tv The Exchange CNBC October 27, 2021 1:00pm-2:00pm EDT
shortage they didn't feel it the first half i think there's a very small chance they announce they will spin off porsche there have been articles in the paper about that in europe that will be monstrous i don't know if i would buy from the earnings but definitely buy tomorrow either way. >> joe >> st. louis-based $12 billion company bunge, renewable diesel vegetable oil. strong demand. >> thanks, guys. good to see everybody. "the exchange" is now. ♪ thank you, scott hi, everybody. i'm kelly evans. here is what is coming up on "the exchange" markets are hovering near record highs and one strategist says he has been buying some of the recently beaten down names including boeing and facebook. what has him looking past negative headlines and seeing 100% upside in both. jet blue posting better than expected results but issuing weaker guidance for next quarter citing pressure from fuel prices and labor costs. an exclusive interview with the ceo moments ago way.
big names reporting after the bell we will get the action, story and trades on ford, ebay and synovia. i will take dom's place today. the dow is now down 105 points today, so it has turned negative by almost a third of 1%. the s&p still slightly in positive territory by less than a point. look at the nasdaq though. this is the story of the day it is up two-thirds of 1%, in the green now. you might say, well, of course we had strong tech earnings. we also had a significant drop in bond yields look at the ten-year yield, hovering today around -- look, under 1.55 it is an extraordinary chart if you trace it back to last thursday when we were nearly up at 1.7% right here this has been a straight move lower for all of the talk about hyperinflation from jack dorsey and everybody else today this is a significant move we will have more on this in a moment the 30-year yield is below 2% for the first time in a month and this story is really playing out on a global level as well.
in fairness again, in the nasdaq we have pretty significant gains of big cap tech today. microsoft, up 4.5% now, alphabet adding 6%. these names up about 45% and 66% year-to-date, alphabet hitting all-time highs actually up about 70% since jan right now. flip side are twitter and robinhood, hit hard today. look at twitter, down 9.5%, a $55 stock, lower than it was back in 2014 it also is its biggest earnings drop since april on that disappointment there similar story with robinhood now trading below its ipo price on this more than 10% decline after its report last night. a big revenue miss lower crypto activity, even though bitcoin prices and crypto on the rise last quarter let's begin with the talk in bond yields and the rollover in stocks mark after lone and chris pesante, joining me. welcome to both of you mark, what do you think bonds
are telling us right now >> bonds are telling us that when you have an environment with higher rates, if they manifest themselves, higher regulation, higher taxes, and you go back to some of the slower growth problems we had in europe before covid, that maybe global growth doesn't get out of control. china's certainly mired in a little bit of a quandary so i think what is happening in the interest rate markets, they're saying, hey, slow down this may not just spiral out of control and be an unmitigated growth spurt for several years to come and that there are risks to economic expansion. >> which doesn't sound like you are overly concerned, but maybe we are just not -- i mean are we taking off the inflation trades, chris? >> kelly, nice to be with you again. i don't think so i think what you have seen over the last six months really is a delta variant-caused slowdown. so that is going to start to go away in the fourth quarter i think you will see it next week in the pmi numbers and the
employment report. i think you are going to see an upsurge to the economy and to earnings growth in the fourth quarter, and we will be back to higher interest rates. but i don't think that's the end of the world i think more inflation is kind of a feature of a growing economy. so i'm okay with that. >> all right obviously the flip side is strong demand, strong gdp and that kind of thing if we get there. mark, tell me why you are sticking with big tech as you say despite the pairtive nonsense of rising yields hurting those things again, maybe we don't have to worry about that thesis anyhow >> that's right. maybe that's the reason you are seeing tech do so well today and jpmorgan lagging look, this discussion if we turn to a higher rate world that technology stocks suffer, that's 1990 stuff that's not going to even affect the alphabetsand microsofts an facebooks of today it might impact nonearning disruptive tech, spacs, the
