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tv   The Exchange  CNBC  November 12, 2021 1:00pm-2:00pm EST

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>> dr. j., why do you finish it up >> scott, jw nordstrom you get to play this one into black friday it is all the way out in december at the 35 strike. i bought the calls during the show >> i appreciate it hope you have a great weekend. thanks for watching. looks like we will break the winning streak for stocks, we will see though. "the exchange" begins right now. ♪ and thank you, scott welcome, everybody i'll alyssa lee. here is what is ahead. stick a fork in the tech trade, that's wells fargo's new message to investors following this week's inflation data. we will speak to the strategist behind the call on where to invest right now plus, green thumb, green stock shares of green thumb jumping after doubling products, the company continuing to scale its business in the u.s. we will speak to the ceo about the state of the industry. earnings exchange from preprofit companies to american staples to high-growth names we have the action, the story and the trade on we work, walmart and nvidia
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beginning with market action with dom shoo with the numbers >> it is pretty green. we might break a weekly losing streak, but today right now predominantly in the green you can see the s&p 500 up about 27 points, 4676 the last trade there. at the highs of the day we were up roughly 34 points at the lows, up one. you can see generally speaking positive and tilting toward the high end of things right now one third of 1% gains for the dow industrials. 15824, three-quarters of 1% gains for the nasdaq composite here is the action for the week in terms of s&p 500500 sectors we saw outperformance overall in materials. the best performing sector over the course of the week, up about 2.5% meanwhile energy and consumer discretionary, two of the performing sectors things are still shaking out right now, however the consumer discretionary trade was driven in large part by a lot of weakness in tesla shares early on in the week so volatility in
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tesla trying to gain its momentum to the upside, playing out in the consumer discretionary trade. speaking of consumer discretionary, tesla a part of the story. still, electric vehicle makers over the course of the week have been real ones to watch, not just because rivian automotive was up 29% in its first day, 22% today, now up another 4%. by the way it puts its market cap at just about $109 billion overall. still, tesla is the big dog out there, down 3.5% it is wort about 1.03 trillion lucid, nio and fisker and other makers down on the day as well rivian standing out right now. you wonder whether it is drawing more of the capital and attention from other parts of the ev trade into the rivian trade. we will see if it lasts. back to you. >> dom, thank you. it certainly has been a wild week for treasuries with yields surging after wednesday as hot inflation data
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rick santelli with the details rick >> melissa lee, you know, you tell me, is this transitory or stagflation-ish? here is the chart, university of michigan sentiment we are including our preliminary november reed, 66.8 today, which is the softest in ten years. you contrast that with the highest inflation on the one-year expectations in 13 years. this comes on top of already hot inflation data this week if you look at how the markets have moved, here is one week of five-year note yields. currently at 123 only up one basis point on the day. so on the day we see some steepening, but on the week they're up 17 basis points you look to the longest maturity at 30-year bond, right now at 196, it is up six basis points on the day so there's your steepening but on the week, on the week it is only up six so what are we seeing here what we're seeing is, in
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general, that the five-year, three-year, two-year to short maturities have been aggressively selling off now it is time to see how the inflation affects long-dated treasuries finally the euro currencies, 57.6% of the dollar index. both are at extremes we haven't seen since july. 16 months. here is a chart of the euro versus the dollar, and you can see the weakness now it is just a question of what is the big driver here. weakness in europe due to the ecb's policy outlook or the dollar's strength fighting inflation in the face of fed policy that certainly doesn't seem very aggressive in terms of raising rates. melissa lee, back to you >> thank you, rick santelli. those rates rose this week the tech sector fell the nasdaq the worst performing, down more than 1%, and a number of etfs catering to high-growth names, also down our next guest thinks it is time to put a fork in the tech trade left's bring in christopher
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harvey, head of equity strategy at wells fargo securities. great to see you >> it is great to see you too, melissa. >> let me get this straight. about a month ago you were recommending technology. fast forward a month and here you are saying the tech trade is over one month ago the ten-year yield was approximately where it is now, chris what has changed in that past month? >> melissa, when you are looking at rates you really have to look below the surface, and you have break evens which are inflation expectation and real rates what has happened is real rates have gone down 30, 35 basis points they're a key indication what the market thinks about growth the market thought growth would come down. to rick's point, there's more and more talk about stagflation. with regard to the tech trade, we thought the market was going to bounce. we thought tech would lead the way. whatwe've seen over that time is semis are up 20%, 25% software is up 10%, 15%. those are great numbers. we want to take that money, we want to recycle it into something more cyclical, we want to recycle into momentum
