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tv   Closing Bell  CNBC  October 21, 2021 3:00pm-5:00pm EDT

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people using air freight if they can. if labor is the issue good luck. >> chipotle have raised prices before we'll see what they say. >> sounds like someone is headed to chipotle. thank you so much. "closing bell" is next wendy's this week, as well welcome to "closing bell." i'm wilfred frost at new york stock exchange a mixed session on wall street the nasdaq out performing heading into the final hour of trade. >> i'm sara eisen. welcome, everyone. right now investors keeping a close eye on earnings. ibm sinking and weighing on did dow. tesla higher and much more action after the close jobless claims below the 300,000 level in the latest print. more progress on the jobs front and oil making a move lower. today's downturn pressuring the
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energy stocks. 59 moneys left to go in the session. consumer discretionary in the lead right now. >> on the show another can't miss fed interview in a moment rafael bostic will weigh in. plus a pulse check on software autos and chemicals when we're joined by the ceos all on the back of earnings. and more earnings after the bell including intel, snap, chipotle as scott mentioned and mattel. >> let's focus on the big stories at this hour mike santoli tracking the market action and steve liesman with the fed's new move mike, what are you watching in the market >> index is pausing at the old highs. from september 2
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really some strength in the larger nasdaq stocks keeping that index green and the majority of stocks on the s&p and the new york stock exchange are down on the day but you see this formation still looks pretty encouraging could get a pullback to that level and sets up nicely to give a little bit back of this 13 trading days up. running hot. a couple indicators i look at resemble early july. some of the sentiment measures call back to that. so that's something to keep in mind in terms of whether to slow down and the seasonal factors in the favor. take a check on the parts of the market to reflect where the aggressive animal spirits flow right now. these are three quite distinct
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areas of the market. cloud computing, fintech and ipos look at the similar shape in the charts back from february and the surge back then why they're coming back and see this recent moves and seems like you get more of that speculative interest and the more aggressive money. interest in tesla. the options market is massive. the one area not participating in general with one big exception today, spacs down 35% from the high as a group mentioned energy weak. this is what the charts look like for energy. broad commodity indexes and for copper yeah they have got the little switchbacks coming and doesn't look like a lot in the overall chart. the inflationary story is there. big question as treasury yields go up and people position for a tapering calendar for the fed do
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these prices sustain themselves here it could just be like we had the fun and maybe there's a sheriff going after the inflation soon th that's wort asking. >> in the bond market and where we track inflation, the 10-year break even well above the fed's target of 2% now the fact that that's making a move, how's it impacting equities changing portfolios and are you seeing evidence of repositions around the inflation which has been a worryfor a long time an heating up again. >> you see the inflation beneficiary areas of the market did better real estate. office reits have done very well so i would say yes i also though would caution saying the highest since 2012 were the market based expectations for inflation in 2012 accurate? or not so i think you have the market
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positioning for this maybe this kind of period of longer term inflation and doesn't trance late into what we get so so far i think the stock market is okay with it as long as it comes with good underlying economic growth. >> federal reserve with a wide ranging ban on officials owning individual stocks. steve? >> thank you a conflict of interest controversy and the rules bar individual security purchases by senior staff the rules prohibit purchase of individual stocks, bonds in-agency securities or mortgage-backed securities or entering into options futures and other derivative trance actions. there's questions of transactions by two fed presidents among others who both
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resigned two officials and jay powell purchased assets in this case m municipal bonds similar to those that the fed bought in the response to the pandemic more details on the rules. limited to mutual funds or similar collective investment vehicles officials have to 0 tan prior approval and hold investments for a year no purchases or sales allowed in heightened market stress and disclose transactions within 30 days as they currently do. we just got some information from the white house that i want to show you. there's a quote from fed chair powell why the tough new rules raise the bar high to assure the public that we have a single-minded focus on the
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public reserve the white house says we deeply respect the independence of the fed. president biden believes they should be held to top standards and won't comment on the particular new rules that have come out, sara. >> all right thank you, steve we're going to talk about that in a bit and speaking of the fed cleveland fed president weighed in with her outlook for interest rates yesterday on the show. >> i don't think that interest rate, you know, hikes are coming any time soon because wok we'll reach the goals of maximum employment and inflation at and above 2% for sometime. >> up next, we'll atlanta federal president bostic for his outlook on policy and inflation and the take on the breaking news about the new stock ownership rules for fed officials including himself.
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the other fed presidents and governors, do you think it's fair >> well, fair is not really the standard i think the standard here is that we need to make sure to preserve and retain the public's trust. over the last year and a half we have done as a body things that we have never done before. unprecedented interventions in the market to try to make sure that the economy got through this covid crisis with as little damage as possible but the rules didn't change and this reflecks and acknowledges that the conditions have changed. our position in the market changed and we then need to change the approach to make sure the public trust is kept. >> who do you think about the impact if any and potential harm and damage done as a result of this controversy that has unfolded >> i'm hopeful there isn't much damage done. my goal and my approach dean
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interactions with the public to go about the mission has really been quite positive even in the midst of this. i'm hopeful swift action allows us to put this behind us and focus on the job at hand which is to make sure that the economy continues to grow and achieve the dual mandate of stable prices and maximum employment. >> whether or not damage has been done or trust has been lost, has this step been taken too late should it have been taken not really just months ago but perhaps years ago? >> well, i think the historians will have to answer that question personally these are always hard things to do in previous lives i have been involved in regulatory discussions and questions of how far to change rules and the calibrations are always difficult to assess in realtime.