teledoc, the zooms of the world that are unproven. whether rates rise or whether they don't, i don't think it is a reason to sell out of tick i think it is a place investors want to be you obviously have to diversify around that. we talked about ideas before about where investors can be, but technology is at the core of our investment thesis. >> chris, where is technology for you and why do you look to names like boeing and facebook, which many people would put in the too-hard pile and walk away from >> it is funny, kelly, because the more someone agrees with you the smarter you think they are i think mark is a real smart guy because i think exactly the same i think that if you look at the revenue growth, not just the earnings but revenue, and that's the tough thing to get through a big company. the revenue growth at google and facebook is just phenomenal. we have never seen, at least in my career, such strong revenue growth facebook obviously has issues, but i would remind investors if it is in the headlines, it is in the stock. three or four years ago when the
cambridge analytica scandal rose and folks thought facebook was done for and the stock dropped 40%, it was a trerrific buying opportunity. i think we're at the same place here on the other hand i like boeing, it is a catalyst-driven stock. if the catalyst isn't earnings, it is getting the darn planes delivered, and i think they're getting there as the call intimated this morning it is a long haul but i think you will be well rewarded with both of those stocks >> one final note on the facebook issue, chris, we spoke with a guest who thinks litigation could be a bigger risk than regulation to the shares what about the litigation route? could they face a decade-worth of pressure and big payouts like we saw with big tobacco? >> sure. there's no doubt, kelly, in the america we live in today litigation is on the way having said that, there are plenty of terrific investments including jpmorgan, which paid billions and billions of dollars of litigation expense in the financial crisis and ended up being a terrific investment. i would remind folks old enough
to remember that microsoft had the huge antitrust case in the 1990s and tripled over the time it was in the litigation so i wouldn'tlet that scare yo away >> all right just had to press on that. guys, really appreciate it, talking both specifics and big picture today. mark avallone and chris grisanti let's turn to shares of jetblue. for more on the quarter and state of air travel phil lebeau is here with the ceo of jetblue, robin hayes. >> thank you, kelly. thank you for joining us on "the exchange." let's talk about the third quarter. a narrower than expected loss. like so many airlines you saw an increase in traffic, in demand in september as we saw covid cases dropping what do you see when you look at the fourth quarter and how worried are you about jet fuel prices >> hi, phil. no, yes, we were pleased with the quarter and, you know, as we look at quarter four we really see good strengths for the thanksgiving and then the
holiday season we also are seeing some -- continue to see some slow recovery of business travel. so overall very happy with what we are seeing. on fuel, obviously we are in a period here of elevated fuel prices it is a significant import cost for airlines, but, you know, we've seen that before and we continue to predict strong demand into 2022 >> robin, you guys historically see your mix of passengers in the -- into the third quarter, into the fourth quarter. in the summer it skews towards the leisure side, you start to see a mixed transition towards the co the business side, the corporate travel how do you feel about corporate travel right now >> leshurisure has been the stoy for 2021 we continue to see business travel claw its way back as people head back to the offices
and companies are doing business again. we do think it is going to continue into 2022 and, of course, with our partnership with american airless and the northeast alliance, by next summer jetblue will be 50% bigger in new york than we were in 2019. that will give us a very significant opportunity to serve both more business and leisure travelers. >> you brought up the northeast alliance let's talk about this. the doj thinks you guys should not be allowed to do this with american airlines. i know you have had strong comments we talked to doug parker last week he said he thinks this is ridiculous and that the doj is completely wrong what do you say to the doj and have you had many meetings has your team had many meetings with them where you've said, look, this is not hurting competition? >> it is a real head scratcher i mean the doj has presided over a significant consolidation in the u.s. where we have really four large airlines controlling 80% of the share the nea is an incredible
