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tv   The Exchange  CNBC  November 9, 2021 1:00pm-2:00pm EST

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>> you don't own paypal yet, this is the time the stumpble gives you an entry opportunity. this stock goes down a little bit before it turns around but it is a huge buying opportunity. >> penalty box, as cramer said, see if they do a buy back, listen there good to see everybody. we have disney earnings tomorrow we will talk about that and much more tomorrow. it does it for us. thanks for watching. "the exchange" is now. ♪ thank you very much, scott hi, everybody. i'm kelly evans and here is what is ahead this hour year-end risk management from elon without the eccentric to russia's google to no more vaccine fights our guest has three picks for your portfolio plus, it is time to buy crypto, food and clothes we've got the moves, the story and the trade on three key earnings tonight why our trader is bullish on coin baste, doordash and posh mark commodities out of favor with investors, essentially flat or lower over the past month could it be the perfect buying
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opportunity? goldman says yes and we will talk about that. first today's market, dom chu here with the most important numbers. >> the reasons they're saying the words super and cycle together a lot -- by the way, kelly, if you are looking for one place in the market that's been on a super cycle it has been the stock market. you could argue since the great financial crisis and the emergence from it ban in 2009, 2010 still at markets pulling back today. we hit, remember, record highs for all three major indices within the course of the last few trading days, but today down across the board off the session lows, at the session lows we were down about 30 -- call it 38 points or so, up about seven points, eight points again, at the high again, down 31, up 7 or 8 points in the s&p that's the trading range you can see there. 4678 there the dow is off one half of 1%. the nasdaq composite down two-thirds of 1% 15,877 the last trade there. one place we saw a record high
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in trading at one point is nvidia i will put the gold star even though you see red down 1.5%, well off session highs and it spiked huge at one point, mostly on headlines luminar technologies which makes self-driving car technology is up again, 18% off session highs. it inked a deal to be a partner on nvidia's new platform for self-driving cars. those two companies together had been very positive at one point today, so certainly one to watch. nvidia, by the way, may be due for a cooling off, it is if you are a statistical fan out there, greater than three standard deviations from the average price. it is cooling off a little bit right now. cryptocurrencies, you mentioned the big earnings reports after the closing bell well, coinbase is now down in the session right now. it had been up a little bit in the earlier in the day here. micro strategy as well down 1.5% meanwhile bitcoin and ethereum both hit record highs in trading
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today. bit bitcoin prices a bit below 66,900 keep an eye on the cryptocurrencies they've been hot for a while we will see if it translates into commentary for coin base when it reports earnings back to you. >> more on that soon thank you so much. stocks are retreating a bit after a surge in wholesale prices raised concerns about inflation. consumer price index jumped spnlt 6% in october. inflation will likely remain above the 2% target of the fed, but he has stock prices he says will perform well no matter which way rates go from here joining me, chief investment officer of summit global investments. david, welcome back. the most notable thing is the fact that ppi report was followed by a plunge in bond yields >> it has. and i think that this is -- you know, there's just some profit taking here going on i think in today's market, i do think forward, kelly appreciate you having me on your show again
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>> yeah. so obviously always good to check in with you. so do you want to make a call on rates? you know, i guess here is my point. it has been very easy to make the inflation call, but i don't think people expected this kind of reaction in the bond market i don't know if it is changing any of your recommendations. >> absolutely. i think the bonds have come down in the ten-year quite considerably i think we are hitting more lows in that space, and i would expect the bond yields to continue to go up. but the yield curve in general, i think the shorter end of the curve will go up a lot faster because of the inflation we are experiencing i still think the fed is behind the curve here in the sense that they are behind getting rates higher so i think shortened it goes up a lot faster than long end i see a flattening yield curve here, but definitely look for i think the ten-year to be going up, not necessarily down, which it has been over the last, you know, several trading sessions >> yeah. all right. let's talk about some of the stocks here. you've got some very pithy ways