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the urgency of this change really has emerged because of the things we did in the crisis. i'll let that debate happen in another place. i'm glad that we have taken a step and i will continue to do my best to make sure that people have trust in what we are doing and really believe that we are all here doing these jobs to advance the public interest and to make the country and this economy as strong as possible. >> just the last question on this before we move on but i don't know that it's fair to frame the issue only arising because of the steps taken in the pandemic the fed has an extraordinary power over markets and existed for many, many years now and one wonders if you should have been as a group more forward thinking about that as a world that moves
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forward. feels like that's an excuse to hide behind instead of owning up that the change should have been made sooner. >> i won't debate with you on that here. i will say that once the issue was acknowledged what we did is act and i think that's kind of all the that speak to at this point and we can have lots of debates of when was the appropriate or best time to do it but that's behind us now and i try to stay focused on the job at hand moving forward, takinging the rules into account and don't trip on this in the future. >> one thing i loved reading is talking about the -- i don't want to say it i don't want to get fined. >> i was going to hope you say it. >> i won't say it went from being so overused, from the fed chair, all the fed
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members the now you don't hear much of it we won't use a word to label it but how do you think of how long and damaging and dangerous this inflationary period is going to be >> one of the things we have seen, i have heard from business leaders across the sixth district where i have my jurisdiction, is the disruptions last longer than expected. the labor markets are not going to get to a new equilibrium as quickly as we hoped and demand is high and we would have inflationary pressures and the more i talk to folks it is clearer that this will last into 2022 part of what -- the ultimate answer to how long this will take will be how quickly we resolve some of the coronavirus issues as well as some of the supply chain challenges that are happening at a global level.
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in terms of how damaging this is, i think that this is something we'll monitor closely and have surveys to get a sense of whether businesses have changed their strategies and approaches to pricing and whether consumers change the things they buy and investing in themselves to get skills to allow the economy to be more pro productive we are not seeing signs of that damage and those changes in terms of behavior but if i do i will encourage my colleagues and i to take some definitive steps to try to prevent that damage from getting very deep. >> are you incrementally worried, president bostic, when you see inflation prints like that in germany this week of 14% ppi that things could be out of hand beyond your control, that things could take off overseas and that inflation could be
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imported here in a way that might be hard to kind of prevent because it's happeninging overseas >> i'll tell you i'm always worried i get paid to worry. the signs are things that give me concern and make me have to work harder to see if there are any signs or evidence that's happening. one thing we do in atlanta that's useful is we don't wait for the data to come out in terms of mothly print and inflation. we try to get out into the field and talking to people who make pricing decisions in realtime to see how it evolves we are not seeing that momentum that might get into more difficult spaces but i'm d diligent and will continue to try to look at the market and discern if those things are happening. >> so you said that you're learning and feeling like this inflation is going to last a lot longer very high levels or at least
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higher than the fed's target what are you prepared to do about it and when? do you think about rate hikes next year? if so, how many look appropriate at this point? i'll start by saying we have to start with the asset purchases that's the first step in terms of policy response and then watch and see how the markets respond and how the economy responds to the change in policy stance i will tell you i for a long time had one interest rate increase penciled in for 2022 because the experience through the pandemic has surprised me to the upside jobs came back faster and i expected and gdp i agisted the expectations going forward but of course a lot will happen and we'll see whether the economy moves where we might
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need to move more or quickly or even putting the brakes on saying let's hold back and let things go. we talk about data dependence and letting the evidence show us the way. i'm really going to lean into that as we get into the first half of 2022. >> i know your focus is the economy and not the stock market but what about house prices? are you fearful of a painful and perhaps sudden pullback in house prices when rates rise >> i don't think that's going to happen but it is definitely something that we have got to be mindful of here in atlanta i saw a report that suggested prices here levelled off to suggest that things that are starting to get back into a normal tra jejector. we look at across the southeast and the country and not seeing sign that is we're at risk of having a deep housing crisis
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>> your own gdp tracker is a bummer, president bostic lowered down to .5% gdp for this quarter and well low where wall street is and where you first were in the summer everybody expects it to be "t" word and bounce back in the fourth quarter but what does it say down to 0.5% and how strong can that bounce back be? >> the important thing to keep in mind is the constraints on the economy on the supply side demand is very strong so if we can get resolution of the supply chain challenges, if we can get the workforce and workers who are now on the sidelines in some cases because the child care is not resolved or the schools or how to deal with senior care and resolve the things i think there's a lot of space for the economy to grow and hopeful to
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get that resolution sooner than later to meet the demand and show growth numbers that would really be commiserate with the amount of energy that's athe economy. >> you said you had a rate hike penciled in. what's the chance it could be the first half of the year >> i haven't done a probability checking on when in the year i was thinking late third or fourth quarter for 2022. again, this is about -- this is with a projection that we would get back to full employment in the late summer and so we would really have achieved both parts of the chief mandate that would give us the space to start to pull back in terms of policy this has to do with confidence and us getting to a positive
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place within the year. >> finally, i noticed you held an event yesterday on the topping of racism and the economy. other fed presidents were there. it is a focus for you. i wocnder what you think of lary summers saying this federal reserve is too woke and preventing them from fighting inflation. he said a generation of central bankers who define themselves by the wokeness and how socially concerned they are is that interfering with the policy making and the ability to fight inflation? >> let me say two things on this the conversation on racism and the economy are about the mission and the mandate. if we have barriers that keep people from getting jobs and contributing the economy that holds us back and that causes us to be worse than we could be otherwise. i don't think this is about
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wokeness this is about the u.s. central bank's mandate and meeting it as fully as possible. i want to say this is not the only thing that we are talking about. as you know i have been talking a lot about inflation, about the need to have broadband in rural areas. we talk about all the parts of the economy. this is one of them and an important one but not the only one. >> president bostic, thank you so much. >> always good to talk with you. >> good to have you. >> i feel like we should have said the word. i will do it transitory. >> take a shot. >> i need a venmo name to send him a dollar. >> i'm glad we didn't say it. >> i will pay up. taking on safrs. the ceo of sap discusses earnings (crowd cheering) - bito, bito, bito, bito!