opportunity for jetblue to get much bigger quickly. it is going to allow more jetblue markets. we will be flying to places -- we're already flying to places we have never flown before we are entering 12 a day at the end of october between boston and laguardia. we have had fares on that market for under $30. i haven't seen fares that low for so long. london route has started again, significantly disrupting fares. so it is a proven fact that even the doj doesn't contest when jetblue comes in the market service gets better and fares go down so surely a bigger jetblue is good for competition plus, we can partner with american airlines to create this real third, meaningful competitor in the northeast. so i think they're plain wrong it is a head scratcher to me we are going to continue to grow here and roll out more and more benefits and demonstrate more routes and lower fares is in the consumer's interest. >> robin, one last question. you mentioned the transatlantic
service you began in the third quarter. we know europeans will be able to come into the u.s. starting next monday. how much demand are you seeing in terms of people in the uk who want to take advantage of your service, who are booking flights, who are saying, "yes, i want to come to the u.s.?" >> it is incredible. i was looking at some of our loads for the first flight i mean we have flights either full or nearly full and i'm sure our competitors are the same there's so much pent-up demand out of the uk. we've seen that time and time again, phil, as a market opens up, that pent-up demand books quickly. it comes back quickly. people want to fly so we're very excited for next -- for the start of 8th of november, and we think it is going to be a great fall and winter season for our transatlantic operation. >> robin hayes, ceo of jetblue joining us today on "the exchange." thank you very much. kelly, i will send it back to you with this note we have talked to every ceo who
has transatlantic service and all of them, all of them are saying what robin is saying, that there is just incredible demand from europe i think we're going to see huge numbers coming on those transatlantic flights, at least for the next month or two. >> yes, and it was also fascinating to hear his tame on the alliance that they are pushing for. phil, we appreciate it thank you. our phil leboebeau bringing us ceo of jetblue we had a five-year auction top of the hour. really strong, bond yields are dropping even more rick santelli with the results rick >> yes, kelly. normally one would suspect on a day where the market's rallying in treasuries, pushing yields down it would take away any concession to be aggressively bidding in an auction but untrue today. i gave the auction an a as in apple. $61 billion, five years, priced at the dutch auction $1.157. the one issue, the market had a lone of 1.16 before the auction results.
as you see the big drop on your screen at 1:00 eastern many believe there's so many moving parts, especially on what's considered a short maturity or mid market in the five year that have to do with not only inflation and finance and the fed, but just general demand for the instrument, which is really showing up and it tells us a lot about investors, that they are looking at maybe the recent move, not necessarily questioning the long-term implications of inflation but whether the market can stay at these levels can they try to dance between the raindrops. finally, if i look at all of the metrics to this auction, everything other than direct bidders was the best since the auctions of august of 2020 kelly, back to you >> that ten year looks like it wants to drop below 1.5% again if it did, rick, that would be a huge about face. we are still three or four basis points away. >> listen, if a ten-year note has a close any time for the rest of the year under 1.45, i will go on record saying that the 1.74 high-yield close of the
year is locked and loaded in place. >> wow rick, we thank you again, a big turn around in the bond space over the past week, highlighted by the five-year auction a few moments ago. still ahead, yep -- no, i thought rick was still talking >> i think it is going to go below 1.45 >> okay. still ahead, we will speak with the ceo of steeple on the heel of their quarterly reports. we will get the take on the market, the move in rates and the risks he see for investors plus, about a third of the s&p 500 has reported earnings but we are still in for a busy afternoon and "earnings exchange" is back with a look ahead at some of the biggest names on deck and the trades we're back in a moment > is is "the exchange" on cnbc
welcome back to "the exchange". with the market sitting at records everyone is interested in stocks again and it has been driving up profits in investment banks. steeple reported record climb assets up 25% from a year ago, but the company posting the second best quarter ever joining me with more on earnings and the potential headwinds for markets, ron kacshesky with stieffel good to have you back.
