broadband it is going to make expenditure go up and pricing go down. the businesses are going to come under pressure. >> frank, what was the sudden cat catalyst i think comcast said soft customer ads when the shares were down. what has changed from a area where people were generally bullish to one where they have pretty deep concern?
2:15 pm
>> i think steven and i are rooking at some of the same data there is significant amount of homes that are going to be overbuilt with fiber over the next four or five years. roughly 45 million homes you put that together, it is suddenly not going to be as easy for them to win shares the other thing we think is coming up arechanges in the regulation once the fcc gets five commissioners, we believe they will reinstate title 2 they have never been under regulation you have got companies priced for their ability to continue to grow subscribers unfettered without a whole lot of opposition and also being able to have control over pricing without anybody teping in from the regulatory side and being able to control the rpu they get from each one of the customers if both of those are about the change it is not a recipe for expansion of cable providers. >> i guess my question is, how
2:16 pm
does the federal government, frank, get involved in capping prices for companies that are largely give local franchises to operate? >> this comes in with the title 2 regulation that was put back in the obama administration and then it got reversed in 2017 we believe they would like to put that back in, which is the next step to allowing them to have a lot of control over what they would regulate. we don't think they are going to come in with heavy handed approach and cap pricing across the board but there are a lot o other things they can do mandate a low income program it sounds good, but if you can expand the number of customers paying less than what's averaged in today or if you put in disinventives to invest, we don't think that's a good scenario it is going to be litigated. but there is going to be a
2:17 pm
multiyear over hang. we saw title two the first time. but we think it is going to be more heavy handed. it is a recipe to keep the cable multiples from reaching the recent high. >> frank, explain title two. what do you mean by that >> effectively, the fcc can determine that broadband is a telecommunications service not an information service then they are able to put regulation on it just like they have the phone companies. >> got it. >> that's what they did basically for net neutrality under the guise of trying to have net neutrality before. >> the net neutrality thing rearing its head again i was going the ask, it seems to be on one hand for these companies is that you face more competition than ever. so the 5g versus broadband fight i guess is going to play out over the next decade is this really the time to kind of go after monopolistic practices? what's the problem with the stock? is it fears, the competition that already exists or it thinks
2:18 pm
that more regulation is coming >> i think it's a bit of all of the above. what i would say is that probably frank and i tapped into in our recent ratings change is just this growing wall of worry. it has been sitting in the bask investors' minds, maybe not baked into valuations or ratings. then all of a sudden, it doesn't take much for those fears to go from nascent in the background to top of mind and in the stock prices today the worry is slowing growth and subscribers because of a pull forward from covid next year it is slowing growth in subscribers because of fiber. the year after, more competition. the year after that, eamon musk and satellites the things to be afraid of keep compounding. if those contribute to a race to the bottom on pricing, then, again, it is difficult to see exactly what the returns of a business like that start to look like in the future. >> it seems to me, steven, correct me if i'm wrong here,
2:19 pm
that overall you tend to favor the content providers over the wire companies and so forth. is that a fair characterization of where you stand >> that is to put that in context, i would say it's in some ways because they have sort of been lieu their reckoning. media companies had their meltdown, as you would recall, in august of 2015. the famous disney -- media meltdown it has been a long and hard road for those companies since then. >> so -- i think a lot of the cable sector enjoyed a lack of competition these many years now they have to retool for a bit. >> so my question -- i don't mean to sound defensive or protective of my employer, but comcast is both a provider of in-home services, but it is also a content provider that owns many channels and streaming
2:20 pm
properties as well how do you -- it seems to me that comcast has -- has some defensive padding around it to the thesis that it is going to be regulated like a utility because it has got so much content generation and content distribution. >> yeah, it -- >> it does have a head but it still has sensitive to subscribers. >> say that again, frank is this i'm sorry. >> the majority of the revenue still comes from cable side. we just see the stock being sensitive to changes in subscriber adds. >> gentlemen, thank you. steven indicate haul, and frank lampton. still ahead w the bitcoin futures etf on the way the cryptocurrency has been marching to new highs, trading at levels since seen hins april. we will discuss what's going on when "power lunch" returns so to accelerate growth,
2:21 pm
should all our it move to the cloud? well, it isn't right for everything. the cloud would give us more flexibility, but we lose control. should we stay, should we go? ♪ ♪ ♪ darling you got to let me know, ♪ ♪ should i stay or should i go? ♪ we have tons of data at the edge, but we have to act on it in real time. ♪ if i go there will be trouble ♪ and we need business insights across all our data silos, but how? ♪ so come on and let me know, ♪ ♪ should i stay or should i go now? ♪ ♪ should i stay or should i ♪ wait, we can stay and go. hpe greenlake is the platform that brings the cloud to us. and it'll accelerate our... our digital transformation? absolutely. ♪ should i stay or should i go now? ♪ ♪ ♪ ♪
2:22 pm
feel stuck and need a loan? ♪ move to a sofi personal loan. earn $10 just for viewing your rate — and feel what it's like to get your money right. wealth is your first big investment. earn $10 just for viewing your rate — worth is a partner to help share the load. wealth is saving a little extra. worth is knowing it's never too late to start - or too early. ♪ ♪ wealth helps you retire. worth is knowing why. ♪ ♪ principal. for all it's worth.