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one of the things driving us is we think real rates have bottomed if real rates have bottomed it is a key indicator cyclicals will begin to work and growth in technology will slow down. that's the kiwi are talking about. it is not so much things will be terrible, it is take the money and recycle it and the market is telling you that it may be time to switch into sickcyclicals. >> we tell customers if they're looking for something in the cyclical space, communication makes a lot of sense to us it has under performed, it has nice value and can work in a rising rate environment. we like semis more than software we downgraded software at the end of september we made a trading call on tech back in october, but we would stay away from software because it is really not all that cyclical it is a crowded trade. it is a consensus long, and we
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think it will be one that will have a hard time working going forward. >> so it really sounds, chris, like it is not necessarily a sector call. it is really a valuation call. you want to be out of the higher value parts of the tech trade, but you are willing to be in this, quote, unquote, value areas of the tech trade? >> melissa, i think that's fair. what we really want to do is we want cyclicals, we want momentum and things that are working. overall we find more of that in things like the communication space, things in the momentum space. things like financials look more interesting to us. but within technology, yes, we do have a buys for more cyclicals and that would be semis over software. >> i want your outlook for next year it is not very good, chris you think we will be negative next year. so what happens? what is the backdrop to that call >> all right so, melissa, yeah, i'm sorry about that so we are talking about equity market meltdown. we are at 4800, a little more than 4800 this year. we think this is a period where
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irrationality becomes more rational we're late in the cycle. the market has bent and not broken underlying fundamentals are still pretty good so we should see a melt-up. as we roll into 2022, if we get the melt-up call you are making the market or the foundation less stable, but what you are also looking at is growth decelerating you are looking at tapering or the fed becoming less accommodative with tapering ending and perhaps rates going higher furthermore credit spreads are pretty site which is an indication we are late or getting late in a cycle. tippicl typically we will move up in quality, start looking for monls for the opportunities. so enjoy the party while it lasts but it is not going to last forever >> how does inflation figure into the forecast, chris >> so what we think about
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inflation, and inflation is elevated, we will have spikes. we are seeing some of those spikes right now we do think that 2.25, 2.5 makes sense. we think there will be upward pressure on rates, and we think what rick was saying before. the bond market is telling you very loudly stagflation, and the narrative is simply this inflation is going to eat into growth it is going to eat into consumer spending and sentiment the fed is going to be too late, so the economy isgoing to be slowing down when the fed starts raising rates and that's a bit of a disaster. now, that's not particularly our view, but we do see things slowing down we are worried about inflation, and i have never seen pricing this strong in my entire career. i used to ask my client -- excuse me. i used to ask my associates, give me a few names where they're raising price and my associates are now saying to me, just pick a name, everybody is raising price across the board this is a very inflationary environment. this is something we will have to deal with for sometime and we do have to start worrying about
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it we didn't have to worry about it this quarter, but as we go forward in time we have to start worrying about margins and the influence of margins with regard to inflation >> yeah. already seeing the impact on consumer sentiment chris, good to see you thank you. have a good weekend. chris harvey >> good to see you thank you. bitcoin paring its loss. bob pisani is here with the details. bob, why >> it is simple. the sec rejected a bitcoin application on grounds they have repeatedly used in past filings. they say that approving the application would not be consistent with the goals of running security exchanges, that this application fails to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest. they have repeatedly said this over several years gentzler, as we know, has approved two bitcoin feets etfs on the grounds that a futures
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etf exists in a so-called regulated space whereas exchanges that would operate a pure play bitcoin etf do not at least they don't yet. that's the heart of this whole problem, melissa gentzler does not believe he has clear authority to regulate aspects of the crypto world that he needs to police a bitcoin etf. okay when is he going to get it that's the problem nobody knows it is not clear. given there are so many agencies potentially involved, and not just the cftc but even the treasury department, it is unlikely the sec will simply be able to begin a big power grab and simply claim authority over all of the coins in the world and all of the crypto exchanges without some kind of objections from other agencies. so most feel national legislation is going to be necessary, but who knows when that might happen? we just don't know in the meantime, there are many other bitcoin etfs coming up they too likely will be rejected the only good news for bitcoin
