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tv   Closing Bell  CNBC  October 19, 2021 3:00pm-5:00pm EDT

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with mr. kirby tomorrow morning. thank you. >> you bet. >> he's gone he was there he was there all along all right. thank you for being here. >> it is fun working lunch. >> thank you for watching "power lunch. "closing bell" starts in a few seconds. see you tomorrow it certainly does. welcome to "closing bell." i'm wilfred frost at the new york stock exchange. upbeat earnings setting an optimistic tone today. the averages higher. the nasdaq holding up firm despite a rise in yields. >> i'm sara eisen. welcome. let's look at what's driving the action it's all about components. j&j higher p&g is weighing on the index bitcoin is approaching record levels again as the first bitcoin futures etf begins to trading. walmart is popping after goldman sachs added the stock to the
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conviction buy list. 59 minutes left to go in the session. >> the ceos of philip morris and steel dynamics and chairman of int interactive brokers join us. we have a big afternoon of results including the much anticipated print from netflix first faang name to report and the first report from them since "squid game." >> "squid game" which is key we'll break in with breaking news from the fed. steve? >> fed governor making a somewhat hawkish speech today coming at 3:00 saying the fed should respond aggressively if high inflation continues for the rest of the year progress is made on inflation and the employment goals therefore he favors tapering following the november meeting he thinks inflation is going to
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prove to be transitory and said he's concerned about inflation and expectations becoming unanchored and doesn't expect rate hikes to immediately follow completion of the taper and expects to end middle of 22 but would favor earlier rate hikes if it becomes unanchored and growth will pick up and the recent slowdown will be temporary and expects healthy job gains through the end of the year. >> how significant is this big chang or slight shift? >> we have to watch it waller is the newest governor from i do know that the things he is echoing are being said by certain bank presidents and don't know how much that's on the board of governors seems to be a hawkish member. >> let's get to the other big
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stories. mike is tracking the action. sara with details on p&g and the news out of washington on irs reporting requirements let's start with you the broader markets off the highs but another encouraging session. >> the sort of upward drift or the grind higher we got used to in august resembles today. putting distance between the lows two weeks and one day ago, that's a good run. as a matter of fact it might be the kind where you see it take a break. within 1% of the all-time highs. very much a growth centric story today. pulling the s&p higher and the nasdaq outperforming slightly. that equation worked in the past we have to see if the market is bashful on the way up to the highs the first attempt.
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talking about the bitcoin futures exchange traded product to trade today look back to where we got a crude oil futures based exchange traded fund. uso launched in 2006 this is the year before and the year after that. not the uso its but what happened to oil. vertical move. worked higher. here's the absolute level. and then it did have a correction seems like there's a concentration of retail interest at this point in the fund and then maybe a short term high and went on to higher prices thereafter so not les a major multi-year peak. this is the gold trust it is physical gold owned here gold prices much lower but again
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a steep run higher and gave it back not to say to see a similar pattern with bitcoin but not surprising to see this area. people have new access to a different type of vehicle and then maybe the market gets to a short term peak of enthusiasm. >> gold can only dream of a chart like that these days i guess. the burden of proof in the hands of the bears and bulls and shifted significantly, a lot of evidence to be presented including today at 4:00 p.m. coming to earnings reports. >> yes you're seeing both sides of it today. j&j look pretty good p&g, decent quarter. managing to beat and see the cross pressure yes, always have a push/pull earnings will be fine and beat by a comfortable margin.
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have we been priced for it credit isn't disturbed treasury yields holding at these levels without making any part of the market uneasy all those things seem like again it's rebound bound for the market. >> thank you so much we are up two thirds of 1% on the s&p. p&g reporting earlier weighing on the dow sara has the key takeaways from us. >> expect to pay more for the tooth poaste and razors. strong sales, 4% organic revenue growth double what was expected saw growth from baby to home care to grooming and warning the transportation and commodities costs will add a $2.3 billion head wind to earnings this year and led to a decline in p&g profit margin this quarter compared to last year.
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on the plus side didn't change guidance overall using cost cuts and raising prices on products most affected by the higher cost to offset it inflation, certainly biting. strong growth. the new cfo on the call saying as we come out of covid he sees the consumer prioritizing pandemic era habits like home, health, cleanliness and spending more time at home and they continue to gravitate toward bigger brands from the private label and helps sales. analysts stick with the story but investors are selling today. rbc said shares feel pressure today but as more companies begin to report the results will look superior verse the peer group. jp more began said they deserve credit for maintaining the outlook despite the expectation for cost pressures than what was
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initially proposed we think management is being conservative on the top line but the multiple is historically high for the stock and staples aren't in vogue right now especially with the cost pressures weighing on profits and rising interest rates making dividend payers less attractive. looking at the biggest competitors in the space, clorox, kimberly-clark, if p&g is feeling it and taking a hit likely the rest will, as well. >> could have been labeled sara's companies. >> a small group of my companies. >> but no. listen down 1.5% and weighing on the staples sector let's pivot now and turn to washington where we get the news about proposal from senate democrats surrounding irs
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reporting requirements ylan has that story. >> reporter: after facing some huge blowback from the banking industry democrats are raising the threshold for when your bank account information needs to be reported to the irs. the regional plan covered accounts as little as $600 and now senators are announcing that threshold is increasing to $10,000. senator widen will say tax cheats thrive when the reporting rules are loose and murky and want to crack down on cheating at the top the gop is calling this an irs dragnet to sweep up everybody. >> scope of the irs ability to dive into the accounts will be the biggest violation of individual privacy i think this condition has ever seen. >> reporter: remember, these rules are part of the broader social spending package and
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hoping to pay for everything else they want to do >> yep costing a lot of money thank you. after the break, one unexpected impact of the chip shortage the ceo of philip morris to explain how even his company is caught up in the semi squeeze. dow's up 165 points. near session highs of up 200
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♪ ♪
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you've never seen anything quite like it. we've never created anything quite like it. the all-electric, all-mercedes eqs. (rhythmic electro rock music) (crowd cheering) - bito, bito, bito, bito! - [announcer] bito, the first u.s. bitcoin-linked etf.