2:23 pm
i'm kristina partsinevelos here is your cnbc news update at this hour. the supreme court wants texas to respond by thursday to the biden
2:24 pm
administration's request to temporarily block the texas law banning most abortions the white house isasking for a stay of the texas law while the fight over its constitutionality plays out in the courts. the department of homeland security is creating a new intelligence unit that will track the movement of large migrant groups the goal is to prevent a recurrence of surges like the one last month when thousands of haitian refugees sought to enter the united states from mexico. disney is delaying the release of a slew of upcoming movies the fifth indiana jones movie is getting pushed back nearly a year to june 2023. sequels of "black panther," dr. sprang, thor, ant man and the wasp are also being delayed by several months. kayak says it is seeing a spike in people searching for trips to the united states since travel restrictions were loosened the website sats searches shot up 48% on saturday versus the
2:25 pm
week ago levels that we saw. so lots of tourists coming back here. >> that's good news for all the hotels good news for new york city. chris teama partsinevelos thank you. let's give you a market check. the dow is fundamentally flat, down 73 points at 35,221 but the s&p and the nasdaq are marginally higher. nasdaq by about two thirds of 1% here are some of the movers we are watching right now first up is stitch fix on pace for it's fourth state monthly declient, longest such decline on record. down more than 40% for the year. 43, almost 44% albertsons in the green following a big earnings beat. sales crushing expectations. it raised its outlook and dividend there it is up to 2994 finally, u.s. steel down more than 2%, morgan stanley downgrading it to underweight calling this environment post peak down 2%. jim cramer weighing in on both
2:26 pm
those names on his investing club newsletter. sign up for jim's investing club at the website or point your phone at the qr code on the screen and it will take you there. after the break, everybody, we will take you live to the milking global conference institute. we will sit down with scott keough talking about cars, chip shortages, the future the ev, a musk appearance. why macy's has more than doubled this year. it is up -- look at that, almost 150% we'll be right back.
2:27 pm
today, your customers want it all. you have to deal with higher expectations and you have to lower wait times. with ibm, you can do both. your business can unify apps and data across your clouds. so you can address supply chain issues in real time, before they impact your bottom line. predicting and managing operational issues that's why so many businesses work with ibm.
2:28 pm
2:29 pm
the oil market is closing for the day. pippa stevens is covering it at the commodity desk >> a big reversal for oil today.
2:30 pm
trading started out strong, wti for november delivery jumping to a seven year high of $83.87 while brent broke above $86 for the first time in three years. but crude drifted off those levels throughout the session. we had the disappointing gdp numbers out of china as well as u.s. industrial production numbers that came in below expectations wti finishing the day at $82.44, for a gain of a fifth of the one percent. crude is down .7% at $84.29. we heard from chevron's ceo this morning who told david faber this strength in oil comes at a time of year when prices typically soften while he wouldn't give a price outlook for wti, he said this indicate as fair amount of support in the market right now. >> pippa, thank you. higher commodity costs one of the many head winds impacting the ool industry the chip shortage of course cutting into production worldwide. it is down 30% from its string
2:31 pm
highs in the u.s electric vehicle rate is heating up for more on the state of play, let's get to los angeles and scott keough, ceo of volkswagen of america >> kelly, thank you. scott, thank you very much let's jump in. is the semiconductor shortage issue or parts shortage issue getting any better >> two things you have to look at, brian. first and foremost, it is still going to go. i would say we will be in a good state by the middle of 2022 when you can say this is exactly what we want. it is going to be a challenge the next six to eight months we are seeing an kprochlt in the fourth quarter we used to have a 100 day supply of cars very slow turn rates, not great margins, high incentives what it has done for margin
2:32 pm
quality, dealers are turning their inventory almost every 30 days margins are better i think it is helping the industry structurally. >> maybe good news from a -- we always call it a problem you are saying it actually may have solved the problem of too much inventory. >> 100%. i think that's what we are seeing i think, actually, the behavior at the dealership, where they are focused on turn rates, focused on less envinner to, focus on margin retention is a good thing structurally for the industry don't get me wrong, we are competitive car people, we would like to have more cars and be selling them, of course. >> let's talk about electric cars couple months ago i drove from vegas to san francisco, recorded it all, wrote about it i found the charging speed to be wildly frustratingly different you have a buyer who comes into a vw showroom in virginia where you are based. >> yeah. >> they are looking at maybe the id 4 or they are looking at the
2:33 pm