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shares of software giant sap moving lower today despite strong earnings before the bell and boost in cloud revenue i talked to the ceo about the results and where things stand in that heated rivalry with salesforce >> we are now growing faster than our biggest competitor in eap and as the biggest competitor in hcm. with salesforce, first of all, as we committed to the capital market we want to strong organic cloud comps which we are doing and not buying companies just for the sake of buying revenue as we said today we are very confident. we see acceleration and th quarters to come and over time and with sap we are now seeing a massive movement in our install base to
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the business technology platform in the cloud and of course we see a much higher adoption on the cloud, our flagship solutions and more to come and confident that we are catchinging up also on the cloud revenue side. >> you said that you are completely shifting the business to focus on cloud subscription businesses from business revenue from that. why now? your competitors have been doing this for a long time did you come late to that game >> first of all, in the pandemic a lot of customers said it is not enough to a cloud infrastructure because if a migration i don't change the business model and why we launched with sap to give access to the best practices of over 400,000 customers to help them to adapt to new business models. second look at the fragile
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supply chains today. we have the technology for that. talking about the semicon dductr shortage this is where sap can help and su stanability is a pillar of the portfolio and we are investing into an innovation in the cloud to match the footprint as we run the factories and warehouses and this is why it was the right time to pivot the company to the cloud, also in the core business. >> you don't see any slowdown in enterprise spending at the moment >> we see the opposite of course during the pandemic we saw a huge surge in our e-commerce business and supply chain and wanting with new business models and now we see is a huge demand around our sustainability portfolio and more and more companies to join
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our business network to overcome the supply chain disruption and optimistic that technology will solve the challenges we have as a community. >> people look at sap as a kind of barometer for enterprise tech spending and flashing a green light. strong demand. but the market isn't giving it a lot of credit. salesforce is up three times oracle up five times that. christian said once the market figures out the transition the company is making into subscription business cloud that he thinks they will be rewarded. he doesn't see any slowdown and did a little big at benoff for buying growth. christian klein, thank you, to him from sap. >> markets are at record highs as we speak.
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anything positive pretty much on the s&p will be a record up .2% as we speak so we are on track for that record close. nasdaq is higher but a little way off. the dow way off. time for a news update with frank holland. >> hey there the u.s. army and navy testing components for the hyper sonic weapons programs reuters is reporting at least one of the tests delayed. in haiti streets blocked with burning tires and blockages. gangs are blocking for hijacking gasoline supply trucks the head of the gang believed to have kidnapped missionaries says we'll kill them if the demands are not met. russian president vladimir putin said he's considering
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removing the taliban from the list of extremist organizations. they've held talks with taliban officials several times before seizing power in afghanistan and said president biden was right to withdraw from afghanistan sara, back over to you. >> frank holland, thank you. after the break, we trade. we work finally going public more than two years at the failed attempt at an ipo details next it is higher. later an exclusive interview with dow's joe fitteringling and as we head to break a check for you on bonds yields are higher again today. just about which is dictating the trading action expectations are higher. staples are lower. industrials, health care, communication services all
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it's been two years since wework's ipo plans blew up but today the company finally hit the public market. deirdre bosa with the story. went better with a fraction of the valuation. >> finally is right and the company looks different. it is worth about 40 billion less and an entirely new leadership team steeped in real estate experience not technology and an important milestone and
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one point many doubted might ever happen. they were on hand at the new york stock exchange to mark the debut. meanwhile ousted ceo and founder adam newman with a 11% stake celebrated uptown with what he called the original team >> this is always about the team and what we did together and we're just so proud today and for this day we just want to congratulate the current wework team and congratulate marcelo and sanddeep to execute on this team's vision. >> but sara and wilf, there's more executing to do the management team said that it will reach 70% occupancy rate by the end of the year but at q2 they were far from the goal and losing billions in terms of net
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income and so some things don't change. >> d, thank you so much. what a story that was. it feels like a big result for them but far below the valuations of a few years ago. lithium motors with strong results. we'll dive io e arwintthquter th the ceo next 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 to help you find opportunities, 24/7 support when you need answers, plus some of the lowest options in futures contract prices around. get e*trade [ding] and start trading today.
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[ding] 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.
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predicting and managing operational issues that's why so many businesses work with ibm.
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lithia reporting in a sales surge. despite concerns over slowed sales. i caught up with the ceo and got his take on what he is seeing
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from customers >> we have been able to balance the shortages in new cars with very robust used car sales we have almost 18,000 cars on the driveways and lithia used car website. >> and does that exposure to used cars hedge your exposure to new cars in the chip shortage? is it this something you expect and hope will abate? >> margins are pretty strong right now on both segments and i think most importantly i think the ability to have both used and new cars in the stores and online gives us the optionality to the consumers and the flexibility in the profitability and realize the benefits across the company. >> what are you hearing from the
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a automakers on the chip shortage? >> it's a mixed bag. it appears like we have troughed in manufacturers that we have seen the worst of it around 20 days supplies in some of those i believe because demand is so robust out there that it's probably going to take into the middle of next year until things recover to a normal level. >> with the buy and sell online service do you seethat as a hedge against the changing nature of retail and the nature of the industry in particular and allow you to have a hedge against the dealership business if that declines >> that's fair i think when we think about optionality for the consumer what driveway does is allow them to have the convenience of in-home delivery as well as the transparent empowerment of being
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in power to do that and the conventional business is 25% of the sales and $5.5 billion analyzed so it's a good part of the normal business with local and regional brands. >> on the flip side i know you are buying more dealerships. is that more of a geographic expansion play >> it is we have defined the country as six specific regions where we specifically target to try to achieve the density about 100 miles from all ku hers in the country and we have done a good job on that in four of six regions and grown at about now purchased over $10 billion in revenue in 15 moths and grown the company almost 60% and expanded that density to a
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500-mile reach to 225-mile reef. >> ceo there they have plenty of hedges within the business to the chip shortage with the used car sales and interesting still up about 50% year over year and despite the shortage. when we come back, it was a big day for the airlines with southwest, alaska and american reports. we'll hear from the ceo about the quarter and driving profitability. (crowd cheering) - bito, bito, bito, bito! - [announcer] bito, the first u.s. bitcoin-linked etf.