do you think your company can continue to post performance like this, you know, quarter after quarter or is it sort of a one-time perfect storm in a good way? >> i don't think it is a perfect storm but i have to tell you, kelly, revenues are up 30%, profits up 70% i wouldn't say we're going to post that quarter after quarter at all i mean what is going on, it has been a very strong market for us our performance has been phenomenal since the pandemic. we sort of epitomize what is going on, and that is demand for services, our services is through the roof demand for goods across the economy is just through the roof you really have to ask yourself from an investment point of view, you know, what can cause that to change because that's really what is going on. it isn't so much supply chain bottlenecks, it is huge demand >> why do you cite demand,
especially for goods again, i think of you guys as basically a dollars shop, not a physical goods shop, you know what i'm saying? >> no, we are. i meant to say that for us though the demand for our services, because of just -- look, we are a dollar shop when you put $5.4 trillion of fiscal stimulus in the middle of the economy we will be busy. i don't want to say it any more than that, but also the demand for goods, which is what you are reading about with all of the supply chain it is tremendous there are some things that are going to cause that to begin to potentially dissipate. that's going to have implications for the equity markets. >> let's talk about that for a moment you know, the news out of d.c. is fast shifting and we get comments from senator manchin in the past couple of hours about kind of, you know, the tax proposals he would or wouldn't back to pay for the spending
bills. do you think higher taxes are a potential headwind next year. >> because i'm not sure they are going up on high earners depending on what happens with salt >> look, any time i think you raise taxes and take it out of the private sector, that is in some form a headwind frankly, what is going on today, i think we have to just wait and see. it seems like every five minutes there's a new proposal on taxes. some are transformative may be a nice word versus radical, but it is something we can watch. i think the bigger thing that investors have to think about is that we have put so much money in the system that what has to happen in my opinion is we need to start sort of letting air out of the balloon where that is going to come is the fed. the fed has to start tapering
qe here is the number that bothers me as a finance guy. we're putting $130 billion a month into the economy through qe, yet on the other side of the ledger we have $1.4 trillion in repo at the fed. i just want you to think about it that's like pouring money in on one side and taking it out on the other. we need to start tapering and ending qe, and that has implications for the market. >> we could probably have a whole separate chat about the fed and how they're trying to become the dealer of last resort, and really in the middle of the sort of financial and money market system in the way the private sector used to be. maybe it makes things more stable but it also makes them more entrenched. my final question is what do you think happens on inflation versus deflation tug-of-war? where and how do you see this shaking out over the next three to six to nine months? >> well, it is a great question. i wish i knew the answer
i would be a perfect investor if i knew the perfect answer. what i suspect is on one hand you have got rates, you know, pulling down, just what you and rick were just talking about, yet with the way i look at it china has prices going up. that's going to impact prices across the world transitory -- demand may be transitory, but i have to tell you, kelly, we are seeing real labor cost increases, real, across all businesses, and a labor force participation, meaning our people wanting to go to work, that's declining. you add all of that up and i think inflation isn't going to be hyper, but personally i think 3% inflation and real interest rates rising is a real possibility. that has implications for, you know, high-growth companies, crypto and many of these assets that don't have income that's what is going to be at risk when you have a reckoning
with both the end of qe and inflation expectations increasing >> yeah. >> that's just my opinion from here in the middle of the country here in st. louis. >> no, that's why we check in with you, absolutely a pretty clear warning, ron, and we enjoy speaking with you thanks for your time today >> always good to talk to you, kelly. have a good day. >> he is the chairman and ceo of stifel financial senator manchin giving the thumb's down to the unrealized capital gains tax. as we head to break, here is the earnings scorecard moving through the busiest week of the season bottom line growth rate for companies up 37% from a year ago with companies beating on average by average of 12%. at the bottom of the hour we will have the top stocks to watch after the bell as our "earnings exchange" continues. stay with us
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♪ welcome back to "the exchange," everybody we are about evenly split between the highs and lows of the session. the dow is down 82 points or a quarter percent but the s&p up 7. the nasdaq is up 125 points on strong earnings and falling rates. let's check the sectors where communication services and consumer discretionary are leading the way, a tech heavy mix there. energy is down 3.7%. harle hee davidson, the gross profit margin dropped 3% but they highlighted stronger volume and maintained the core guidance expecting full-year motorcycle revenue to grow 30% to 35% hog shares stig up 8.5%, well