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of describing them beginning with ford, elon without the eccentric you are saying ford is back above $20 for the first time since the year 2000 where do you see it going from here >> up. i think ford is a great buy, p/e less than ten, higher yield than the ten-year slightly high beta, yes, on ford everybody is out there talking about it but they have a lot of room to grow you look at their electric vehicles they're coming out with now, they have room to get out a real mustang electric vehicle that people really want to buy so i think you're seeing a lot of push here from ford into this space, and, like i say, this is the elon without the eccentric so to me if tesla is too expensive, if tesla is too wild, if the ceo is too crazy, then ford is the absolutely great play >> all right also you have the index, often called the russian google. merck, you like the pill sort of say it helps take the sting out of vaccine fights. you also like t. roe price >> t. roe price is a great
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company. they had a recent pull back off the charts, but i think it is a good opportunity to pick up their shares their earnings were not out of this world, but the acquisition of oak hills i think gives them a great position into the private capital space and the p/e space. current p/e on, you know, t. rowe at 16 yield good beta well so i think it is a really well-managed company with a great opportunity here with this acquisition. >> i notice the lack of sort of growth stocks, if we want to still call them that, big tech names here is there a reason for that >> well, not necessarily i thing your short-term is probably momentum. i see momentum taking the lead in the year-end, but the long-term trade i think it is time to build up the value exposure yes, some of those are outstanding, not that we don't hold some of the big names like amazon or what have you, intel, et cetera, or apple, but the reality is i think this is the time to build up some value. >> all right david, great to have you thank you again. david harden with summit global
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investments. >> thank you just had a pretty poor auction in the bond space of ten-year notes that is affecting yields let's bring in rick santelli rick >> it is not a very good auction. let's go through the internals 39 billion of ten-year notes auctioned off, top of the hour the grade i gave it, d-plus. dog-plus the yield was 1.444, the when issue market was trading 1.425, higher yield, lower price, right from pricing alone not a good grade. then you look at the internals bid to cover 2.35, the weakest since december 2020. the only bright spot, 71% on indirects in the dealers taking a bit less than ten auction average. it just wasn't a pretty auction. tomorrow we will have 25 billion 30-years right now if we were to close here at 142 in a ten-year, it would be the lowest close in nearly seven weeks going back to september 22nd of course, everybody is saying how can we possibly be down here when we have 8.6 year-over-year
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inflation on the producer price index? the highest ever for a year-over-year number. well, probably because those that are short aren't making any money. globally there's a lot of buying going on and some of the curve issues going on with most of the yield curves in the treasury complex at the flattest they've been, anywhere from three months out to almost two years. kelly, back to you >> all right gloomy, rick thank you so much. we appreciate it rick santelli at the cme let's get to a blockbuster announcement from ge today the shares are having the best day since july after the company announced it will split itself into three separate units over the next few years ge's struggles have been widely noted over the past two decades. in 2000 it was the most valuable company in the world with a market cap of nearly $700 billion. today it is roughly a fifth of that at around $120 billion. let's bring in david favor on what the historic announcement means for ge and investors >> a bright day for investors,
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as you said, and a sad long-term story although don't blame the current geo who told me earlier this morning he told me that the announced separation into aviation, energy and renewages and health care business will allow for greater focus for both customers and shareholders >> i think the logic is pretty straightforward. we know looking at spins elsewhere that the focus and the accountability in a structure like this always increase. we think we have an opportunity here as well to have sharper capital allocation and more strategic flexibility, and clearly this is a good thing for the teams in each of the businesses, both the teams we have today and the teams we need to recruit going forward given the discrete missions that each of the businesses will have. >> you know, in many ways for those of us who followed the company closely, kelly, not a huge surprise this would be the end result but mr. culp has been deliberate