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enthusiasts is that the bitcoin futures etf has done well, gathering over $1.2 billion in assets it has had healthy trading but it is small comfort to the crypto enthusiasts who will be disappointed the gentzler who taught crypto at m.i.t. is not seeing things the way they do. >> he had a blockchain course at m.i.t. everybody thought he would be a friend of the industry and here we are >> that's right. >> it sounds like the way you are putting it it is unlikely we will see this etf any time soon, if ever. >> yes well, until there's regulation it is a very simple problem. gentzler has been consistent, in fact his predecessor was, too, very consistent. we don't control the regulation. we need regulatory authority if we make a power grab, cftc, other agencies are going to object we need to sort this out who is in control of what right now? if you believe that is the primary issue, and it is, they've made it very clear, then they're not going to do anything
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until they get that control. therefore, i think -- i have known people who think it will be years before this happens now, i hope not because we need national legislation we need the national crypto act to clearly delineate where we want to go with bitcoin, where we want to go with crypto in general, but it seems like we can't even pass legislation to raise the debt ceiling this is a major, important problem for the country, and i think the crypto people are going, frankly, pulling their hair out about it. >> i agree we are way behind the times when it comes to legislation to match the innovation coming up, the cannabis industry has high hopes for u.s. legalization with more than 20 governors this week asking congress to open up the banking system to the industry how should investors think about the market we will speak to the founder and ceo of green thumb industries next plus, we are looking forward to key names reporting across parts of the economy, returning to the office with we work, an
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inflationary indicator with walmart and with one of the highest growth stocks with nvidia back right after this. this is "the exchange" on cnbc 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!
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♪ green thumb industries jumping nearly 30% this week after reporting third quarter
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earnings this comes as more and more markets are opening up marijuana is now fully legal in 18 states with major additions like new york and new jersey, but recent skepticism from wall street has given investors pause, jpmorgan going so far as to restrict trading in some marijuana-related businesses joining us is ceo ben cobler good to see you again. >> thank you for having me >> i want to talk about what drove stocks starting from last friday, and that is leaked legislation that would deschedule marijuana i wonder what you hear about that, what the status is in your view >> thanks. i'm not hearing a lot. we are focused inside the business on the execution and what will happen in d.c. doesn't have a ton of impact on the ground for american consumers, but the business and stock are often not connected. i think that's what you have seen there's optimism, there is going to be a press conference on monday and we will tune in >> yeah. i mean i know you are focused on
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the business but it could have serious implications for your business in terms of how you operate and how you are traded, and this sort of dovetails that bit of news earlier this week about some brokerages, some prime brokers limited the trading activity of u.s. list -- or u.s. cannabis stocks, whether they're listed here or in canada i am wondering, in your view how much of the flood gates do open when marijuana is descheduled? >> sure. it is a great question, and there's always noise in the capital markets and banks and things like that i think the key with green thumb is we have built the business to prosper independent of federal change we are not waiting for the change in order to do something, which means serve tens of thousands of customers each day with branded product at the same time the fact green thumb industries is not listed on the new york stock exchange does not make any sense. we are an american company employing thousands of americans and u.s. exchanges available for u.s. investors at places like
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robinhood and places like that we think before the federal does that, we should get the 40,000 people in jail related to cannabis, get them out on the ground the business is strong, a lot of growth, profitability. we have free cash flow from operations and we're excited about the future >> your margins are outpacing your peers according to a lot of analysts that cover you. i wonder what is the driver, especially at a time across industries whether it be cannabis, retail or what have you, margins are getting compressed because of things like wage inflation and cost to transport is higher, energy costs, et cetera how do you keep those costs in check? >> yeah, certainly those latter factors are important for us, but if you just zoom out, we are investing on the verge of prohibition 2.0. the cannabis industry is going to be an $80 billion industry in the u.s., and so we've ben focused since i started the business in 2014 on the return
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of invested capital, how do we turn one into three into five and create that momentum i think you are starting to see that begin to show up in our business it is going to show up in where the capital is going and what will happen in the u.s. in 2023, 2024 and beyond. and in terms of the current term margins, which i think is your question, we are 100% focused on high-quality branded product that american consumers really like and can trust >> in terms of understanding the opportunity, and you gave us a big number when it comes to being the next prohibition, ben, how key is federal decriminalization or descheduling of marijuana to that estimate? >> for green thumb it is not >> okay. >> look at a state like colorado where its run rate, you know, over $2 billion year in and year out. you are seeing state governors, republicans and democrats, in favor of huge state tax revenue. cannabis industry is producing larger state taxes than alcohol state taxes, and massive job creation so what happens in d.c., like i said, is a trailing indicator.