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shares of philip morris
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lower today. beating expectations but did warn the global chip shortage will weigh on sales growth which is where all the growth is i caulk talked to the ceo about the results and how to navigate the supply chain issues. >> for the results would have been better if not this issues which we have around the supply chain. you know, the semiconductor shortages, et cetera i think the wings could have been spread broader without the issues on the supply chain we'll see towards the end of the year what will happen at the beginning of the next year but i'm optimistic about the bright future. >> it's interesting. you don't typically think of tobacco companies affected by
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the chip shortage. explain how that works and how severe it is impacting you. >> we cannot really conduct the full commercial priorities and we focus on retention of smokers who have swifed. it's a highest con vefrgs rate above 50% in a way that the smokers don't go back to cigarettes it's very important that they have a continuity of the supply of devices or put them in an uncomfortable situation. for -- this is a device with an electronics. there's issue of battery safety and paid a lot of attention that it is as safe and it is and a wonderful experience to smokers
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and switch to iqos we also five or so years ago didn't think so much dependent on electronics but here it is. the electronics serves very well the smokers. >> what are you hearing from the chip suppliers about how long it will last? >> i wish i could hear more because we live in the time you don't hear much because of the visibility of the supply chain is shortened so much these days. a lot of operation with visibility of the two, three plus months and operating a business with a visibility measured in weeks if you are lucky. so we are not the only industry. as you said maybe not the obvious industry but not the only industry being impacted by this but i do believe that we will assure a continuity of supply.
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>> how do you combat that decision to get iqos on the shelves in the u.s. and when do they come off the shelves? >> i mean, at the present review period ends in the end of november end of october, sorry. i hope that we will receive the positive voice if you like or the positive outcomes from that administration we are also working on the contingency plans. for example, a plan is how to make locally in the u.s. obviously requires a lead time. >> are there health concerns of the products, the heat not burn products >> we're monitoring closely in the markets. if there are adverse affects and the data points collectively the
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markets are submitted or reported on a regular basis to the fda. the fda doesn't necessarily -- jurisdictions over international but we believe that the fda should know about what is happening with the products and there is nothing really happening. it is seven years in the market place and positive we start obviousing a positive changes at the populations at large. >> it really is all about iqos this is the heat not burn tobacco product that they are just marketing as healthier and people that switch from cigarettes to this will be better off and framing it as a public health issue and the damage from smoking coming from inhaling the toxic smoke there will probably be more studies out and the jury is out on how safe it is but it's the
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growth story they want more than 50% sales of this instead of traditional cigarettes by mid decade and said they're on track. >> positive if it shifts people from smoking and the debate across the industry and not just them is attracting people that wouldn't have otherwise smoked and the tar aspect and the nicotine aspect remains. >> correct. >> very interesting stuff there. affected by the chip shortage. a move in the pharma space which stock is down more than 60% on the trial results ♪ ♪
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welcome back under the radar pharma stock is plumm plummeting after the covid treatment came up short in a trial. meg? >> the company is atea pharmaceuticals and it partnered on an anti-viral drug similar to
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merck's drug but in a phase two trial today it missed the primary goal and you can see atea down 65% losing $2 billion in market cap on the new and trying to see if this drug could reduce the virus in patients that got the drug versus placebo and didn't see an overall reduction but they said they did in the high risk patients. most of the people in the study young, healthy foxes and even though they had covid they were at low risk and enrolled vaccinated people and merck only enrolled unvaccinated people there's trial differences but they say they're not going to see results from the phase three trial until the second half of 2022 trying to redesign that study. you can see that merck up almost
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3% as essentially analysts say the market is clear and pfizer's anti-viral is expected to have data within the next few months. atea going back to the drawing board on that big trial and results will be delayed. guys >> also wanted to ask you about johnson & johnson out with earnings before the bell this morning. stock up 2% why what were the key highlights >> yeah. it was a beat for earnings slight miss for revenue. what's interesting is especially the medical devices business to tell you about the health of the hospital system out there because so much of the business is driven by procedures and surgeries. we talked with the cfo about what that looks like this morning. here's what he said. >> we experienced in fluctuations in procedures with the delta variant and served to reduce volume in the third quarter with respect to elective
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procedures we see them coming back fourth quarter or early next year and feel good about the results to deliver on the top line. >> of course we asked him about the news for booster shots for j&j and expecting a fda decision on that really any time and on thursday in the cdc meeting and said they think the two-dose approach is best coming to boosters and waiting to see if people mix and match guys >> that's the question sus isn't the data showing to get a j&j vaccine and then an mrna with merck and pfizer vaccine and then have all the antibodies >> some ark that antibodies are not the key thing and perhaps real protection from the t-cells
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not looked at in that nih study but doctors say if you have a j&j shot get an mrna shot on top of it. we have to see what they recommend on thursday. >> thank you still ahead, subscribers and "squid game. netflix gearing up for earnings after the bell those two topics top of mind for investors. we'll preview the release. don't miss the interview with chairman thomas peterffy later this afternoon heading to break a quick check for you on bonds yields are moving higher again today. up to $1.63 on the 10-year 1.64 here we go dow'up62s 1
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welcome back let's check market movers. comcast announcing today the launch of the x-class tv available direct to consumers in the u.s. without a xfinity subscription in a comcast service area or not. the technology will integrate. the tvs will be available this week at select walmart stores. comcast trading up today this comes following the launch of sky glass a few weeks ago a big interesting difference between the two is in the u.s. these are manufactured and sky
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glass manufactured by sky in europe so slight difference of the manufacture. the same technology driving them internally and the slight difference is an attempt to expand beyond the reach with the cable products. >> and the value proposition for customers. >> peacock premium free for 12 months and comcast is the parent company of nbc and cnbc. evercore isi downgrading marriott based on the valuation. that stock is down 2.8%. jim cramer wrote about marriott today saying it is a best in breed and don't downgrade a best in breed to learnmore about the stock and jim's picks sign up for the investing club. >> hold the phone up to the qr