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and continues to be so you indicated it in your introduction this is going to take years. next year -- i should say, excuse me, early 2023 is when ge health care is going to be a publicly traded company on its own, and then it is not until '24 you get renewable energy, power and digital. of course, what you are left with is that prized aviation businesses but, again, it goes back to this idea we've been talking about for years now, which is shrink to grow. they do expect every investment, every company to be investment grade. by the way, the board really took this up in a serious manner, i'm told only a few months ago. while they may not have looked necessarily to the blueprint of what united technologies did, kelly, you can't get too far away from the value that's been created there as well, as they spun off otis and they spun off carrier and then merged the remaining business with raytheon, creating a good amount of value over here, not as much
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the stock price started off very strong this morning, backing off a bit perhaps because of what is simply a long timeline to get it all done >> exactly it is up 3.5% now. it is not its best day, when it was up 9% it was the best day since july now we are talking about barely even and move higher what was the sort of history with -- for the utx example maybe? i mean how much of this gets priced in on the day of the announcement versus priced in as the details become a lot more clear in the years out >> you know, it can take a long time by the way, there's still so much to come i mean culp indicated that in what you heard from him there in terms of capital allocation, right. they want every business to be investment grade okay, that goes back to the cash flow characteristics of the business and how much debt it is going to have. but all of that is yet to come even names, while, you know, he said certainly they're going to pay homage to the ge brand, it wasn't clear they will all have the ge name. to your point there's a lot to come, but really the value in the utx split didn't occur until
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you actually saw carrier out there traded on its own and started to put up very strong numbers under the ceo, the same with otis. it can take quite sometime for the value to ultimately be delivered, but as we've seen, kelly, it also took quite some time for a lot of value to be destroyed. >> yeah, it did. there's so many beleaguered shareholders here. historic day, david. thank you for joining us david favor down at thenysc. >> sure. still ahead, wholesale prices surged in october, most in more than a decade. my next guest says the economy is experiencing a demand-driven shock and as a result the fed is behind the curve will doordash deliver and can posh meet the mark it is all ahead on today's earnings exchange where we preview three key names reporting after the bell we're back in a moment this is "the exchange" on cnbc
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just ask you to make sense of the falling bond yields for us today especially in a world that you've correctly described as being a demand-driven shock with the fed behind the curve how do you explain this decline? >> absolutely. it certainly looks bizarre on its face, but if we look at what's driving bond yields lower, it is really a drop in the real interest rate i think that at least, you know, over the last day or so that could be due to some speculation that fed governor brainard may be elevated to replace powell and she is viewed as more dovish what is happening with the drop in real rates is inflation expectations are actually moving up, and at the five-year horizon we are almost at 300 basis points, which, you know, would equal an all-time high, at least back to the late '90s when we had the tips market. so real rates, very low real rates are the main reason that bond yields are so low, and that can mean one of two things it can mean the u.s. economic
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fundamentals are very weak or it can make accommodative monetary policy in this case i think it means accommodative monetary policy and the federal reserve behind the curve. that's showing up in rising inflation expectations and it is also more consistent with the cyclical boom that we've seen, you know, with the unemployment rate collapsing to a succession of post-covid lows >> right so one of the other things that's been catching my attention is the all-time high in 30-year tips, in terms of the price, which is pushing that yield to historic lows >> right >> so in other words are you saying that the market is paying more and more and more for inflation protection now on a 30-year basis? >> yep, that's exactly what's happening. that's being reflected in those inflation break-even spreads, and those are at, you know, fairly high levels, at least relative to the last business cycle. we didn't see anything like 300 basis points tip spreads at the five-year horizon.