down from the may high and trying to snap a four-month losing streak. the payment stocks are under pressure after visa gave guidance for next year look at pfizer, down almost 13% today. visa down 5% for its part and mastercard down 6% fidelity national payment. again, visa and mastercard may be the best stocks of the 2010s, big question marks as there's so much competition finally bitcoin, down almost 5% today back below 60,000 by about 900 bucks, down 10% from the record high of 55,000 exactly a week ago the pro shares bitcoin strategy etf, ticker bito, lower today as well and down 10% since its debut last tuesday to tyler mathison for a cnbc news update. tyler. thank you very much. here is what is happening at this hour. i will take initial findings for $20. in santa fe, new mexico, law enforcement officials have given their initial findings on the
fatal movie set shooting involving alex baldwin authorities are recovering what they are calling a lead projectile they believe was fired from the gun that killed cinematographer halyna hutchins. the county sheriff says more work needs to be done before indictments can be considered. >> it is too early right now in the investigation to comment on charges at this point. the investigation will continue and if the sheriff's office determines during our investigation a crime has occurred and probable cause exists, arrest -- an arrest or arrests will be made and charges will be filed. on the new, ammo and guns also found on the movie set. where the investigation goes next at 7:00 tonight on the news with shep smith. nicholas christoph is running for governor of oregon, the state he grew up he left "the times" earlier this
month. he frequently wrote about economic and social problems in oregon he will run as a democrat in a primary that is already crowded. french bakeries are warning customers that baguette prices may call they say higher wheat and fuel costs are to blame prices expected to go up about a nickel to just over a dollar it may not seem like a lot but it is a big deal for the iconic french food staple over the past five years they have risen only about 25%. nothing beats it >> thank you very much, tyler mathison will ford drive down the same disappointing road as gm? will sun nova's results shine? it is all coming up in earnings exchange look at shares of royal dutch shell. the third point revealing a huge stake in the latest investor letter urging shell to separate into two companies, one kind of the old fossil fuel business and
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exchange where we get the action, the story and the trade on three key earnings reports coming up after the bell today's line-up, ford, ebay and sunnova. kick it off with ford. street expecting revenues around $38 billion, shares up nearly 80% this year as the company dives deeper into the ev world with huge demand for the f-150 all-electric lightning joining me is phil lebeau and our trader is danielle shea, vp of options at simply trading disappointing, talking about trying to catch up to tesla with gm what about ford? >> when you look at ford, two things stand out, what do they say about the chip crisis and cost pressure in near term, what kind of guide kwanls for the fourth quarter and, frankly, unless it is too the moon i think people will be disappointed which is what we saw with general motors. longer term, the question becomes are they still on track for the f-150 lightning and for the slew of electric vehicles they plan to roll out.
those are really the two areas that going to get the most attention from the earnings report, and then obviously the conference call. >> danielle, i know you are a big fan of tesla what about ford? >> so, you know, ford is actually my favorite automaker excluding tesla, of course, because i consider it more of a technology company looking at ford here, the price of the stock has risen so much this year and i think we will get a buy the room or sell the situation which would be a perfect opportunity to pick up shares i would love to pick up shares in ford around the $14 price point and i'm looking for an $80 price target if we get that move today, sell the news on earnings, pick up some shares, i think we will be good to go into next year. >> for our options friends, danielle, anything you would recommend in that vein >> so for options, friends, typically up at highs like this what i would do is sell a call credit spread or sell some calls. another thing you could do is sell some puts, especially if you are looking to pick up the shares at a lower price point. >> all right so there you have it
something a little simpler, to the point of simpler trading and something more complicated phil, we appreciate it thank you very much. our phil lebeau with the preview of what ford might say let's move to ebay the company has beater eps estimates every quarter in past two years as the pandemic drove big surges in ecommerce growth leaves ebay up against tough comps. ebay had a nice year with shares up more than 50% deidre bosa, how can they build on this in i wonder if they will have subliminal commentary about paypal's abandoned bid for pintrest >> yes, that could be very interesting. kelly, you also hit on the key question, can it keep this pandemic run going post-pandemic. the key metric will be gmv, that's gross merchandise volume. it will be a signal of that, but what will be really key here is its take rate. even if the volume number has increased, the take rate will be interesting because it will tell us how much their new payment system is helping them increase