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code on the screen and take you right there. it's sort of reminds me of "lost. >> when the plane crashed? >> the simple. people that watch know what i'm talking about. >> jim will avoid a plane crash. >> a qr code. >> doesn't work. >> just watch it from the beginning. epic time now for a news update with tyler mathson. >> i will have the qr code put here on my forehead. thank you. at this hour, agreeing to pay nearly $475 million by credit suisse with offerings of bond and debt from mozambique the s.e.c. said they gave investors misleading information. once upon a time new york's manhattan correctional center was hailed as a prototype for federal jails with headline
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criminals of bernie madoff, john gotti. now it is empty. the last of the prisoners transferred out so that major repyres can begin and the justice department said the jail may never reopen. the sixers suspended the controversial all-star guard ben simmons. sitting out the open seasoner after being kicked out of practice yesterday he requested a trade after they lost in the second round of last year's playoffs. he was kicked out of practice because he refused to take part in a defensive drill back to you. >> i'll pick it up there thank you so much. we look forward to the next news update with the qr code on the
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forehead. >> from "lost. >> right still going on about that one. we have 27 minutes left of trade and higher on the dow. up next talking to the ceo of steel dynamics about the company's earnings beat a ten three sectors that saw strong c constriction and then netflix and the qu ge"fft "sidam eecis coming up. power e*trade gives you an award-winning mobile app with powerful, easy-to-use tools, and interactive charts to give you an edge, 24/7 support when you need it the most. plus, zero-dollar commissions for online u.s. listed stocks. [ding] get e*trade and start trading today. never settle with power e*trade. it has powerful, easy-to-use tools
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we all have the strength to see what's possible. it's up to us to unlock it. tonal. be your strongest. shares of steel dynamics in the screen today after the company released the q3 earnings last night beating analyst expectations saying demand is solid and expects it to be that
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way into q4 and next year. joining us is steel dynamics ceo mark millet. good to see you. >> good afternoon. thank you for having me. >> so let's touch on the pricing that we're seeing at the moment. mentioned there that demand is expected to hold up. can pricing remain quite as lofty as it has been >> i think it may turn over a little as we get into the first quarter but i think it's absolutely solid through the rest of the year here. supply and demand balance is very, very tight demand is absolutely incredible to be honest through almost every sector we are in nonresidential strong driven by warehouse, retail. change in retail buying from the consumer driving the amazon type buildings and then also cloud computing is driving warehouse
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space dramatically and seeing backlogs at least by ten months out. talking to the builders they have problems with the labor and all that's doing is delaying projects and extend the construction cycle automotive is still strong suffering from the chip shortage but nonetheless, the good news is you lost about 4.5 million units during covid there's massive pent up demand there and talking to the dealers throughout the supply chain, they just can't get enough inventory to sell and got to extend the cycle, too. so it's good manufacturing is strong. energy is recovering deman demand space is very, very good. >> you don't feel that this could taper off as early q4 if
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the post-pandemic bounce abates? you think there's a lasting backlog? >> i think it will turn over a little in the first quarter. the lead times are shrinking, catching up. just part of the shock wave that we have seen from covid so the mills are catching up. inventories are starting to rebuild from historic lows imports are inching up a little. you don't see a surge in imports that would be the major driver of material change in pricing so a little turnover and high, healthy environment for us going forward. >> do you expect any change to the 232 tariffs? 25% on steel and aluminum put in place by the trump administration friendlier vibe with the biden
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administration and europe. what do you think happens? >> there are negotiations right now. we anticipate there will be some quota mechanism in place there to stop a surge of imports the country is generally steel short. we don't need a surge of imports why when they renegotiate that there's safeguards there i don't think we'll have a problem for the rest of the world there's constructive dialogue by the biden administration they recognize that there's colossal overcapacity driven by china prins play and other asian countrys that are export economies and recognize the problem. we have a great time right now in our business. but the underlying drives of global overcapacity are still
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there athan recognize that. >> do you find it had to find labor? >> not really. we are blessed through our profitability, through the incentive driven compensation schemes, the steel operators excludeing management last year earned about $105,000. the pay levels are higher than most companies and we tend to draw folks in without too much of a problem right now >> great to check in with you. thank you for joining us. >> fantastic thank you for having me. take care. when come become, the key metric when netflix reports after the bell s&p up .6%
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get e*trade [ding] and start trading today. ♪ we have 15 minutes left in the trading day. we are in the "closing bell" market zone commercial coverage of the action going into the close. mike santoli here to break down the crucial moments of the trading day and chief investment strategist amariso with us the dow and s&p are now trading within 1% from the all-time high oak tree capital with a positive note on the economy joining cnbc earlier today. >> i'm bullish on the economy. i think that stocks won't crap
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out as long as we have economic growth. >> that's a technical term. >> yeah. exactly. not going to repeat it but he can get away with it because his foirm manages $143 billion it's now searching for something to derail the positive momentum. >> potentially he's talking in broad terms usually. as the economy expands that's the key driver of the direction stocks move and not the speed. the earnings tracking in the right direction and worth asking whether we completed a real reset of this market i think we got the seasonal shakeout and right now burning up the skepticism that built up through september and into october and see if we get something far from there but i agree that given the fact we didn't see any real cracks open
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up in terms of beyond what really is going on in equities and it seems as if you have a reacceleration and not a continuing slowdown in the underlying economy to give the market a ben if the of the doubt. >> anastasia, does that line up with your views? >> i think it does mike pointed out correctly that we are in a stronger period of seasonality. that's working to the advantage and the second big thing is earnings season and last week is good with stronger than expected bank rulgts and this test week is the test and the answer is they can we now got the blended s&p 500 earnings growth for q3 which is running at 30% and by the way companies are managing to predict the margins. that was the big question mark heading into the week between container ships and costs and