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so the bond market, despite these low yields, is pricing in an over-shoot of an average 2% inflation path we've already been well above 2% inflation, so, you know, the federal reserve is going to have to make a decision here in terms of how much they are going to allow price pressures to run >> one more question on this and then i want to get your investment implications. but, again, for those who see the headlines and go, okay, producer price is at the highest level in over a decade, the ten-year yield is barely above 1.4%, but like you are describing other market-based measures of inflation expectations and the cost of future inflation coverage are rising significantly so why isn't the ten-year bond yield moving higher or do you expect it to at some point >> yeah, i think eventually the fed is going to have to right the ship here and track the neutral interest rates the economy is recovering rapidly, the neutral interest rate will tend to rise
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if the fed fails to follow suit, then you have sustained inflationary pressure and we're already facing that, but, you know, we have a perception that most of the inflationary pressure is temporary and due to supply chain bottlenecks and so forth. but if overall nominal demand continues to run as strong as it has been running, then we're likely to see these inflationary pressures remain elevated and the fed will eventually have to address that by reducing liquidity and raising the short-term interest rate target. you know, at that juncture then real rates will have to move up. again, i'm not saying they have to be high, but probably not, you know, minus 100 basis points >> right >> you know, it doesn't make a lot of sense in an economy that's rapidly reapproaching full employment, if we're not already there. >> final question then let's talk about what it means for the market, which, you know, this is also what you are very good at translating. where do you think the stock market offers opportunity in this scenario that you are describing and where do you think the biggest risks are? >> yeah. that's an important question
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so, you know, the market has done phenomenally well because, as you noted, you know, rates are still very low despite rising inflation expectations, real rates are at a record low so the overall discount levels are low, profits are high, liquidity is high so it has been a strong tailwind for equity markets. in an environment where inflation rates are sustained at elevated levels and discount rates are going to be moving northward, it is really those high valuation stocks which would tend to be at risk they've still done pretty well this year, but we haven't had a really meaningful rise in the ten-year treasury yield this year either. during periods where the yield is moving up we tend to se value stocks outperforming, in the growth year more expensive names underperforming. if we end up in a situation where the economy is pretty powerful moving into next year and inflation is higher and the fed is going to be forced to move more quickly, i would be concerned about those areas that are really, you know, appearing
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to be frothy now, either driven by momentum or, you know, stan standing at extremely high valuations >> michael darda, thank you for joining me to explain it all we appreciate it >> thank you coming up, what did peloton, yoga mats, coffee makers and electric fireplaces have in common they're some of the thousands of item stuck on container ship anchored for weeks off the west coast hoping to dock and off load soon. we're live from the cop26 climate summit where the focus is shifting to science and innovation we will look at one company tackling essnsmiio at agriculture with climate tech. stay with us
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♪ welcome back to "the exchange." dow is about 100 points off session lows right now but still down 169 or half a percent and you could see consistent price action across all three major averages here are some of the movers we are watching this hour with hertz leading the way rejoining the nasdaq under ticker htz after emerging from bankruptcy in june, shares priced at the high end of th range at 29 but opened lower at 26.a 25, currently around 27 and change peloton lower after announcing a new training device. the stock sliding to a fresh 52-week low and now is down 46% this month and 71% from the all-time high in january pton is below $50 a share. paypal is shrinking after the company gave disappointing guidance for the fourth quarter. they are 35% off their all-time high still jim cramer thinks the pull back gives management an opportunity to put their money to work, saying in his investing
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club newsletter they should announce a buy back, that is if they're truly confident in how bright the company's future will be to access jim's insights sign up by pointing your phone's camera at the qr code on your screen or go to now to rahel solomon for the update here is what is happening at this hour. at least 13 top trump officials illegally campaigned important the president while in office according to a federal report from the office of special counsel led by a republican appointed by former president trump. the list includes former secretary of state mike pompeo, former chief of staff mark meadows and adviser kellyanne conway, who was cited for multiple violations. on the news, the january 6th panel intensifying its investigation of trump associates and their possible connections to the riots on capitol hill that's tonight at 7:00 eastern the justice department launching an environmental justice investigation. at issue here is whether alabama's wastewater disposal