profitability, and payments, interesting and ironic, of course, you alluded to this, kelly, because it used to be part of paypal or paypal was part of ebay, however you want to look at it. paypal may be looking at pintrest complicated way of saying that social commerce and payments, they are increasingly going together and ebay will really show you the benefit of this also a quick note on supply chain challenges ebay may actually be a beneficiary of this because there's saying, ebay never sells out so buyers may be turning to ebay if they can't find what they want on other platforms >> that's a really interesting point. i have heard the same case for some of the second-hand fashion platforms as well. all right. so tell me, danielle, what do you think about the stock? >> so i completely agree on all of those points. i really like the stock, but with this one as well i think it is trading a little bit high right now. so i wouldn't want to buy in here and even though ebay does historically beat on earnings, they also very frequently trade
lower post-earnings. so i think that would be an opportunity to pick up some shares, anywhere between the 70s, 73 price point i think would be a good bet. i'm looking at an $82 price target on this stock i think that the gig economy, the work from home, you know, everybody is trying to figure out why people don't want jobs, i mean consulting is on ebay, pintrest, etsy >> sure. >> i'm definitely a fan of the stock but i would prefer to buy at lower prices. >> just a quick question, danielle, taking a turn but a related one here we just showed the big drops in stocks like visa and mastercard today. they've been powerhouses over the past decade but there's so much competition in payments now. what would you do with those two names here what do you think about the trading action across the spectrum where some of the names are down 10%, 12%? >> they definitely have a lot of competition, and the fact of the matter is, you know, the younger generations, i mean they're going toward things like venmo so for me personally, i look towards square and i look towards paypal and i say, hey,
this is the way of the future. can visa and mastercard keep up? with visa in particular, it needs to hold above the $220 price point for me to be interested, but if we can see buyers come in and hold up above that level i think it should stabilize. >> all right it is a $219 and change right now so those are key areas to watch. deidre, thank you. our deidre bosa there as we weigh ebay after the bell. let's look at sunnova. the street is expecting a drop fellow solar company end phase, look at it now it is massively running after its earnings beat, up 27% today. that has sunnova up 7% let's bring in pippa stevens with more. pippa, we talked about this yesterday. these stocks tend to run in a group here >> yes, and you can see it with what is going on right now end phase is lifting the entire sector the company said they saw record demand they're navigating the supply
chain headwinds and looking for. they gave optimistic guidance. when it comes to the solar industry it is a stock-specific story. looking ahead to sunnova, shares are up more than 9% right now so there are expectations that we hear some optimism from them they said that they can navigate the current parts situation for the rest of the year, so next year's guidance will be really important, how they're navigating higher raw material costs. and then, of course, customer acquisition. they've been really busy lately. they expanded to 100 home depot, in home depot stores in four states that are storm prone. they're trying to target customers who might want to go just beyond solar and also look to things like storage yesterday they announced some partnership with charge point, so it speaks to this trend within the solar industry of moving beyond just roof top panels and to holistic suite of
products >> it is fascinating because at the same time look at what is happening, a third point pressuring shell to sort of get on board with sort of the future of renewables. danielle, you talked about how you are a fan of tesla as a technology play. do you mess with the solar stocks here? >> yes, i do you know what? i actually just got an end phase system installed in my house, and i think that the importance of pairing the battery with the solar system is absolutely critical when you are looking at sunnova, i think it will be an important factor right now i mean this company is pr pretty fresh, it is pretty new as far as earnings is concerned, we don't have a lot of amazing data yes, i think it is great they got into home depot and i think there's a lot of potential for growth here, but what i'm most interested in it for right here today is the fact it has 14% high/short interest and it is going into earnings. if they do, in fact, manage to have a positive earnings report, this could set off a really big short squeeze tomorrow that would absolutely be tradeable. if that does occur, even though
it would be on a gap up, i would still buy it just to trade the short squeeze, not necessarily the long-term play >> it is a great sort of reminder for a lot of people it is still about a trading and sentiment, sort of long-term investment for this space even if you have one in your house as you mentioned in the case of end phase. we will leave it there pippa, thank you we appreciate the reporting. pippa stevens. look forward to sunnova after the bell danielle, great to have you. still ahead, joe manchin defending the ultra wealthy saying they created a lot of jobs and he does not support the billionaire's tax. if he continues to hold out, can the democrats get anything done on the infrastructure bill funding front? the latest on the tax standoff nt. er, we listen. like jack. he wanted a streamlined version he could access anywhere, no download necessary. and kim. she wanted to execute a pre-set trade strategy in seconds.