pass at because they have had the pass at. what is the buyer buying now what are their concerns around evs? >> a couple thing. i would tell the customer the buy the passate and the id 4 since they are if the showroom i think what we did with the id 4 was exactly right. we wanted to address the price point. you are not going to get adoption without the right price point. you add in the government roberts it is a $32,000 car. we wanted to reduce as many hurgedss as possible i am with you. i don't think the charging environment is perfect but, look, we are doubling the network. we are expanding the size of the network. we have basically fast charging at the entire network, which is good if i look at the id 4s on the road we have charged nearly 12 million miles. something is happening they are using these cars, they are getting out there. so it's cool >> you know, scott, tyler mathisen here, if i might ask
2:34 pm
you, one of the reasons margins are so good -- and i tttotally agree with you, is there is a scarcity of models on the lots two questions. one, are dealers telling you, boy, we would love to sell but we have got nothing to sell? in other words, there aren't -- there isn't enough inventory of the in-demand suvs for example, to sell? and second, what are you telling dealers who are pricing cars way, way, way above the dealer manufacture -- smsr -- manufacturer's suggested list price -- asking four, five, six thousand above list. that feels to a consumer like a dealer taking advantage of a short-term situation on the other hand it is supply and demand >> look, i think on your first point of course we want more cars and of course we like to have them we like to take advantage of the marketplace. that's why we are fighting each and every day to get chips
2:35 pm
we have massive meetings every two weeks to globally allocate the chips. then we locate them and allocate them to our cars and get them into the dealership. look, our sales are up 26% we have done a decent job of navigating the crisis so far the point that you make, look, as a manufacturer, the msrp is there, as you know, but i keep telling dealers, do you want to sell a car once or do you want to take care of a customer for a lifetime i think you are right, nonsense, madness to be going over msrp and our dealers for the most part are doing the right thing that what i see day in and day out across the board. >> it is kelly, if i could pick up on that very question, elon musk himself apparently at december's invitation dialed into a massive meeting of volkswagen managers and explained that part of the reason tesla was able to avoid this issue was because they could rewrite software for chips that were out of production. in a couple of weeks we know that the legacy chips, the older chips they are using are going
2:36 pm
away where does volkswagen stand? how would you compare the ice cars versus the evs coming in that regard? >> i had the pleasure of being at that meeting in austria i was there. now i am in los angeles at mill ken. elon had interesting things to say. where do we stand on this? we are in between. he might be quicker with regard to reprogramming the firmware in terms of using the chips that are available. but we have done a lot of similar things if you look at steering gears, how they have been able to move them from a passate into jetta, how we have modified a jetta and a tiguan we have been doing it on a daily basis to keep production rolling and maximizing the chips. also we have taken out some features and equipment because we would rather get the car on the road. in terms of championships and ice, we are putting an chute
2:37 pm
absolute priority on the electric weeks we want the make sure we are getting the chips, get them on the road and execute our plan. we are focusing on those versus some of the internal combustion engines. >> what is the government's bill in building out the charging network? it is in the infrastructure plan, $7.5 billion for adding charging stations i don't see a shortage of charting stations. i see a shortage of electric cars, empty stations what have you been the government's role versus the private capital markets? >> two, one, without a doubt, i think more charging networks are necessary and will be necessary. i think their number is 50,000 chargers we support that. i think the second one, without a doubt, incentives will be needed on the retail pouring of the car. it is $7500 snooshs keep the incentive. >> 100%. i think we need a longer run way to get acceptance and hit the price points what is happening, we are
2:38 pm
getting battery costs down each and every day, getting competitive each and every day but i think that's needed. the government has jumped in on industries to make sure we can take off and be successful that's needed. those two things and we are going to go to town. i can see the electric market taking off it needs this government nurturing. >> scott keough, from austria to los angeles, beverly hills, we appreciate you sitting down with us to discuss these issues. >> thanks to scott and brian both for the interview a programming note, brian sullivan will be back with two power players from mill ken tomorrow on "power lunch." coming up, bitcoin in the spotlight. it has been a long wrong from bitcoin's initial explosion to its implosion, and back again. what will the arrival of the
2:39 pm
first bitcoin futures etf mean for its future we will discuss that next. growing up in a little red house, on the edge of a forest in norway, there were three things my family encouraged: kindness, honesty and hard work. over time, i've come to add a fourth: be curious. be curious about the world around us, and then go. go with an open heart, and you will find inspiration anew. viking. exploring the world in comfort.