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practices discriminate against certain black residents and put their health at greater risk it is the first-ever such investigation by the justice department and oklahoma supreme court has thrown out a $465 million opioid judgment against johnson & johnson. justices ruling that the state's public nuisance law shouldn't apply. quite the development. back to you. >> thank you very much, rahel solomon. coming up, coinbase is two for two as a public company but at robin hood's streak will its streak continue? doordash reported wider than expected losses in the past three quarter but will the launch of the nationwide delivery service be a game changer? the second-hand retailers showing signs of life again as some anticipate posh mark and thread up could have great holiday sales. tethhtl have the reports rig afr is
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♪ welcome back, everybody. it is time for earnings exchange today we're looking at coin base, doordash and posh marks results after the bell let's start with coin base where after taking a dive this summer the shares are up nearly 45% in the past month that's thanks to record highs in
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bitcoin and ethereum, bringing coin base above the ipo price. the company recently announced it will launch a marketplace for creating and trading nfts which some described as an arcane and difficult thing to do. kate rooney with the numbers to watch tonight, and matt joining us, a cnbc contributor and he will have the trades today kate, let's kick things off with the most important metrics for people to watch. >> kelly, i mentioned this yesterday with paypal, but, again, it is about the take rate so how much coin base is actually keeping of the trade when it comes to revenue, that's been coming down as trading gets more commoditized, a lot of analysts i have been talking to say it is key. they want to see how much pricing power of coinbase still has. are they feeling thepressure a there's more competition, you've got square, robin hood moving into the space big one to watch then the other big one is the revenue mix. so institutional versus retail trading. is it more retail traders, is it more big wigs and hedge funds? the funny thing about that, it
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used to be more about institutions, people got excited when they saw more institutional interest analysts i have been talking to lately say it is actually not great. they have a lot more pricing power when it comes to the retail trader. they don't pay as much, those institutions don't tend to pay as much to trade, and then trading revenue in general, how much comes from transaction-based revenue. so in q2 it was 95%. really that is their bread and butter for coinbase. they make the majority of their money on trading revenue if there's any sort of diversification, if they have any other line items that add significantly to revenue, that could be huge. the other thing, you mentioned it in a tease, it is a long-term vision but it is why wall street has been bullish on coinbase, the bull case as the long-term vaccination. and meta, get into the metaverse. >> interesting take rate revenue mix and revenue contributors in general. matt, we just saw obviously robin hood not benefitting as much as people would have assumed by bitcoin, maybe in part because there was less
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trading in doge or whatever. what is the trade tonight? >> well, i think one of the things we have to think about is what is the year-end trade it is funny because, you know, one of the reasons coinbase had fallen off after its ipo was that, you know, it was badly timed in terms of the price of bit coin and ethereum and the other ones were all falling at the time therefore, the trading really slowed down. well, it is picking back up now in a significant way of course, even though your margins may be shrinking a little bit you can make it up in volume one of the things i think is kind of interesting that people need to consider, at least on a th sh short-term basis between now and the end of the year. institutional traders become more short-term oriented because they think about what their bonus will be. what they like to do is go to things under owned we saw it last year as they piled into the energy stocks because that's where they could play catch-up with some of their performance or get further ahead of their bogey
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these cryptocurrencies are another area where they're very under owned, so if they keep rallying into the end of the year they will see a lot more volume of those things and it will help a coinbase so it is kind of a performance play thing after the first of the year, then you have to reconsider things because, you know, again these margin issues are going to start becoming a bigger issue. >> i would describe you as cautiously optimistic for coin here kate, what would yousay was th big reason why robin hood's crypto trading didn't measure up to what people were thinking >> so the cfo said it was really all about dogecoin that drove some of the excitement in q2 that fell off they didn't have the same viral cryptocurrency to drive results in q3, and then they said as far as a growth lever of adding new cryptocurrencies, they're just not going to do it he said there's too much regulatory uncertainty so they're really seeing that direct result, and he said it is almost impossible to forecast. so square has had the same issue, where just less