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we are now in the "closing bell" market zone. commercial free coverage of the action going into the close. mike santoli is here to break down the crucial moments of the trading day and today we have stephanie link, as well. let's kick things off with the broader market the dow moving lower s&p 500 is up for the seventh straight session atlanta fed president bostic joined us earlier in the hour and said he had one rate hike penciled in for 2022 i asked him when he thinks that will happen. >> i didn't do a probability tracking on when in the year late third, early fourth quarter for 2022 with the projection to get back to full employment in the late summer and we would have achieved both parts of a dual mandate to in a way
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according to the long run frame work give us the space to start to pull back in terms of policy position so it has to do with my confidence in the u.s. economy, in the labor markets responding to this demand and getting a very positive place within the year >> mike, a rate hike towards the end of q3-ish probably not hurt the too much where they are at at the moment. >> the market is there september, the third quarter next year. absorbing that it is absorbing it probably would be fine the first rate hike is usually not the killer for a bull mark before you get to that point and fits together. yes, yields had an aggressive
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move you have a handful of growth stocks responsible for the upside today tesla and microsoft. to me noise. we made a round trip back to the highs and trying to assimilate if this is the end of the yield move for the moment. >> consumer stocks are working today. steph, it is remarkable seven days in a row of gains back up to record highs why whether it's the fed or fiscal policy or slowing growth what do you chalk it up to >> we always worry about something. we talk about this all the time. i worry when we don't worry and we're complacent but into the seasonally strong period of the year for the market. fourth quarter we are passed the volatility in august, september and beginning of october and now earnings and
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coming in quite, quite strong. we not only are earnings coming in strong but liquidity. you know this. 47% of the gdp in liquidity. that's enormous and not going away overnight even if the fed tapers interest rates are hizing and i think for the right reason we root for a little inflation not a ton. i don't think we will have a runaway inflation and have pockets and this is what the companies are talking about in earnings season so far and then the biggest part of the economy is consumer. doing just fine. retail sales have been very strong for two months housing is strong. manufacturing, all these companies this week did a really good job in terms of talking about demand being there and having some problems on the cost side but we have that you canning about this, too. you have the haves and the have nots and those that have pricing power do just fine
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dow, proctor and gamble, union pacific with pricing power companies and then exposure where you don't worry about that with an avid or united health care or j&j. diversification is the key. >> dow ceo in the next hour on this show. phil lebeau has the details to know about the airlines. >> let's start with alaska airlines posted a profit. coming in better than expected at $1.47 a share didn't really do anything after posting that profit. talking to the ceo he said the staffing shortages around the country and with them it's not impacting them or causing them to reduce flights. they are gradually adding capacity in the fourth quarter into next year southwest airlines posted a loss but still better than expected
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ceo said cancelations, surge a week and a half ago, cost $75 million. they believe that they have rectified the situation and will be in a better position with adding flights and dealing with the pandemic finally american airlines with a q3 loss better than many execed. smaller than expected loss and talking to doug parker this morning he said the key to profitability is corporate travel. >> i have to be careful but what i know is once business travel comes back and you will you will see a return to profitability. >> and there you have american airlines doug parker told us that he believes that the justice department is wrong when it comes to the northeast alliance trying to unwind between american and jetblue we hear from jetblue next week back to you. >> phil, thank you so much as
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always shares of ibm plunging today the company beat on eps but missed on revenue. josh brown weighed in yesterday and told us why he's not interested in holding the stock. >> very, very boring business. trades at a reasonable valuation and always has buys back a lot of stock but ends up lower. it peaked in 2011. it's been in a 10-year down trend. it is really an impossible stock to invest in warren buffett found a way to lose money in ibm. everything they do is three years too late i'm not in it and not looking at it and not interested in trading. may god have mercy on everyone's soul. >> that includes you. >> clear words from josh steph, what is the argument? >> we've debated
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he and i have debated on a lot of names i just got into the stock maybe two quarters ago this is a terrible quarter that in q3 but in 1 and 2 they beat and were able to execute and the reason i own it is not for the legacy businesses but because they transform the company they have asset sales. they have spinouts s it is going to help add to three points to sales next year. focusing on growth businesses. they're making a ton of acquisitions they reiterated the $35 billion in free cash flow to generate and then mack more m&a find more growth businesses and i like that strategy meantime it is 13 times earnings 5% yield and i do like that free
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cash flow yield. i'm not owning it for legacy but what's to come and i'm willing to wait. >> even though the growth businesses saw their rate of growth slow down that seems like something that the bulls were frustrated about. >> i think there were two pieces the cloud business did slow a bit. they saw some pushouts and said that kendrill saw pushout with projects for next year's mainframe cycle and renewals so there's a lot that's going to happen in 2022 am i disappointed today? absolutely but i bought this only about two quarters ago and i really felt like there were some interesting changes under way and restructurings take time i don't have a ton of these names in the portfolio and did find this one compelling with the new management team.