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bottlenecks and supply shortages. can companies work through that and so far for more companies than not the answer is yes and as a result looking at third highest on record margins since 2008 and supports the sentiment. they're raising wages and so this is a pretty virtuous cycle right there. >> two big box retailers moving in difference directions after a call from goldman sachs replacing target on the conviction buy list with walmart. after several years of investing in the supply chain and like it is grocery business which is anticipates to continue to gain market share from competitors. goldman cites the run-up in target stock to remove it from the con vis buy list target is up 100% since being
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added to that list they benefit from similar type of factors but the e-commerce point distinguishes walmart. >> it does not an either/or call but the top ideas tactically seems as if it tilts more toward walmart just because of the idea that they can now be in har voes mode from the investments target is the cheaper stock, traded at a good discount to where it's been for the rest of -- the past few years and can make the argument both fit the profile of those that can really handle if anyone in supply chain with the lo gistics. >> your take on the names in this space sta >> somebody with scale like walmart is best positioned against the supply chain issues. i am concerned about consumer
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staples because they tend to have low margins and they have to have high sensitivity to higher wages for the lower end wage gainers so i think that margins could be potentially squeezed here and not to mention the supply issues. having said that one thing to watch closely i think we might be approaching kind of peak shortages and peak supply chain issues and shipping costs dropping and truck driver employment is picking up and maybe those shortages abate and then the factories are potentially starting to reopen in southeast asia hopefully in the next few months and i think the bottlenecks could be alleviated and concerned about thin margins. >> bitcoin hitting the highest level since mid-april. kate rooney has those details. >> that's right. bitcoin right around the
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all-time high after the day bus of the first bitcoin linked etf. proshares strategy etf tracks the futures rather than the cryptocurrency itself and shares rose 4% on the first day of trading. this was really seen as a milestone and a stamp of approval for the industry. gary gensler on "squawk on the street" earlier saying that bitcoin has been regulated for four years. >> we have some ability to bring it inside investor protection. it is a highly speculative asset class and listeners should understand underneath this is a same aspect of volatility and speculation. >> others in the industry say, yes, this is a win and holding out for an etf to track physical bitcoin. today grayscale's bitcoin trust
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applied to convert that fund to an it of guys >> thank you for that. mike, you mentioned the reaction earlier. reminded of tesla coming into the s&p 500 last year and spiked for a couple more days afterwards and then -- >> no. it actually -- sold off immediately and went off to the moon into january. so there's obviously -- i think the hyper focus on it, flows are what matter for bitcoin and not really about spreading in terms of utility it is an asset i think that basically gensler clearly is squeamish about the space. doesn't really love the idea of normalizing or mainstreaming the physical ownership. >> they green lit the etf. >> based on the futures. so they're doing these kind of half steps
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i think that leaves with a takeaway and the bull case not trying to kill it and hard to kill is line one and just about crowd psychology. >> buy bitcoin buy the etf? which tracks the futures or don't buy any of it? >> first thing to do is make a commitment tocryptocurrency an crypto assets as an asset class within the portfolio that's the first step and then seen today many investors have mentally made that commitment and needed a vehicle that they could more easily access i will say that i think today and the trading is a testament to the fact that 2021 has been a breakout year for cryptocurrency not just in terms of adoption. not just in terms of performance but adoption and early days and
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investors looking for variety to access it and i think more and more but bottom line is very few investors are active in crypto if there's 40 million bitcoin addresses today and 5 billion adults globally that's future aloe case for bitcoin potential. >> good point. up more than 4%. all eyes on netflix after the bell for results julia? >> the number one thing to watch in netflix results is subscriber growth after a smaller than expected addition in the first half of the year sent the stock down two parts of subscribers third quarter numbers. projected to add 3.5 million and more important is guidance annual ohio states forecast 8.5 million additions in the fourth quarter. we'll have to see how the success of new content like
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"squid game" plays into the guidance and commentary on what's next for games and content investment guys >> julia, thank you. 4 hopes are high with the success of "squid game" and the stock up 20% after being range bound for a long time on the momentum in this hit >> it's partly the hit and the third party indications of subscriber growth looks good an enif you look at the long history of netflix stock with the sideways period and then a multi-month run and that's how you get the upside final point is this comes at a time when all the competitors had their shot and they lost and got the attention and hbo max and disney plus and got whatever uptheic to get and didn't see the attrition on netflix netflix is just core tv right now and the rest is around the
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edges. that's super expensive always has been. >> the question of the run-up is if they have to have a significant beat on u.s. growth again. this is harder on that level maybe an asia or europe beat doesn't dplifr share price gains. >> the line is "squid game" is this proof of concept to source externally and have it be a -- >> they have done that with french shows. >> absolutely. give them credit for the $900 million bonanza of success is the value or "squid game"? they don't tell you how much cost in shows they make and people shrug off and - >> bloomberg said it cost nothing. >> what they consider to be the long term value of the asset -
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>> versus chappelle. >> probably coming up on the call. >> doubtful. >> we'll see netflix is flat approaching the close down numbers due to cross any moment now. the broader markets up nicely. >> essentially top of the morning holding the gains. it is back and forth if you look at the internals breadth is positive. this is the case yesterday, too. it is mega caps are definitely in the lead top. top 50 biggest stocks is up. they're kicking in some gains and still upbeat behavior nonetheless. you have to conclude take a look at the ipo etf had a little bit of a spurt higher it had a tough road after the early year peak and speculative
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stocks and on parody for six months volatility index below 16. market seems to be more in balance. you have traction into the uptrend. and volatility is hedged up. >> just over wasn'tone minute to only one sector in the red approaching the close. consumer discretionary staples were in the red weighed down by p&g but now flat health care is up 1.3% energy rounding out sectors up more than 1% today 10 of 11 in the green. oil up today gold and silver up the dollar sliding .2% we have seen a steepening of the yield curve today.