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the real action is with the governors and in the states where people want jobs and american consumers want cannabis for well-being >> all right bruce -- ben, excuse me, great to see you thanks so much green thumb up 8% right now. >> thanks. still ahead, jnl j&j announcing plans to split into two days after ge's breakup announcement what is behind the move and why now? we have the details. plus, union workers at deere on strike after walking off the side can they reach a deal before farmers are forced to pay a praise the latest on the state of the nation is next "the exchange" back after this . but we need something better. that's easily adjustable has no penalties or advisory fee. and we can monitor to see that we're on track. like schwab intelligent income. schwab! introducing schwab intelligent income. a simple, modern way to pay yourself from your portfolio. oh, that's cool... i mean, we don't have that.
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♪ welcome back to "the exchange."
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stocks on pace to snap a five-week winning streak after wednesday's hotter-than-expected inflation reading. the dow is up 137 points, a third of a percent s&p is up 27, about half a percent there. the nasdaq is up by .8%. china's internet k web is on pace for the best week since january, still 50% off the all-time high. jd.com, ali baba among leaders in the group sticking with retail, best buy hitting a record high and on pace for the seventh straight week of gain, longest streak since 2018 shares up are more than 20%, versus an 8% gain for xrt. shares of johnson & johnson slightly higher after announcing plans to split into two companies. more on that story from meg tirrell. >> hey, melissa. j&j plans to separate out the consumer health care business into a publicly traded company
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sometime within the next 18 to 24 months. this, of course, are some of the grand j&j is best known for. johnson's baby, neutrogena, tylenol and band-aid all will become their own separate business, a $15 billion business compared with the $77 billion pharma and med tech business that will be left behind that business has the high-growth drugs for prescription drugs as well as medical devices which has been seeing a recovery since getting hit extremely hard during the pandemic the ceo joined "squawk box" this morning and predicted recovery going forward. here is what he said >> we do anticipate that the pent-up demand will be working its way back through the system. we are seeing signs of that as we speak, particularly here in the united states but also in europe and other places around the world. again, we think that represents significant opportunity, not only as we head into 2022 but in years beyond as well >> more broadly though, this
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move for j&j follows a lot of breakups within health care, kind of slimming down and really focusing on drugs. going back to the abbott abbvie split in 2013, also that year pfizer splitting off its animal health business. merck in 2014 selling its consumer unit to buyer for $14 billion. lilly following suit, separating its animal health business in 2018 jsk, of course, in the middle of separating out its consumer health care business now after it formed a jv with pfizer on that this is something that pharmaceutical companies and the conglomerates have been doing over the past decade, slimming down sort of a form of financial engineering but j&j says it makes strategic sense. >> it makes sense to unlock value. if you look at j & j's valuation compared to, let's say, a pfizer, i'm not sure if it is the closest comparable but there's a valuation gap there. theoretically it should unlock that valuation a bit my question is on the consumer business obviously the slower-growth
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business, as you outlined, some of the consumer businesses have been sold, not necessarily spun-off as stand-alone businesses what do you think ultimately happens? does the market want a business out there with tylenol and band-aids, et cetera is there an appetite for that kind of company? >> it is a really great question, does this live by itself as a stand-alone business after this and what does the growth look like it has been growing more slowly than the rest of j & j's business i think on a comparable basis it might grow faster than other consumer brands, but i was talking with eric gordan at the university of michigan who suggested that these brands may not be as profitable maybe a decade down the line as there's just more online sort of competition for maybe store brands and things like that. so it will be interesting to see sort of the future of this as it separates out. >> all right meg, thanks. meg tirrell. let's get to rahel solomon for a cnbc news update rahel. >> hi, melissa here is what is happening at this hour. mark meadows is a no-show for his scheduled deposition today