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>> record close to the s&p. >> yes new intraday close on track. we have negative breadth under the surface and a very narrow rally for today why not in general. not quite 2 to 1 to the downside take a look at the 5-year note yield. making new highs since february of 2020. right before the covid crash and mark implied inflation of five years is close to 3% there' there's movement to the move volatility index under 15. you got more methodical attack on upside. >> at the highs of the session the dow might even go positive in these last few moments. importantly it is the s&p upset
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for a record closing high once again. the nasdaq leads the charge of the majors up 0.6% best performing sector the consumer discretionary at the belt a record closing high for the s&p 500 once again. and the dow going just positive into the close ♪ seven straight days. welcome back to "closing bell. i'm sara eisen here with wilfred frost and mike santoli take a look at how we finished up the day on wall street. flat for the dow look at what happened in the final moments of trade after the dow underperformed all day. it was weakened by ibm shaving 87 points off the dow. some cyclicals hurting
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along with home depot and nike s&p 500 closing at a record high first time since september 2 up 13 points on the day. led by health care and technology though you did have weakness there. financials, materials and staples lower. nasdaq climbed .6% it was a good day for those big cap tech names microsoft, tesla, amazon all higher in the session. paypal still facing pressure over a word of a potential deal with pinterest the small caps closed up we have got a huge hour of earnings instant analysis of results for you from intel, snap, chipotle, mattel, whirlpool and boston beer diversified set of earnings. stephanie link is still with us. tiffany mcgee joins the conversation hard to believe there's a record high
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first time since early september. >> seven-week round trip become more of a slow motion stampede light volumes. nobody aggressively selling into the return to the highs today. you have to thank tesla, netflix and microsoft. it is good to get it out of the way. and then talking about it. we are back in that zone even if as i said seven straight days in a row is a stretch just in a very short term. >> we'll continue the market discussion in a moment but there's breaking news from washington on the spending bill. hi, kayla. >> hey as the white house and top democrats discuss the future of possible tax hikes on corporations and wealthy individuals to pay for the massive package we learned that the white house recently communicated as of last night to top committees on capitol hill specific guardrails on two other programs to try to shore up
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revenue or limit the costs on these programs specifically, white house officials commune kated to these committees to limit the child tax credit to one year from five years and significant cutbacks on who would qualify for a paid leave program. the first iteration is a 12-week program and to be permanent and the guardrails in this call last night significantly curtailed from that. under a this program it begins in 2024. individuals could only qualify if they make less than $150,000. and it would only last as long as the $100 billion in funding allocated to it. my sources say four years. the white house has long said that compromise is hard but it is needed to get a package and that the ideal for the white house is original proposal and
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would go through the legislative process but this is a significant cutback to some of these programs but of course anything and everything seems to be on the table trying to bring the costs down and bring the revenue up and will see what other sources they can get it from. >> kayla, thank you so much for that let's bring that together. tiffany, with a view on the market and the record highs, do you think that it's justified these record highs again >> i'm probably not the person to ask that question there's a case for justification along certain names so we're really seeing this volatility like the dips and then the highs. but we all have been talking about this and this is to be expected and i think investors should think about the active versus passive conversation. this is the case for active
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management right? very clear winners across the board here maybe two weeks ago having the dips and we were having the conversations about do you buy the dip? if people did buy the dip in the names now they see the benefit and so it really is the case for active management and individual stock selection. >> steph, you mentioned that you want to own the stocks with pricing power in this inflationary period and dow and p&g didn't react well. were you a buyer on the dips >> i really do like dow very much he is executing for several quarters since splitting from dupont and i like the other split. i like them very much. i think dow's done a great job not only pricing cost but building cash flow and paying down debt. i like that story and the cyclical side of the portfolio for sure
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p&g, i was actually pretty -- i don't own it and impressed of 90 cents of headwinds and maintained the guidance. that's darn impressive i think that the staple stocks are expensive and p&g is in that my staple as you know that i like is coke and a staple but acts like a staple is mcdonald's those are kind of special situation stories and you have to look at the companies with inflation power. >> intel is out. let's go to josh lipton with the numbers. >> reporting q3 results. eps $1.71 versus expectations of $1.11. revenue 18.1 billion in the quarter versus expectations. looking for 90 for q4. and for revenue 18.3 billion is the guide versus estimates of 18.25 billion. segment ccg chips for pcs 9
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preponderate .7 billion. versus expectations of 6.6 billion and we should point out the cfo announcing plans to retire in may of next year the conference call at 5:00 p.m. eastern. back to you all. >> looks like the revenue miss is what is causing the stock reaction down more than 6% after hours, mike. >> the revenue miss, guidance not dazzling stock is essentially kind of reversing to where it traded a week ago had a run as the market has bounced here it is a struggle sort of looks quite cheap. based on today's earnings. next year is buy the consensus not a growth year at all. >> disappointing again. >> yeah. this is one of the reasons why i
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sold it. they have been very inconsistent and lowering guidance. at least at ibm they didn't lower guidance and lowering guidance, probably has to do with the shortages and what's the most important number is cap-x. are they going to up that number as they build out their foundry business the foundry business takes years to complete. what they're willing to spend to that point it is the right decision and meantime the it treads water. >> do you like amd better on the market share story is that still the trade? >> yeah. >> or a different semiconductor? >> no. taking market share. they have like a two-year window going forward and it is expensive but taking market share. >> do you think earnings season as a whole is doing what it
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needed to do in terms of delivering the market gains? banks felt stronger than this week's earnings. >> yeah. they did i think banks really always kind of set the tone for earnings season what the bank earnings told us is corporations overall should be strong and then also consumers were strong. right? consumers paying off the debt. really reflected by the lower revenues generated by credit card balances. right? also paying off loans. so i felt really good the other week and so listen wh now we get into the thick of it. certainly i think that we will have a lot of people still continuing to talk about supply khan, labor costs so i'm waiting to see and freight costs, all the increased costs and going to weave this -- weave in a theme
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throughout earnings season so i'm excited to see really interested to see what chipotle says, too, in a minute. >> while we wait for more earnings, talk about the stock of the day dwac and president donald trump the return of the meme stock what did it close up 400% or something? will have a social media company. >> merging with a start-up essentially. based on -- with the involvement of president trump social media, alternative. a lot of promise it's merging in with a business that doesn't yet really have operations what's fascinating is the stock traded $12.5 billion worth of shares today second to tesla at 27 billion and apple traded 9 billion. >> want to come back to in a moment snap is out and sliding 15% in
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after hours trade and that's because of a disappointing guide for q4 let's get to the past quarter. revenue 1.07 billion a fraction behind the forecast eps a nice beat. daily active users at 306 million. the forecast for 302 million but the guide going forward a little soft so the guide for revenue is 1.16 to 1.2 billion the expectation was for a bit higher closer to 1.4 billion and need to dig into the other areas on the guide and comments about the apple operating service that was rolled out in june and july has had an affect on them and advertisers across the board and that is one of the factors probably weighing. down 25%. >> that's been a big fear.