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the 10-year up to 1.64 approaching the close we are up almost .75% on the s&p 500 the dow up .5% the nasdaq up .7%. ringing the bell is the ceo of delta airlines you can see exl reninging at th nasdaq flanked by flight attendants there. delta ceo. welcome back to "closing bell. i'm sara eisen here with wilfred frost and mike santoli take a look at how we finished the day on wall street higher again near session highs got a little buying activity in the close there and the dow closed up 200 points biggest contributory j&j and
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walmart after goldman sachs call in favor of that stock p&g and nike a drag on the dow s&p up every sector higher except for consumer discretionary the market's up almost 2%. the nasdaq on did day up apple is a big contributor it reacted positively yesterday to the product unveil. continued to rally talk from the bullish annual itselves to put the new chips in the macs investors -- >> i was going to come to the netflix numbers. >> go for it. >> crossing and a first look at where we stand which is a slight beat on the eps line and in line on the revenue 7.48 billion was the revenue print coming in in line with consensus estimates and the guidance they provided a quarter ago. in terms of paid net additions,
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that's slightly ahead of forecast coming in at 4.4 billion. the forecast for 3 ha.8 bringin the subscriptions to 214 million. a fraction short $3.19 per share of diluted eps that's the real item where there's a decent beat and leading the shares to jump ant 2% need to dive in to the numbers to get the color as to why we have the bottom line beat. maybe julia has it for us. julia? >> i think the key thing to note here is the guidance this is a company that has not guided to this many new subscriber additions in many years. it is since 2019 that the company guided to more than 7.6 million paid net adds so to
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guide for additional of 8.5 million in fourth quarter is in line with expectations and notable that it is that high so i just want to stress the importance of that forecast and the fact that the subscriber additions higher than what the company forecast and what analyst forecast i think that's key they say that there's no better example and speaking about the strength of the content than "squid game. released on september 17 it is the biggest tv show ever 142 million member households globally chosen to watch the title. that's up notably from the last number they issued is 111 million. big gains there. the other thing to note here is they say that for the second
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consecutive quarter contributor and the u.s. continues to be as pretty saturated market and just really boasting about the success of the film slate here and they have announced a change of later in the year to shift to hours viewed for titles than accounts to watch them netflix faced criticism for noting the first couple of minutes of a show or movie they say we'll start to release title metrics outside of the earnings reports so the members of the industry can better measure success in the streaming world. trying to have transparency. i'll continue to dig into the report and shares up 2%. >> i love when they talk about the competition.
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compete for time and attention reading a book browsing tiktok or playing fortnite an example, on october 4th when facebook had a global shortage the engagement saw a 14% increase they can track that. there's a lot to like. >> i think the fact they beat by half a million and still didn't say it pulled forward and next quarter's guidance just as high they have confidence they have the algorithms and know the search patterns netflix wants to kind of point out how much people watch and also how small netflix is relative to everything else in the world. 8% i guess it is or 6% of total tv viewing time and much more.
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>> book reading or tiktok watching. >> let's bring in mark mahaney and levy to discuss the takes on the numbers. mark, i'll get your reaction to the numbers first. as we have been discussing largely very positive. if you are looking for an issue u.s./canada essentially no net adds there in the quarter. >> that's right. also expectations obviously super high going into the print given the data points around "squid game. so these numbers are good enough to cause the stock to go up modestly and to put it in c context this is the fourth year in a row to add between 8 million and 9 million subscribers in the forty quarter. that's impressive and tells you the growth rate and the
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execution growth is consistent pre-covid, during covid and post-covid and why we are bullish on the stock. >> unsurprisingly talking up "squid game" and the extraordinary numbers. number one program in 94 countries. 142 million member households chosen to watch it in the first four weeks to come up with a va valuation for it what do you make of that >> it is interesting because wall street is already looking for a pretty high forecast for the fourth quarter and just meet it and it is "squid game" it seems to save the day a little bit. i think netflix's share of the global streaming universe is shrinking thanks to newcomers like disney plus and hulu running strong and so it's
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become a much more crowded field and have to do that much more to stand out and "squid game" saved the day for them it is an impressive forecast for the fourth quarter and all good reasons to be bullish. same time i'm curious what it means for disney announcing the earnings as netflix rises i anticipate disney to rise at an even fractionally higher level based on how much more important streaming is to every day consumers. >> and worries about that. netflix cash position continues to improve free cash flow to be break even in 2021. doesn't need to have any external financial needs >> a pretty long stick and we think break even they're able to get a 280 billion market cap and still in
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this year essentially redeploying the cash that comes in market allowed them to do it yes, they say free cash flow positive that's not what the story is right now. but yeah they certainly can kind of afford to plow it all in right now. >> julia has a couple more highlights for us. >> the latest on games here talking act the expansion. they began to test in select countries and remember games on netflix included in subscriptions and not adve advertisements and purely focused on enjoyment and plan to try different games and improve the game library and commentary on the delays to covid
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they said they anticipate a more normalized content slate in 2022 with originals and next year than this year and a release slate balanced more than this year and talking about the fact that the content so much shifted to the back half of this year with covid delays. >> thank you mark, i wanted to come back -- 2 million paid net additions would we not have expected more than that given "squid game" and korea? >> i think that's a reasonable point and the key thing for netflix is netflix has shown phenomenal success in north america and latin america. it's not proving in asia it took years to crack the code above 10% in japan i think korea they have done reasonably well. india is a slog for them