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before the house committee investigating the january 6th capitol attack that's according to nbc news citing sources a lawyer for donald trump's final chief of staff has suggested that meadows would not cooperate because trump told him not to, citing executive privilege. it is likely the fight will now go to the courts the nomination of robert kaleb to be the next fda chairman is already in trouble even as the white house was announcing it, democratic senator joe manchin announced he is against it. manchin says his ties to the pharmaceutical industry would hurt efforts to contain the nation's opioid epidemic biden will need at least one republican to get him approved in the almost evenly divided senate homer plessy may be getting a pardon from the state of louisiana if the governor goes along with the state recommendation he is compared to rosa parks he sat in a white's only train car. he wasn't successful
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1896 confirmed the concept of separate but equal in other news tonight on "the news" a close-up look at taylor swift's challenge to the music industry you're up to date. back to you. >> thank you coming up, the flop trade, the classic trade and the spicy trade. we will get key numbers to watch and how to be positioned aad wework, walmart and nvidia next week. "the exchange" will be right back it's another day. and anything could happen. it could be the day you welcome 1,200 guests and all their devices. or it could be the day there's a cyberthreat.
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♪ welcome back time for earnings exchange with some of the big names set to report next week, we are focusing on three key themes in the market, the pre-profit trade, value trade and growth trade. wework is set to report for the first time since the spac last month. can the company provide a viable path forward on tuesday the walmart, the classic value trade. can the retail joint provide clues to the trades. then nvidia, can its massive run continue let's kick it off with wework, the company having a rough go of things after initially filed -- went public last week via spac last month shares spiked on the first day of trading but slid more than
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11% in just three weeks. is there any hope for this pre-revenue company that's trying to come out of a challenging time, shall we pud it kate rooney is here with the story along with gina sanchez, cnbc contributor for "the trade. kate, what should we expect here >> investors are looking at net income at the end of q2 the company was still losing billions of dollars when it comes to net income and we really had a tough time during the pandemic. so investors are seeing can the company cut costs at a rate that will keep up with the valuation, even though the stock has been trading below $10. analysts are still looking for any key sign to justify its current valuation, at least when you compare it to a company like regis. it really historically has had to convince investors it is worth more than its shared workplace comp, which is regis the other thing is member growth occupancy is big it told investors at one point it would reach 70% occupancy by the end of this year that's when they really break
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even in terms of adjusted ebitda there are some adjusted metrics. i'm told look at net losses though, and it is not the company thatadam newman built. there's an entirely new leadership steeped in real estate any commentary from the new leadership, sort of the vision going forward for the new version of wework. >> 70% occupancy is the high water market, if you will, kate. what are they at right now what's the latest reading on the number >> that's what they -- it looks like they're nowhere near 70%. in the end of q2 they said it was the target for when they would sort of break even here. so that is the high-water mark and goal going forward, and that's what they've told investors. they haven't come anywhere near that, and in terms of occupancy, and they said that things are returning to normal. it will be interesting in sort of a macro view on the recovery from the pandemic in general, especially in some of the key markets like new york city, places like san francisco, and so 70% really is the tart number for wework
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>> right gina, you hate this one. just hate it why? >> yes, i hate this one. yeah so if you look at wework, the problems that they have is they have negative operating leverage i mean literally they make more money, it causes them to lose more money that's what i need to hear in order to be convinced it is a great stock, because right -- and what is encouraging is that the team is a real estate team if you look at what contributed to the negative operating leverage it was, quite frankly, bad leases, just a bad management strategy of the liability side of that business. so we need to see them turn around that operating leverage into something that at least has a path towards profitability, such that every new dollar doesn't actually cause you to spend $2 >> all right thank you, kate rooney next up, walmart the classic retail/value trade, shares have gone nowhere this year, up 2.5% as management contends with rising prices and shipping delays. does the company have enough leverage to deal with supply chain constraints and inflation?