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facebook talked about this. >> didn't attack the past quarter's numbers. >> just kind of kicked in with the ad targeting facebook is now after hours down i think $13. this is going to bite a little bit here take snap back to where it traded in july. >> started to take effect and now seeing it in the comments but the past quarter was a beat on the eps line. so kind of interesting to see such a strong reaction to what's in the comment section without it tanking the numbers as yet. >> mention the ios platform changes and labor shortages impacting the partners we'll continue to focus on delivering strong results and innovating to expand the platform steph, they did see user growth but a huge disappointment there on revenues and the outlook.
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>> disappointing daus were disappointing. this stock is up 51% year to date up versus the group up 19. so it's had a rocket ship of a move year to date an since last quarter. they needed to crush the numbers and needed to guide to 50% growth because that's what they have been saying all along that's the sustainable growth rate and that's the revenue guide. i don't know what that number came in at but below 50% people will be very sis appointed they needed to crush it and they didn't. >> 25% is a big selloff. dragging down facebook we should mention. i think kind of astonishing scale of a slide for a miss but not a massive miss
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perhaps it's one where the comments have spooked things more than the earnings call will be last quarter it jumped so that's a factor we'll get back to that one chipotle numbers are out and less negative. kate >> that's right. good third quarter year. same store sales better than expected eps beat here. $7.02 adjusted revenues also a beat 1.95 billion digital sales up 8.6 year on year to $840 million more than half of those were from order ahead transactions.
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restaurant level operating margin 23.5% up from 19.5% last year due to leverage of menu prices the company says there's ongoing strength in digital and in-restaurant sales recovery 'new menu items. it is guiding for comps to be in the low to mid double digit range due to underlying business momentum the ceo will join us interview tomorrow on "power lunch" at 2:15 tune in for more on that we'll bring you updates as we get them the stock is higher by about 2% right now. back over to you. >> a company with pricing power. thank you. mattel earnings are out. >> 84 cents higher than the street expected at 72 cents.
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on revenue, they had revenue of $1.76 billion higher than expected at 1.67 mattel increased prices. just about a week ago analysts saying that the supply chain issues might be overblown for hasbro and mattel saying that the toy supplies will be okay for the holiday season back to you guys. >> thank you also tonight be sure to watch "mad money" because jim cramer will talk to the ceo of mattel c chipotle up. snap's down almost 30% 28%. tiffany, i think you wanted to focus on snap in particular. do you own this stock? >> i do own snap and it's really surprising it is down and because it was not really a big
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miss so snap really owns the young users. if you look at who's using snap it is younger kids versus a facebook where it is dare i say older people and those young users are so important because the younger user they haven't formed the buying habits yet so those users are far more expensive. snap charges more for those advertising dollars and so really that's really interesting to me because that is the social media platform for everyone i would say under -- gosh. certainly under 20 and then also, they're introducing the family engagement to have visibility in how the teens use the service and really comparing them to
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facebook with the controversy -- controversial practices. this is really looking a lot better from a parental stand point and social responsibility stand point and overall we look at esg scores and snap is some of the highest in social media so yep we definitely like them. >> tiffany and steph, thank you. the revenue guide only slightly behind expectations. the reaction is extraordinary. down a third of its volume. >> trying to grow into a valuation and why you see that outsized like overleveraged reaction in the stock. >> and - >> do you think it's reacting to a slight miss on the revenue guide or talking about the apple ios rollout? >> they miss on daus and revenue
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per user coming in light not a perfect order. >> a third of the value? let's see where we settle. up next more on snap we'll ask an analyst what he wants to hear. later the ceo of dow on how supply chain issues impact his company's bottom line.
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in monetization of the users that does indicate the impact of the apple changes and basically what we can assume is the ad prices gone down specifically on this platform. in terms of how it may impact for example google's youtube and/or facebook what i would say is that those companies have a much larger user base which at the end of the day continues to attract more users and ad dollars so i don't think the impact own those firms as significant as it may be here on snap. >> we obviously all keying off a couple bullet points and comments regards to the ios changes from apple if they comment on the conference call that this is probably going to be something that's temporary and everyone in the industry is adjusting to it wo would that abate the fears or is
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this sort of understandable that people are reacting negatively to an arpu miss? >> i agree with you. i think that if they do comment that they are actually seeking or going down certain paths to address this issue i think the market will actually like that that type of response. what i would say is that actually recently they have made some moves that indicate providing to additional opportunities for the investors. the ad stud owe they have created that will probably give the advertisers more flexibility to be creative and create better messages and poessibly get the attention of the younger users. >> in the opening quote they do
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blame the ios issues and labor shortages of partners. is that a reference to apple or what >> yeah. that's tough to tell right now i would wait for the call to get a better idea about what they mean but it could be that the supply chain issues may be impacting the advertisers and for the time being in the short term of course that's what we assume and the short term the advertisers may be just putting aside the ad dollars and waiting for the supply chain issues to improve. >> with snap down 25%. facebook last look i think down 8% is that an overreaction from facebook >> i would say yes i would say that's an overreaction for facebook. facebook with nearly 3 billion users out there and with instagram that does actually
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target and does attract younger users i think the advertisers would still prioritize purchasing ads on the facebook platform rather than the smaller players like snap. >> you are on hold for $74 for snap will you bring down that target price to match what's happening? >> that really is a good question and depends on what we hear in the call and how these new numbers inpact the projections. we'll see. >> we'll check back. thank you. snap down 25% almost intel shares are also slumping after missing revenue estimates. reaction from an analyst who thinks the stock will fall further. dow sales outlook weighed down anthe d ceo will join us later on "closing bell." i need indeed. indeed you do. indeed instant match instantly delivers quality candidates
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intel lower after a guidance below estimates. stock down 7%. here to break down whether that's an overreaction stacy bernstein. it's a good response compared to snap i kid. overreaction or not?