2:40 pm
2:41 pm
welcome back look at bitcoin, bouncing above
2:42 pm
$62,000 today, just above that level right now, getting close to the all time high of 64,800 from the spring. one big driver hopes for a bitcoin etf. we are getting the futures etf tomorrow kate rooney joins us with the latest >> etf excitement is the crypto headline tonight it's seen as an legitimatizing moment for the investing class and could bolster a new line of investors. futures contracts on the cme will debut tomorrow. ticker b-i-t-o there are several others waiting this the wings for applications for similar futures etfs which could debut by the end of the year the etf excitement has been a big part of the sentiment turnaround we started seeing october. it is also due to fewer negative
2:43 pm
regulatory headlines things seem to be better on the regulatory front as well bitcoin is only about 4% off its all-time high. some argue this good etf news may be appliesed in, and they warn against a buy the rumor sell the news moment we have seen that in crypto often. but others are saying this is not enough, they are lobbying for a bitcoin spot etf tom lee said that etf still has plenty of upside when it comes to prices. fundstrat calling for a $148,000 price target they didn't give a time line for that, but they say, in our view, the price of bitcoin will continue to rise well after actual approval of the etf the firm points to demand for other etfs they use invesco's qqq for example. funds strat saying it will drive higher prices due to network
2:44 pm
effects, as they put it. this is a futures product not a spot bitcoin product >> it is a debate about which is the superior, or why each one might be attractive to different kinds of investors it is going to be interesting because they are all coming to the table more or less at the same time. pro shares might beat the others by a couple of days. but i wonder what's going to be the one that gets that mass. in every industry there is the one main etf usually it is the first mover. in this case it is going to be hard i don't know if they can differentiate on performance, if anyone can add kickers there, whether it is going to have to do with fees >> that's a great opponent i think fees is definitely one thing people are focussed on will fees go down? will you see a price war break out here first mover is big but if you only have a one or two-day advantage, there is others coming up eight for approval in the next couple of week.
2:45 pm
it is not big advantage. the other is spot bitcoin. gray scale could convert into ai spot bitcoin etf would people want that or opt for the future bitcoin etf there is going to be that option in the future. for a different perspective, how have you investors choose where to put their money into a future's etf or into bitcoin itself let's bring in jody gunsberg good to have you with us if i am reit reading my notes directly, you think this new ticker symbol bito could bite you in the boom, frankly, because of a variety of thing. investors need to understand, one is how futures expire and roll over. two is the fees, and three is the concept of contango, which if you don't understand it, i think you ought to explain it. because i don't understand it. so explain it.
2:46 pm
>> thanks for asking that. i actually think that a futures based bitcoin etf is really bad for investors. as you pointed out, many think they are going to get bitcoin, but they are not and the problem is that they are getting these futures, which are contracts that expire. so to stay invested the investors need to sell the expiring contracts for later dated ones if they think the price of bitcoin is expected to rise in the future then the later dated contracts are more expensive than the near by ones. when investors go to sell the cheaper expiring contracts for the more expensive ones, they lose money. >> so that's obviously exactly the opposite what have you want to do. you want to buy low and sell high, not sell low and buy high. so you think these products are fatally flawed from the point of view of the individual investor? >> i do feel like it's fatally
2:47 pm
flawed and especially for bitcoin, which you can hold the spot asset. it is not like oil or livestock or something that's really difficult or impossible or illegal to hold. it's more like gold that's pretty cheap and easy to store it's -- bitcoin, you can easily get the spot asset and unfortunately, the cost for bitcoin futures is more like oil. that's really expensive. so it makes no sense at all. >> you say that contango is something that people need to watch out for. is that that rollover effect or is that something completely different? >> it is contango is just a description of the up shaft futures curve where the nearby contracts are priced lower than the later dated ones. >> got night in general, for something like commodities that
2:48 pm
incorporate a storage cost and a convenience yield, the price is reflecting a future expectation of spot price. >> when we spoke with bob pisani last hour, he said the regulator's argument would be they really can't allow for to bitcoin etf itself because they might run into the issues of do you own it the keys et cetera. even normal individual owners have a hard time grappling with all of that. do they have a point >> i think that they have a learning curve i do believe that the approval of any bitcoin based etf, even if it's futures, is opening the door for more products and i think more products are a good thing i just feel like many investors may not understand what's inside of their products. so when they buy something like a futures based bitcoin etf and bitcoin is going sprint cup they are losing money in their etf, they are not going to know why. >> yeah. very interesting, jody i'm sure this segment is going
2:49 pm
to create some controversy check your twitter put on your armor, your body armor, and we'll certainly probably hear from the other side on this, probably even tomorrow jody, thank you very much. we appreciate your perspectives. >> thank you. coming up, copper is up 7% over the past week what does it say about the global economy good old dr. copper, our trading nation team discusses that nt.ex e 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. in 2016, i was working at the amazon warehouse
2:50 pm
when my brother passed away. and a couple of years later, my mother passed away. after taking care of them, i knew that i really wanted to become a nurse. amazon helped me with training and tuition. today, i'm a medical assistant and i'm studying to become a registered nurse. in filipino: you'll always be in my heart.