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volatility in general meant less trading volume and coinbase is likely going to see the same thing. one of the interestings things about coinbase is you can look at other third party metrics and see their daily trading volume a lot of analysts that cover the stock say we pretty much know that coinbase saw a slower q3. it will be interesting to see if there's a pickup while bitcoin recovers to 68,000 >> right >> any color on kind of what we're seeing right now heading into the end of the year they've got an interesting guidance where they layout multiple scenarios, so as much as we can kind of glean from that but it is a unique way of guiding. >> it is a multiple choice sort of exam. kate, we appreciate it we will move along to doordash, up 75% now since its spring lows. the company has seen strong growth, but its headwinds are more in terms of labor and competition from grubhub and uber eats. they just announced a national delivery in direct conversation with gold belly, selling food
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and resttail goods from local shops. you would think expectations are higher, right, deirdre bosa? >> yes, doordash managed the driver problem better than others in the gig economy. they have been able to grow revenue, gross order volume by triple digits throughout the pandemic so i think for this name it will be a question of demand, how sticky is delivery, growth the pandemic, is that going to last post-pandemic? really the next leg of growth for this company and all of the delivery companies is how much are they actually owning, how much vertical integration to fulfill that instant delivery or same-day delivery? this is where they're all moving to that's capital intensive, but tony shoo is very well-liked in the industry he is moving into growth -- you mentioned a number of other partnerships expectations are high and because of valuation, it is valued so much higher than say uber or grubhub. >> true, and its performance
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lately has borne it out. usually, matt, it is near a key technical juncture what is that >> right now the stock has dropped below its kind of trend line going back several months, but it really hasn't broken down in a major way yet what we're looking at right now is to see how it reacts to these earnings reports, because if it can bounceback -- i'm looking at the 50-day moving average that had been a key support level for four or five months leading into october and then it broke low that level, and so that old support level became new resistance. we got right back up to that early november, didn't break it. so can we bounce back and get back above that level? that's going to be very bullish. if, however, it rolls back-over-and breaks below that, you know, it is already getting below the 190 level. >> exactly >> you get much further below, it is going to cause problems. i must admit i was at a wedding this weekend with a bunch of my nieces and nephews, they said they will be buying food from -- having it delivered forever. so i must admit i'm a little more bullish than i had been
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going into this. >> deirdre, i'm a frustrated -- i am a wannabe doordasher but it is just so expensive and stuff is wrong and then it is cold you know - >> are you using something else? >> yeah, my kitchen, you know. i would be happy to be a doordash customer. i would love to be one, but i just -- as much as i don't like to cook, ordering out seems worse. >> well, kelly, they're betting on you to order things like diapers and skin care and all of that other stuff that you can't cook and that you may need within just a few hours from centers. so maybe they won't have you for restaurants but they're hoping they will have you on a bunch of other products, and your kids of course >> apologies to everyone at target 8:00 p.m. last night when i was trying to get the diaper boxes in the back in the middle. it was not pleasant. matt, to your point, it is below 190. you said that level makes you more cautious on the name. we're at 188 today we will see where it goes off the earnings report. deirdre, thanks. we will check in with you soon,
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deirdre bosa finally today let's talk posh mark. they are expected to post another loss this quarter. shares are down more than 30% in the past three months, but some believe the company and others like thredup could be insulated from supply chain issues versus traditional retailers this holiday season let's bring in courtney reagan court, with what people are watching for tonight >> yes, you know, kelly, i think as you mentioned we are expected to see another loss from posh mark, but the path to profitability is going to be something that investors are really keyed in on, to see if we get updates there. the reel reel last night did say starting next quarter they will give us a more definitive timeline for the plan from them. i think that's what many are hoping for from poshmark as well it is ebitda, and it is closest of the three getting to the profitability because it is asset light. if you think about poshmark
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compared to the other two, it is much like an ebay with a social component than the other two because if you are selling on boschm poshmark you physically retain ownership until a seller wants to buy them from you, and then you are in charge of packing it up, shipping it out and the buyer is paying for the shipping cost basically poshmark is giving you a marketplace, so they don't have the heavy costs of distribution centers and shipping because that's really born by the buyers and the sellers. i have to admit, kelly, i am skeptical about secondhand being a popular destination for holiday gifts. i have bought and sold on these platforms myself, but, for me or for my kiddo i don't know if iwould feel super comfortable buying a gift for someone else from one of these platforms unless it was one of those new-with-tags items. you also can't return on poshmark so that makes it trickier too for a gift give >> especially for sizing that's a great point i'm looking at the stock as you