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>> i don't think so. this does not look like a good print. the quarter was okay revenues in line margins were decent. pcs collapsed especially notebooks and missed on data center which is incredible when we are supposed to be in the midst of a new product cycle the guide is weak on the bottom line very low they also -- they also pushed out the analyst day. this is in november. supposed to get color on the transition model is going to look like and pushed that to february for a commentary on the call and see what they said and pushed that very important analyst day out. cfo is retiring. i don't think this is an overreaction at all. >> is that a surprise the cfo
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retiring >> george davis has been around for a long time. he was at qualcomm and intel so i don't know. but it probably doesn't help right now. >> is this going to set the tone for the sector going through earnings season or do you think it's quite company specific? >> the pc side part is not surprised. cpus is overshipping by a wide margin and might be seeing that correction it is the data center piece to find more broadly worrying if true they were light probably 150 million versus where my expectations were. we have a data center digest earlier in the year. they were almost like flat sequentially they looked down 20% year over year that's astonishing.
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>> is there a way to tell how much is the global chip shortage pulling back this top line growth >> i don't know. certainly we are hearing of constraints in the pc space. i do not believe that those constraints have been cpus but other stuff and micron pointed to constraints of the systems themselves not built without parts. same time it is also going to be a convenient excuse for many folks at this point in the cycle. we'll have to see how it plays out. >> stacy, thank you for your first impression. >> you bet. >> intel shares hit hard after hours. up next, equity exposure for the market plus the fallout from snap's ad warning is hitting other social media names hard snap down little less than 25. come off the lows of the session
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and hit hard we'll be right back. everything you've seen me do was made possible by what you don't see. cause when you're not looking, i go to work. ♪♪ strength isn't a given. it's grown. it's earned and tested. ♪♪ we all have the strength to see what's possible. it's up to us to unlock it. tonal. be your strongest.
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welcome back hi, shep. >> hi, sara. here's what's happening. the vote to hold former trump
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adviser steve bannon in contempt of congress approved with nine republicans voting with all democrats. the case now to be referred to the justice department attorney general merrick garland will decide whether to prosecute. bannon got a subpoena investigating the insurrection. are the remains found in florida brian laundrie's his family attorney told cnn the probability is strong. investigators found them with personal items that belonged to him in a reserve near the family's home. two officials tell the nbc news is part of a human skull. and liftoff from a tiny island in south korea. as that country gets one step closer to a satellite in space the good news here south korea's science minister says it hit the target altitude but the 3,000-pound dummie payload did
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not reach orbit. tonight a space lawyer about the courtroom battle between nasa and jeff bezos blue origin and live updates about laundrie. sara, back to you. >> all right see you then thank you. let's go back to mike santoli now looking at investor positioning as we hit an all-time high in the s&p. >> short term traders chased this rally higher. this is a chart. a national association of active investor managers. they have ramped the equity exposure back up to 98%. sometimes over 100%. we were above the levels late 2020, early 2021. at the high end of the range acts at extremes as a
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contraryian. just as context. longer term investors, households, institutions, pension funds running with record high equity exposure. if you look from the federal reserve data equities at 52% this includes all financial assets so there's some stuff beyond stocks, bonds and cash. when debt was that low in 2000 bond yields risk free bond yields 5% and 6% but it does show you that people are fully exposed. they don't have to buy anymore maybe a general headwind and just as in terms of where we sit right now with people's involvement in the market. >> interesting closing on another record high today. will be interesting tomorrow
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with the tech names declining. dow one of the worst performers in the s&p 500 today despite beating wall street profits and revenue expectations ceo jim fitterling will join us to talk about dealing with the supply chain and much more on snap's ad warning and whether it's a buying opportunity as we're joined by another analyst as snap declines 25% at vanguard, you're more than just an investor, you're an owner with access to financial advice, tools and a personalized plan that helps you build a future for those you love. vanguard. become an owner.