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new growth probably comes from the asia pacific region. i think investors will view that as a positive but that's the toughest market for netflix today. investors want to see the proof. maybe you have that today. >> how long can they keep it going when they get a huge hit like "squid game" which is according to them the biggest they have had? how many quarters does that add up to in better subscriber growth >> if they do a -- >> sorry that was for - >> that's fine if they do a second series of "squid game" and looks more likely than not, they haven't green lit it yet for them to ride the wave of the popularity of what was a sleeper hit so i do think that for them for netflix is an in you-- a
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numbers game they don't know until they produce it and doing things like sort of buying up studio lots or renting out a lot of sort of infrastructure of hollywood to the point where others don't have anymore space and other studios can't make use of the hollywood infrastructure to use r make the shows and will spend that much more money yes, a may not be hits but we need two or tloo e to do it and got the crash flow now a self funded company now and a juggernaut for them. >> what's the read across for the sector here? >> i think it's still an important sector with a lot of growth in the direct to consumer streaming. it is interesting because now looking at the numbers 64% of the u.s. households have a paid
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tv so i do think the substitution potential is still there and all we talk about with netflix and others is spending so much money on new content that some of it is bound to pay off and it's an important industry to watch and as penetrates in asia specific and mobile users there's a lot more levers to pull. >> it was up 2%. what are the key things on the call for you >> i think that expectations were super high. they kind of met them. i hadn't figured out what happened to rapu did they come at a new -- remember there's two new things w gaming and the mobile plans in asia and africa.
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so i don't know that there's any detail in the letter maybe an analyst will ask about this, the traction do you have for the mobile only plans? they can bring people in this company needs to get to 500 million subs they can do that over time and needs to show that path to $30 in earnings. there's still upside on the stock from here. that's details i'll look for in the note and the call. >> thank you so much for joining us. >> thank you. up next interactive broker shares falling after hours thomas peterffy will join us next and united airlines results due in just a few minutes. "closing bell" back in a couple. peerless design,
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joining us now for a first on cnbc interview is the founder and chairman thomas peterffy thank you for joining us. >> thank you for having me by the way, it was sinking but now it's back to where it began to sink for. >> good to hear for you. talk us through the quarter. seeing strong volumes in equity trading and perhaps engagement trailing off a bit after an unbelievably strong period >> absolutely. so our adjusted earnings for the third quarter. revenues of $650 million 420 million. which is making for a margin of 65% which i think is pretty good right? so this was our second highest quarter of revenue ever
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surpassed only by the first quarter. 57% from the few years while we expect the pace to moderate i think we still can be looking forward to a -- in the 30 to 40% range. >> what type of trade are the new account openings retail traders are they joining you from other platforms? >> all kinds institutional. financial advisers we have retail customers some of them are brand new some of come to us from other brokers so we have the entire gamut. >> what's the competition like between you and robinhood?
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>> robinhood is a very, very different group of people. so, our average account size is $240,000 the average robinhood account is something like $4,000. so we do have about accounts from robinhood and they're larger but smaller than the usual account size go ahead. >> what level of engagement are you seeing in crypto related products clearly bitcoin it of product went live today and items in the suite of product launches, you have had launches in the crypto space. do you think this is the gift to keep on giving >> i think this is going to be the gift that keeps on giving for a while.
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for a while longer this is the etf introduction is very interesting and i find that it's interesting that it is so, well, praised because i think at least from my point of view it is a misunderstanding of what it is all about. i think that many people invest in crypto as an insurance to fall back on should the monetary or banking system experience some trouble and in that situation you want the actual coin so you can -- you are able to pay with it and etf based on futures or the actual future contract is not much help at the time so i think in time of trouble the etf to go to a large discount to the actual coin. that's why i think. >> also wanted to ask you about the other topic on the s.e.c.
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front with payment for order flow chair gensler was on cnbc this morning. listen to what he said about this issue. >> when order flow, when trading is being purchased and sent to one wholesaler they have information that the rest of the market may not have, at least for a short period of time, and even milliseconds matter in these markets and what we are looking at, also you are absolutely right that i think we want to look at that and how we instill greater competition for that data and that order flow. >> keeps teasing there to do something. what do you expect how vulnerable would you be? i think it's a bigger part of robinhood's model than yours. >> i agree with what he says
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about formation and also we get a lot of customers because they know that they don't have to trade against market makers when they come to us. we try to give them better executions so yes i mean, he is right. you can't deny he is right at least from the information and probably the pricing point, too. that is not that clear >> thomas in terms of what your clients are up to at the moment you often give us insight on cash levels relative to where they have been and long versus shorts do you feel like they're bullish or cautious? >> it is interesting because the clients are of two minds some taking the chips off the table and other people are
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putting on more and more lavish positions so this is an interesting situation where both the cash levels and our margin loan levels are rising so yeah there are two groups of people just like always but they are 50/50. >> so if we do see some type of inflection point in the markets with the fed starting to taper and potentially looking to higher rates, stimulus fading, and we did see a bigger k correction in the markets -- >> it certainly would slow but maybe even stop. but i think that the big fear at least on my part is china going in to taiwan militarily.