2:51 pm
2:52 pm
welcome back to "power lunch" why copper reversing lower this afternoon and coming off the highest levels since may. today the metal up 11% in the past month whats it telling us about global activity we asked ari and katie welcome to you both. katie, what do you see in the charts >> it's a big breakout on the charts copper had been wound up in a triangle formation for months and within a context of a long-term uptrend but we have a breakout these are very high probability
2:53 pm
patterns we can arrive at a targeted level of $5.37 from the breakout and typically while we can't really be sure what it means for the global economy when you see copper prices rallying it tends to be associated with a stronger tape for the stronger indices with a comparison of copper versus s&p 500 and bullish more for the market than the economy. >> we call it the doctor because it has a phd and picks up macro changes and seems to be bullish. what are your thoughts >> we agree with that. we see the price of copper which is testing the year 2011 peak as a sign of strong economic deman and it is consistent with our view that this is a mid cycle bull market likely to continue and expect a stable dollar to limit runaway commodity prices
2:54 pm
still as we like the metals in mining in spite as a hedge against rising consumer prices and as a source of beta in this bull market. if you look at the tracking spdr ticker xme building a platform above the rising 200-day moving average. we think positioned for a new breakout over the june peak. >> all right some thoughts there on copper and the xme and the markets. thank you so much. for more head to the website or follow along on twitter. ty >> thank you. we'll explain the real deal behind a massive climb recently. we'll be back in two. >> and now the latest from trading and a word from our sponsor.
2:55 pm
2:56 pm
- [announcer] at southern new hampshire university, we never stop celebrating our students. from day one to graduation to your dream job, that's why we're keeping your tuition low for the 10th year in a row. - [student] the affordability and the quality of education, it can be enough to change your life. - [announcer] as a nonprofit university, we believe in making college more affordable for everyone. - southern new hampshire university, it was just amazing experience. - [announcer] find your degree at
2:57 pm
- [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. welcome back macy's shares are soaring today trading at the highest levels in
2:58 pm
nearly three years >> i always think soaring is an understatement because shares up 17% at the moment and this is the highest level like you mentioned since january 2019 following the news that jana partners pushed for a spinoff of the e-commerce business drawing interest since the news broke the stock up almost 25%. the move would echo a similar move and this we have heard about. sources telling our own leslie pigge picker that aims to go public in the first half of 2022 sak's business valued at $2 billion in march which is about two times revenue but an ipo could see a higher valuation just another indication of the growing porps of e-commerce for
2:59 pm
traditional retail but the big question is all of the evaluations right now. valuations i should say. >> i don't get it. if the point is to have a successful e-commerce brand to grow and then the [s and mortar piece why would you -- >> spin it off >> what is flagship macy's left with >> excellent question. when they said the value is the real estate and rejected that. this is digital sale just the ceo predicted to hit $10 billion in 3 years could this really create the value for the company? tyler? >> no. i'm thinking about the long-term sort of existential play here. >> of macy's specifically? >> yeah, yeah. whether they have enough of the stuff to hang in there i think they probably do.
3:00 pm
>> bloomingdale's under that umbrella you had mentioned a statistic in the commercial to do quite well. >> for clothing, certain categories, the website has done very well. >> i grew up going with my mother to department stores and still like them to get everything there in washington, d.c long doing. >> lord & taylor with my grandmother. thank you for watching "power lunch. "closing bell" starts right now. hello and welcome to "closing bell. i'm sara eisen a mid-morning dip. the nasdaq and dow firmly in the green and disney weighing on the dow. >> i'm wilfred frost today a weaker than expected gdp print from chin. with growth of just 4.9% in the third quarter. but in the u.s. home builder sentiment topped


info Stream Only

Uploaded by TV Archive on