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summit in scotland and he is leaving me tomorrow. ylan mui joins me. lots of headlines today. >> reporter: yes, kelly. there are a lot of questions about how the new tax proposals would work and they're coming from within the party. now, the legislative tax of the billionaire's income tax is out but joe manchin of west virginia did not sound sold on the idea this morning. >> people in the stratosphere, instead of penalizing them we should be pleased the country is able to produce the wealth i don't like the connotation we are targeting different people people have contributed to society, created a lot of jobs, invest a lot of money and give a lot to philanthropic pursuits. >> reporter: now, instead he floated the idea of a patriot tax that would require everyone to pay something every single year but he did not elaborate on how he would achieve that. there's also resistance to other revenue raisers like the bank reporting rules and international tax reform there's one idea however that is
gaining traction and that's the corporate minimum tax. democrats want to create a 15% rate for companies with over a billion dollars in profit. manchin said that's something everyone has agreed to and even arizona senator kyrsten sinema gave it her stamp of approval calling it a common sense step chuck schumer has said agreement is in reach and he wants a framew framework announced today but there's a lot of work to do. over to you. >> i wonder what the total number is for the bill and what programs are in it i believe manchin wassing talkig about health care and paid family leave out we talk about things that could be in it, expanded medicare, child care we talk about, but i don't know what is actually going to be in it. what is the main feature of this entire spending plan >> reporter: well, that is a
source of debate amongst democrats and presented them with a messaging problem to your point around paid family leave, i spoke with senator gillibrand and she didn't want to talk about what the contours might be because she needs to talk to senator manchin before she is willing to discuss details in public. democrats are trying to figure out what are the priorities here, how do they fund them, and it is contributing to the debate over what the size of the package should be and how they're going to message this and sell it to the american people >> i'm very, very curious to see if we get it today or in coming days or weeks what it looks like thank you. i'm sure it is not the last time we will see you in the next few hours. still ahead, down more than 11% over the past few days is a pharmaceutical company first, sinking in sympathy on novartis miss, and then its own results came to light. remember, you can catch the show any time, anywhere by listening
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exchange." shares of teva pharmaceuticals sinking today due in part to slowing sales in north america the world's largest generic drugmaker announced a $4 billion sustainably linked debt offering joining us is teva joorks mr. schultz me tirrell. >> cora, thanks for being with us today want to start with the quarter the stock is down on that miss as kelly mentioned but you sounded pretty upbeat on the call actually a note from bernstein that just came out cited what they call an odd gap between your results and your communications specifically that you still think you can meet your projections for your three biggest drugs. tell us your response to that reaction >> meg, it is great to be with you again. my reaction is really that we gave sensical and thoughtful guide apsz and why we are sticking to our guidance is of course because we are expecting to meet it it is not a big mystery how that happens. it is correct that we did reduce
our revenue guidance last time following the second quarter, and we also had a spend on the guidance from 250 to 270 per share. and we definitely expect meet that i think the reaction today is basically a combination of novartis wanting to potentially -- send us, yesterday, which gives a negative spin to the generic space. then you see us having basically stable earnings and stable revenues but no new major launches on generics that gives a negative spin to it compared to how we see it. we see a stable marketplace for our complex generics, so we remain confident in the generic space in the u.s. >> speaking of the novartis news yesterday what was your reaction they are untaking this strategic review for their generics business and how it could affect
tel aviva? >> it is not a surprise. it is a copy of what fiz herb did. you have old products, slightly dying products and you want to get them off your business so you will show more growth in your specialty business. i think that's what happened with pfizer and optton i think that's probably the thinking at novartis thun they will have better growth numbers i think that's really what's driving it. >> i want to ask about you as well you came into this role about four years ago you were talking about on the call the real focus was paying off debt righting the ship there. it has been a tough road bernstein also points out you have got a five-year contract, and there is going to be a lot of questions whether you are sticking around, what the succession plan is going to be what can you tell us >> first of all, i actually have a six-year contract because i had a five-year contract, but a while ago that was extended by a year so i have a six-year contract.