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that would cause a huge crash. right? >> if china was more aggressive with taiwan? >> that's right. that's right. >> yeah. >> then they could take control of the semiconductors companies and we would be in a hard place. >> and the u.s. would presumably fight back we'll keep an eye on it. >> i don't think so. >> you don't >> no. we will not fight back. >> you think investors are u underestimating this risk? >> yes i'm surprised the market is going up and up and up and up and not thinking of anything that could happen to bring the economy to its knees >> geopolitics gets discounted as you know, thomas. >> that's right. that's right suddenly emerges and then it's too late to do anything about it
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>> we appreciate your commentary and flagging it as always. straight after the results good to have you. >> thank you very much. up next, mike looking at why history said this history in commodities could run out of speed. find out how much re tmoony dwyer sees later on "closing bell."
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another strong rally day on wall street. dow closed up 200. mike santoli is taking a look at seasonal trends. >> so it's the season when people want to talk about seasonal patterns turning positive for stocks anyway this is the average composite year on a calendar basis since 1950 where are we right now right here it is the very end of october which again on a net average basis you see the bottoming for that early fourth quarter move and then of course some of the best months of the year. taken as a broader background context and not something to
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track precisely but last year the low on october 30th of last year after september and october had been weak and this year not too different. commodities are slightly different story. commodities have been in a massive uptrend this year. this is the broad commodity chart. this is a similar annual composite and this shows about where we are right now this week interestingly you have late year weakness on balance in commodities. the absolute numbers are very low. you will see that the typical move is less than 3% to a high in an average year and you have negative net returns on the typical year because over history commodities don't add value. they get inflated down and technology and interesting that the cadence is weak. see if the current trends of copper and oil can trump this because nothing everything is
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moving as one. >> that supply chain top of mind. >> for sure. >> why does that happen toward the end of the year? >> it is not clear to me exactly why although keep in mind physical demand matters a lot for commodities so whether you get through kind of an ag season and then a matter of the end of the year ordered for you need, i don't know what the reason is but tends to be -- i doubt strictly because of investment flows. which actually for stocks is much more about that and how people allocate the money over the course of the year. >> back to the first chart you marked out where we are but ahead of that so does that alter the analysis at all? >> you would think it would sort of add payback up as of today
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25%. but no the actual pattern is years up more than 50% the finish of the year is stronger than average. it is about the direction and the cadence than the magnitude and not dragged down to the average annual 10% return and very few years conform to the long term average. tony dwyer is all orr this trend. phil >> united airlines a loss. $1.02 a share. revenue coming in better than expected that's thanks to firming bookings in september. revenue down 32%
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better than expectation. the cost per available seat mile up 15% below the guidance of chasm up 17%. but the guidance what everybody is focused on. start with the fourth quarter. no q4 eps guidance revenue down 25% to 30%. on capacity being down 23% united is not giving a protection of when it plans to return to profitability and corporate and international bookings are strengthening we asked people at the airline how much are they strengthening? they decline to give us a percentage that's a question we'll have with scott kirby for perspective
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on what the company is seeing as they head into the holiday season as they are seeing an increase in corporate and international bookings see if we get more clarity with regard to that back to you. >> thank you so much for that. netflix well off its after hours highs despite the strong growth we'll get reaction from an analyst that hiked the price target by $75 ahead of the results. still high in after hours. we'll be right back.
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it is time now for a news update with shepard smith. >> from the news on cnbc, we are about three hours away from a vote in the u.s. house on whether to push an effort forward to hold steve bannon in contempt of the congress refusing to testify or turn over dock ms to the house select committee investing the january 6 insurrection it is expected to pass easily and then heads to the full house. if approved there a criminal
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referral would be sent a gang in haiti accused of kidnapping a missionary group asking for a $17 million payment in ransom. $1 million for each hostage according to the reporting of "the wall street journal." the missionaries while travels to an orphanage outside the capital city of port-au-prince ji bail denied to allen murdoch in a lawsuit orr the death of a former housekeeper and facing charges for hiring someone to try to kill him? the jair jurrjens ordered him to undergo psychiatric evaluation tonight the largest and most advanced space telescope ever built. we'll take you there on the news right after jim cramer back to you. >> thank you so much we look forward to it.
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fbi agents raided the washington d.c. home of russian billionaire oligarch known for throwing lavish parties in davos among two dozen russians sanctioned in 2018 and activity at a property in new york city he has close eyes to russian president vladimir putin and also a long time associate of former trump chairman paul manafort. >> a scandal in 2018 when he was in robert mueller's investigative cross hairs and still throwing parties at davos and caviar and champagne flowing. >> backed out of the companies in terms of control to continue to operate he kind of moved around to back himself out of the sanctions
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maybe this changes that. netflix shares losing steam after hours and what analysts want to hear on the call they're still positive plus he correctly called the market gains tony dwyer on how high stocks gocan into the close of the year [coins clinking in jar] ♪ you can get it if you really want it, by jimmy cliff ♪ [suitcase closing] [gusts of wind]
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beat on eps adding 4.4 million paid users in the quarter and strong guidance. joining us now is two guests welcome. any sense of why the stock is giving up the gains? is there a focus on perhaps the u.s. subs growth which is negative >> yeah. the u.s. and canada is an area to definitely if there's negative takeaway. but i think we need to comment that there's a saturation in the u.s. and canada and more importantly the guidance for q4 leafs a lot to be pleased with asia pacific is an extremely important international market and we feel good in the momentum that they have going into q4 and
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setting them up for next year. we thought there's upside surprise prior to "squid game" and caught lightning in a bottle with "squid game" and really the timing of that couldn't be better so i think all in all we got more time to dig into the report and pricing power across the region even within the u.s. and pretty pleased with the idea to be more tr transparent. which is something investors wanted a sense and all in all i thought the results were pretty encouraging. >> how much more upside is there, alex, for subscriber growth if the u.s. is saturated and a hit like "squid game" and everyone i know watching didn't lead to growth in the u.s. >> that is telling growth in the u.s. and canada flat so where did the growth come from?