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describe it, around $24. matt, you are watching if it breaks below $23 or above $27, is that right? >> yes, i mean it has been stuck in a sideways range for a couple of months now, we are closer to the lower end of the range but hopefully we will see if it is a catalyst to take it higher that $27 or wherever it is stuck, stays in that sideways range. for a couple of weeks is one thing but for a couple of months like this one has, whenever it finally breaks out of the range it really moves in a significant way. so really this could be a cat list for a very important move we will have to keep a close eye on it after the report >> showing a reminder, year-to-date performance under water and not expected to report a profit i want to note that when we call it earnings exchange courtney reagan, thank you for the preview tonight. matt mialey joining us. walk-ins not welcome at the ports. we will slook at the troubles a
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them, in fact 21 of them you have 17 vessels in the -- awaiting for the port of los angeles, five waiting for the port of long beach what happens is these vessels are giving the port 96 hours in advance saying, hey, i'm here, and then they have to anchor so this is adding to the congestion we are seeing at the
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ports. >> and these are generally smaller vessels that aren't -- you know, so we named some of the merchandise that might be on these container ships. >> yeah. >> explain who this affects mostly >> this affects any u.s. importer really. you know, these range anywhere from, say, like 1,200 containers to almost 9,000 containers, but every retailer is using them what happens is there's really no rule against what we're seeing >> there's no regulation about it >> absolutely not, and there's a glitch in the system, and it is really ironic because we have the biden administration putting pressure on the ports to do this and here is the glitch u.s. customs gets the manifests of these vessels about 30 days in advance and then you have the u.s. ports that only get 96 hours. u.s. customs don't share this data with the ports. it is insane how can you plan >> you know, you covered this beat so well but there are so many people who are waking up to just how fragmented and old-world shipping is. you wonder if this should be an
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example when the biden administration is looking for things to change in this crisis, if this should be one of the things that changes. >> absolutely. it is funny. anybody that's in the industry is like thanks goodness, you know, you're reporting on this because it is a massive problem. >> and we talked about some of the items that would, you know, sort of be affected by the containers 77 ships, a record high, means, you know, this problem is as bad as it has ever been. what has the change to 24/7 operations, if it has even been put into place, how has it helped if it helped at this point? >> there's only one terminal out of all of the terminals between the two ports that are 24/7. there are still 30% of the appointments not being taken, but that's because there are inherent problems in the ports that aren't being fixed. gene siroco told me they're able to move out more of the containers the last time we were on we still had a bunch that were accruing the penalty and they still are, but they are slowly moving out >> final question in terms of that penalty then. how many people are paying it and has it been making a
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difference i think it was $100 a day, right? >> it is $100 for every day. an announcement will be made in the next several days or so if they're going to implement it based on how many containers go through. when you have all of these containers waiting, you have items like target, paul mitchell systems, you know, they just had 1,600 containers waiting on one of the unscheduled vessels, but the problem is people are paying big bucks for these vessels and they don't have an appointment date it is insane so you've got keurig, 55 containers full of those just for target and then holiday items. these are items the retailers want to sale and they can't because they're on floating storage. >> that's amazing. who would have known all of the problems exist in the way things are run. thank you for joining us, appreciate it. don't fear the taper or at least higher rates, that's what goldman is telling commodity investors as the fed gets a bit
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a hair with powell saying he expects it to last well into 2022 no guidance yet on future rate hikes, but goldman is telling commodity investors not to fear this fed and it is a great time to buy the recent pull back in metals for the long term they are saying commodities will be the best inflation hedge in the coming the recent pullback in metals. they're saying commodities will be the best inflation hedge and joining me now is damien, head of energy research at goldman sachs. great to have you back i almost want to ask you to rank your commodities one to ten, most to least favorite, mostly because i'm curious to where oil would fall on that list. >> sure. i think it's important to emphasize when 2021 was the demand recovery, 2022 commodities will be the structural repricing so we're looking for commodities where we're not seeing a sufficient supply. on top of that list will be oil and copper markets we're at low inventories and we're yet to see that
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meaningful ramp up in activity whether it's current projects, future projects to meet growing demand those are really are two favorites here >> what would you say to traders who go, you know, with crude acting as strong as it was a month ago, what's plaguing it? i don't want to make too much of the price action we're still at 83.5 for wti. >> there's short-term volatility there was the debate on whether the u.s. will release barrels from the spr that's probably unlikely in the short-term, but that's the threat in late november, we have the restart of the negotiations of iran how tight is the gas market? how much is that supporting oil demand all those cross currents which create this near term volatility average above $80 for several months now, we're not seeing the big supply a year from now the price, $7, even lower that's not the right incentive