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dow shares ending the day in the red despite the earnings report beating on both the bottom and top lines dow ceo jim fitterling joins us now. welcome back. >> good to see you. >> not sure what you heard about the stock making a mid-morning turn around and looked like a solid report talk to us about what you are seeing in the end markets that you operate in. >> as you said triple beat top line revenue ahead of estimates. second consecutive quarterly earnings report and eps ahead of target and guided up demand continues to be strong. i would say our own challenges this year have been two weather related event just the freeze in the first quarter and hurricane ida in september
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and that took out one of our asets in louisiana we've got everything running st. charles operations are back up and running and looking forward to a good fourth quarter and now have to wok through logistics constraints and shipping issues. i don't think it's bad as what you see with inbound containers but when it comes to trucking the truck driver shortage does have an impact on products we ship by truck. >> i feel like you're at the epicenter of these big challenges that we talk about every day and one thing that analysts wonder is the interplay between costs and pricing. looked like good pricing power is that going to continue? what happens on the cost side? >> i think pricing power is a combination but the main thing is demand is so strong against a very tight supply backdrop and went into the weather evens like hurricane ida with a very tight
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inventories in all the chains. i don't really have a value chain right now not experiencing tight conditions and primarily demand related looking downstream all the way to the brand owners they're also tight on supply and need to get some staock back into the value chains and takes time. i did say on the call i expect energy costs to be up quarter orr quarter and only negative in the guide. having said that we have good feed stock flexibility and good position to try to mitigate the costs ai think higher operating rates offset some of it but in winter we haven't had a cold snap yet with high natural gas prices and keeping an eye on that and ready to mitigate that. >> i wanted to ask about the recent op-ed arguing for trading system to try and improve
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environmental outlook in the long term. i wonder why you think that's the right system and why you have confidence that it will work it has been tried particularly in europe. it is not like it's a resounding success. >> i think when you look at energy intensive industries that are globally traded commodities they have to worry about being competitive and if you get yourself uncompetitive versus say the middle east or china, essentially what you do is you drive investments away and drive carbon leakage into those environments when you create both a little bit of a carrot and a stick, where you have remissions allowances that reduce over time but carbon prices to offset higher cost you have the ability to bring the financial markets
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in and accelerate the investment they have an allowance scheme that reduces over time and so we'll make an investment there they have existing infrastructure for carbon capture. if we have a system like that in the united states for energy intensive sectors to drive us forward faster than a tax but not going back to solve the climate problem. >> i'm looking at the stock performance. up about 7%. do you think you get credit for some of these sustainability issues just as a whacompany that makes plastics and thought to contribute to the problems do you think that holds back the performance given the focus on
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esg right now? >> remember we have come up from $22 last year to well above 60 this year but i agree with you i think we are undervalued today. i think the things we have put out there are aggressive and near term value creation in them 6$600 million growth that are delivered right now. we have 2 billion of near term ebitda growth coming on starting next year and rat ccheting up through 2025 and then the alberta investment that starts in 2027 so i think we have laid out a compelling thesis for the investors. the cash flow story is phenomenal we have paid down another 1.1 billion in growth this quarter we paid 518 million of dividend and 400 million of share buy backs and we have the liquidity
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and just a remarkable cash flow sorry so we came out of this covid pandemic with a best balance sheet in the industry. and we're poised to be able to lean in to this and make investments starting now. >> finally, always like your view on the strength of the economic recovery that we have seen and how much longer it can touch. from autos to beauty to infrastructure, what are you seeing out there about how much staying power this economic growth has >> the consumer is still strong. i still expect china next year to give us numbers maybe 4 1/2 to 5% gdp growth next year i believe the u.s. consumer is strong we have southeast asia coming back we have emerging growth in africa and i think europe will see a better year next year. automotive even though we talk
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about chip shortages we will work through that. inventory levels are at all-time lows in autos so if you look at dealer inventories, million units, we have a huge restocking to do here and production will come 7 as the chip shortage starts to alleviate. appliances are strong. i would say the biggest issue there is getting them delivered but production is strong and demand is strong we see it in all the consumer chains retailers all want more stock on the shels to get their customer experience numbers up. so i think we're looking at a very good demapd year for 2022 and then a ridge between now and '26 that will be high operating rates which is always good for the bottom line. >> jim fitterling, thank you. >> thank you snap shares sinking after an
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ad warning and some stocks are also being dragged down alongside as you can see there but snap the big decliner over 20%. we'll dig into the numbers next. tv: mount everest, the tallest mountain on the face of the earth. keep dreaming. [coins clinking in jar] ♪ you can get it if you really want it, by jimmy cliff ♪ ♪ [suitcase closing] [gusts of wind] [gusts of wind] [ding]
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snapchat is falling sharply after earnings down 23% >> why do you think we are down so sharply >> they missed the numbers they absolutely missed their own forecast any time a company puts out a 50% growth target, it always comes back to bite them. i think this is combined with supply issue ultimately we think this is a great buying opportunity below 60 if this is industry specific and not chat, the storm will go
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through and this will pass and these companies will come out of it >> any reason to think it is snap specific? it did look like a beat. it was higher than the last quarter. it was said it was a miss, but it is still more than 20% user growth >> there is no user growth issue. it is the ad revenue number. that comes back to it's going to take time to work through this we heard this through our checks some of the checks going in were a little more skittish than we have heard in the past if you can't get a product to the consumer, why advertise? i don't think this is snap specific this is a great company, innovating, in the lead for the
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metaverse. they have become the defacto fo the younger audience they have a dynamic ad platform. they have so many lanes of opportunity. this is an opportunity where the stock is getting dislodged i think we will look back a year from now and think under 60 this is a good opportunity. >> calling it overreaction >> interesting >> thank you after the brk,edea f responding to widespread criticism by banning its officials from trading ♪ ♪
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this afternoon the federal reserve announced it's banning officials from owning stocks this is what raphael said about that decision. >> we need to preserve and retain the public's trust. we have done things we have
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never done before, unprecedented interventions to make sure our economy got through this covid crisis with as little damage as possible the rules didn't change. this is a step to reflect and acknowledge the conditions and market has changed and we need to change our approach to make sure the public trust is kept. >> he said he didn't think there was damage done to the fed's reputation it does come at an awkward time. chairman powell's term ends. >> it is true. i think it is mostly an appearance issue as opposed to a gen gen genuine profiteering it was something they had to act on >> it was never corrupt, but you
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are in the body that has the most influence in a day and age where you have to make sure there is no conflicts. >> the renomination issue is coming close you should expect it soon. >> it is considered that the front-runner if powell doesn't get the job, you wouldn't see a huge divergence. >> i have heard people say in this period of uncertainty when it is perceived there is a lame duck chair, the committee can go off and speak more freely or assert their own views more which would probably mean a more hawkish message. >> we have had presidents on twice this week and i didn't sense that >> the yields are on a run
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they are pricing maybe a third rate hike next year. >> it will be tough to have another record close with facebook down. >> nas dasdaq was the leader it looks like it will be under pressure tomorrow. >> the snap call will be one to listen into as will "fast money. snapchat down 25%. thanks for watching. "fast money" starts now. >> this is "fast money." i'm melissa lee. to kick things off is a major earnings alert on snap that stock is plummeting after hours, down about 23%. the call is underway let's get straight to julia with more on the quarter. >> that stock is plummeting afte

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