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it came from the europe, middle east, africa region and it came from asia acific, both adding roughly 2 million subscribers each in the quarter. that is indicative of the netflix investment strategy and the netflix growth strategy. i would imagine there is in fact still a fair amount of growth in those regions. there clearly is not much growth in the u.s. and canada it is a stable streaming service in both countries and maybe maxed out which i think is telling to where the other streaming services are headed. still more in their infancy a year or two old at this point and trying to gain the subscribers. perhaps 74 million until u.s., canada where netflix is now is the ceiling. >> alex, it is interesting to make a comment that during the facebook outage they saw a significant jump in engagement
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on their platte form and interesting from a netflix viewpoint. facebook is probably pasting it across the defenses on an anti-trust level showing that they're rivals even if one is meant to be social media and one is tv and movies. >> yeah. netflix hasn't been caught in the uts big tech regulatory crackdown. but even netflix threw in a line in the shareholder letter basically as a reminder saying we are quite small and compared to social media companies netflix points out they're 6% of the total viewership in the world. or if you count the entire media world and it is a good point i don't know if that's a solid argument for not because the social media companies are a different business than netflix
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but as the world moves it is a fair point of convergence of social media companies and the traditional media companies including netflix. >> what do you do with the stock? >> we reaffirmed the buy opinion. $725 price target. one more thing to make the point that voinvestors want to know i netflix local lang wang strategy works. making content to travel the world and sets them up as they continue to ramp up the content slate and i think one of the things that make us constructive looking ahead to next year. >> it is amazing how many foreign language shows we have watched this year. lepen. call my agent.
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what does this mean for disney plus and the competitors are can we not take anything away? >> i think it is great news for the other streamers. i wrote an article for about how they lament when a competitive service has a big hit like "squid game" but because it is so much less expensive to produce local talent in international companies, they don't have to deal with the u.s. union, it is great news all the streamers are like the american audience will accept international shows? we don't have to pay tens of millions of dollars to make things with u.s. stars should be a bonanza looking outside of this country for production with local foreign language talent. >> sara, to that very question, so much is made of the comment
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about disney plus and december quarter. netflix is guiding lays that to rest there is not a fall in terms of the streaming landscape. you will see volatility from among the platforms depending on the content they have and the release slate and what different yates the streaming from the tradition at paid tv so much is kind of dependent on the short term content and the quarter to change. >> thank you so much for joining us. up next, tony dwyer with the bullish market call from this morvet and seeing stocks trading from here.
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the s&p ending higher today. a note to buy on the weakness and since then the market is up. tony, i see that you are
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combatting this stagflation ri idea >> it comes down to what i talked about last time i was on. there is a perception that somehow the recovery from the recession is different it has been stronger and fueled by more debt, but of the four recessions in my career, always a different reason goes into reception and the shutdown of money but the response is the same, throw as much money at it as you can i did a funny thing this morning. i did a word search on the internet for stagflation and then put 2010 in it and stagflation 2004 so viewers could do that themselves that we are in a stagflationary
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environment isn't unique either because we are coming off growth activity >> tony, back in october you made an apt call but what kind of level would you think we have priced in given we have had such a good run we are 5% higher, do we have to think about taking profits again? >> if we are replaying this, i think you could have another 5 or 10% move and re-evaluate basing on where interest rates are. but i would suggest this time it was in the summertime when the cyclical stocks were having an underperformance everyone thought the economy was
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collapsing now we have the cyclicals leading. and the most near term question, i think rates are probably bumping up against where they will go which may stall out the rally. >> where do you think rates are going from here? >> i think rates are pretty close where they will be for the rest of the year this fear of inflation is real these issues are real, but when they are talked about so much in the market they get discounted the ten-day rate of change and two year yield has had a heck of a move there are few people who aren't talking about stagflation. when you have such a wide array of people talking about one subject, it gets discounted
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it is time for our wall street look ahead. tomorrow we will get the beige book, one of my favorites from the feds -- we also have an exclusive interview with the head of the cleveland federal reserve at 4:00 p.m. tomorrow which i am looking forward to. it's always important how they are thinking right now but i know you are dying to talk about ulta >> worst performer on the s&p today. it was down 10% at one point they gave a multiyear sales and revenue ahead of an investor meeting, laid out their strategic expectation. talked about 3 to 5% growth.
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not bad numbers, but the market took it as a downturn in what has been an expansion. not as expensive as it was at one time i have a sense that if we are talking about next year, nominal gdp, maybe it will be 7%, 9%, inflation plus real growth so if you are saying 3 to 5% over the next three years, maybe that doesn't sound so great to investors who are expecting the economy to be hotter >> it seemed a little bit of an unwind there was a massive sell-off in the shorter maturities yields going up in two year, three year, five-year notes. but maybe that reassessment in
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terms of pricing >> i feel like the consensus has changed in the market to where instead of stagflation, higher inflation and higher growth and that's what caused this rally particularly the cyclical group. >> it is a higher metabolism economy that seems like it is going for the next few quarters at least >> we are out of time. "fast money" starts now. >> i'm melissa lee tonight's lineup -- tonight on fast we are after the chairs of netflix and united, earnings and breaking down their quarters a blockbuster debut. but it was another move in crypto


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