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price. those have to go higher to finally solve the deficit. >> remind me where your price target is? you're saying that basically oil and copper are the tightest physical markets right now so any increase in demand that doesn't see an increase should drive prices higher. you guys are not actually as bullish on natural gas could you explain why? >> yes so natural gas is definitely in a big deficit today and nothing's really been resolved for the winter the market, especially in europe, is selling off, but those russian ones are still well below where they should be. that it's near term, very real risk, but at the end of winter, demand natural recedes some of the supply disruptions we had last year improve so that from perspective, the gas trade is a fade by next spring
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again, nothing resolved, but that's how it plays out. that's very different from oil the issue of oil are not seasonal not due to winter weather. they're structural and that's why we fear there's a opportunity here in the oil market and copper >> the nat gas is below $5 there as you were describing that. is that because supply is coming online more quickly than it is with oil >> so, u.s. especially gas has sold off today two drivers. the weather forecasts are not colder than normal slightly warmer. and u.s. production beating to the upside as well that's pretty u.s.-specific, right? we have short cycle supply the rest of the world doesn't have that. that can explain the divergence between the u.s. and the rest of the world and with these concerns about the u.n. gas market, sure, very cold weather will mean higher prices, but the real risk of a shortage that has a negative impact on economic growth is much more pressing in europe than here >> yeah, we are relieved for
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that we hope it doesn't get really bad in my parts of the world this winter. it's 65 degrees in new york here today. great to have you on today thank you. from goldman sachs up next, as countries and corporations at the cop26, we're heading out to the fm arfor a look at how one company is reducing agricultural waste emissions. we'll be right back. help me with scheduling? sure thing. up top. high thryv! payments? high thryv! promotions? high thryv! email marketing? almost there, hold on. wait for it. high thryv! manage my customer list? can do. will do. high thryv! post on social media? hash-tag high thryv my friend! get a free demo at what's strong with me? what's strong with me? hash-tag high thryv my friend!
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welcome back carbon capture is all the rage when it comes to climate innovation, but does it work diana olick has a look at how one company is trying to use tech to battle climate change. diana? >> agricultural is a great absorber of carbon, but when the plants die, it's hard to release out into the atmosphere. enter charm industrial
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a carbon capture startup that gathers up the waste or biomass, like these almond shells, then grinds it up, oils it and turns it into an oil which they then shoot deep underground >> we can capture some of that co 2 before it gets reemitted and put it back under ground so it reduced fossil emissions that are still happening all around us >> customers of charm include microsoft, shopify, square, and stripe brian is here meeting with industry and government leaders, like strike's head of climate. over the weekend, at a scottish sheep farm >> we're very focused on delivery and changing the narrative around the industry to one of delivery. but we do need to also scale up demand and supply and there's a lot to figure out. >> these companies use charm's removal as a credit to off set
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their own carbon emissions as the markets ramp up, it is industries like this that stand to make big green. >> it's interesting to see if that will work in the agricultural space when it comes to power plants, it's been more difficult for carbon capture to work >> we saw a company that uses these enormous fans to suck carbon out of the air and heat it then it can liquefy and they can put it into other things like coca-cola, use it as bubbles. it needs more money. it needs to scale much bigger than it is now to have a real impact z >> it is true. the big soda, anyone making carbonated drinks needs access to that. i think there was a shortage in the past couple of months. so much to cover, very, very busy week. we really appreciate you joining us that does it for the change,
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everybody. thank you so much for tuning in, but don't go anywhere because "power lunch" begins right now yes, indeed, it does welcome, everybody, to "power lunch. here's what's ahead on a tuesday afternoon for you. inside the chip battle from luminar to meta. semi companies are landing big partners in the hopes of dominating big industries. so is the strategy a winning one for investors like you and which companies could be left behind plus, deck demand. trek shares hitting an all-time high on strong quarterly numbers. we'll ask the ceo if the great outdoors trade is just getting started. and if wages are up and workers have leverage, unemployment is down, why do americans think the economy's so lousy? we're going to explore that in just a few minutes >> thanks. hi, everybody, and welcome to "power lunch." markets continue to slide


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