as you know, i set out long-term financial targets. i did that in the beginning of 2018 those targets are to be met at the end of 2023. we have a target of taking our net debt below three times ebitda we are firmly committed to that target we have a target of a 28% operating margin we are also firmly committed to that, and the 82% cash earnings. we are on track for this i think it is very, very likely we will meet these targets that's really re-establishing the company as a company without a threat from debt and with a solid profit and loss, solid margins, and ready to grow into the future and eventually some day start not just paying a lot of money to the bond holders we paid something like $16 million last year to the bond holders in interest rates and paying down the debts.
eventually we can pay the shareholders it is just a couple years more people have to be patient just a few more years, just like i am. >> on that question with debt you issued some notes today tying esg and sustainability initiatives. tell us about that strategy, what these bonds will enable you to do, and the focus on esg here >> yeah. so we are very proud to have done this. we are the first generic company in the world to issue these sustainability linked bonds where we have targets for access we have the starting point in some of the u.n. sustainability goals and what can we as a company do to help the world we are committed to the environment. we are committed to access specifically on access, being largest manufacturer of medicine in the world we can do a lot of good by securing the tension is medicines on the w.h.o.'s list of essential medicines that these medicines can get out to low and middle income countries.
each committed to get more products out to more countries to donate and supply more of these affordable high-quality medicines to the low and middle income countries that's a way to help society because with better health care you get better families, you get more stability, you get more education, and that long, long term improves condition in low and middle income countries. we are very happy about doing that. >> super. >> the act of refinancing is quite simple we sell some bonds, we take that money and buy other bonds. the reason why we do it is we have two big maturities in the coming years compared to our cash flow, our cash flow is somewhat above $2 billion a year that means we can pay down $2 billion every year which we have been doing over the last years so we can continue doing that. we have a couple of years that are $3 billion, $4 billion, so we are moving that out five, seven, eight years.
>> very, very interesting. we look forward to keeping track of it and talking to you at least two more years cora, thank you for talking with us. >> thank you for bringing that to us, our own meg tirrell. we have more after this, including developments on infrastructure bill. don't go anywhere. with directv stream, i can get live tv and on demand together. watch: serena williams... wonder woman.... serena... wonder woman... serena... wonder woman... ♪ ♪ ace. advantage!
breaking news out of washington ylan mui is back what's going on? >> kelly, house speaker nancy pelosi is announcing she wants to advance that social spending package by bringing it to the rules committee tomorrow for a hearing. now, that is a required step to -- for any package before it goes to the floor. and pelosi said that they are close to the agreement on the priorities and top line of the legislation and that they must have trust and confidence in an agreement for the build back better act however, lawmakers still do not know exactly what is in this package. but, this is an attempt by democratic leadership to
pressure those progressives into rallying around a framework for a deal so that lawmakers can pass this separate infrastructure bill before a critical highway funding deadline expires on october 31st here we have nancy pelosi trying to show that there is movement and progress on the social spending package, announcing that it will go before the rules committee tomorrow for a hearing. >> and the 31st, of course, as we all know s sunday that's a tight time line ylan mui, appreciate it. that does it for "the exchange," everybody. "power lunch" picks things up right now. ♪ thank you, kelly welcome, everybody, to "power lunch," i'm tyler mathisen here's what's ahead this hour. an electric future automakers battling to nominate the ev industry. tagts are aguess eff today, gm's ceo said her company can absolutely catch up with tesla. and target blackrock