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courtney reagan is here with the story. courtney, you would think a giant like walmart, if anybody can deal with supply chain issues, can deal with higher costs, it would be walmart >> absolutely melissa. i think walmart sort of is the pinnacle of logistics and supply chain management for many, many years, and i think even with all of today's complications that still remains true when you have the scale, you have the size, you have the power of walmart, you are able to do things like chartering your own ships so that you can be in better control of that cargo, when it comes in and at what costs we know that they're already doing that we know that they have a private truck fleet. when we hear about the trucker shortage, it possibly is something that walmart is able to navigate a little better than some other players so that is always something that walmart is going to have to strive to do in order to keep its brand promise that every day low cost, in order to deliver every day low price, and walmart has proven it has the ability and will continue to invest in price, which we know means it
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will do its best to keep those prices as low as possible for the consumers. i would make one other point, and we talked about it a lot when we were talking about the tariff discussion, how much of the inventory that walmart ends up selling, or really i should say what is sold at walmart is food so much of it is domestically grown so they're not actually dealing with the supply chain issues as much as some others might be from overseas >> i hear invest in price and i think that basically they're giving up on margin, right they're eating the cost courtney was talking about in terms of getting the goods to market. gina, how do you think about it? they're going to make the sale but at a price so to speak >> yes, they are, but, melissa, this is a classic operating leverage story they have managed to create operating leverage at such scale and the ability to manage the costs of delivery right now are massive. it gives them a massive advantage. i actually think that's going to be probably their best -- you know, the best-selling point is that they aren't having to eat it in margin in the way that
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others do, right that's the trip. >> courtney, i noticed the black friday deals already from walmart in walmart.com it is starting already are these goods already in the warehouses should that be assumed >> yes so i think it should be largely assumed for a player like walmart. i don't think that it can necessarily be true for everyone i will give you just one anecdotal example. we were at a toy star in medford, massachusetts, and they are part of a franchise group of stores that send out a holiday catalogue. they said, for example, many of the holiday items in the catalogue they had not gotten in and they're not sure they're going to get them in walmart is not going to do that. they're going to be in control it is safe to assume they have the inventory. it doesn't mean they will be able to meet everyone's order,
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because sometimes you can't. >> it seems like a draw to shop at a place like walmart, especially if you are a parent thank you. nvidia up 130%, surpassing names like berkshire hathaway and market cap with most of the semi space going parabolic, how much more could be left in nvidia dom chu is here with the story it has all of the buzz words going for it these days. >> mess au verse >> metaverse >> it does >> we have everything going on if you ask in terms of momentum what it could be, it is really about the gains we have already seen, about 132%, like you said. it is the seventh most valuable company in america in the s&p, biggest semiconductor company, $760 billion in market cap it goes without saying there's a lot of positivity baked into the stock, and it has been for a while like that, which is why markets are often expecting some volatility around the stock going into and out of earnings now, here is the current consensus expectation.
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we are talking about $1.11 in earnings, about $6.8 billion in revenues, according to estimates compiled by fact set new this morning, we had webb bush downgrading nvidia to neutral from prior outperform. they admit there's no negative catalyst to pin the move to and the conditions have only improved for nvidia in the last few months they're simply doing it, melissa, on valuation because it has been a juggernaut. if you ask any trader out there, describe to me your quintessential growth momentum play, it might just be nvidia. >> yeah. they downgraded but raised the price targets. gina, how are you feeling about nvidia >> look, we have owned nvidia for a long time and it is a strong company with a really, really strong value prop because their graphics chips are without a doubt the dominant player in the market but the problem is that, you know, no one can rest on their laurels and you have much cheaper opportunities coming in,
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basically chipping away at that. you have apple that's creating a new graphics card -- a new graphics chip that they have created. and then you have intel that's basically creating a competitive graphics chip that will go into every pc, and that's where the gamers -- that's the, you know, computer of choice for gamers. that will be actually real competition for nvidia so, you know, when it starts to get this highly priced, you have to start to look at who is coming up the curve. >> are you saying, would you transfer funds from nvidia to an intel? that seems like a big switch >> it is, but that's actually -- we're playing both of those names. they're both owned in our portfolio. it is not as though we are making a choice either/or. we like nvidia, we like their business model and we loaf the fact they've created a moat. but, you know, we cannot ignore the fact there are other ways to play this. >> all right dom chu, thank you our thanks as well to gina sanchez. up next, shares of deere
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slightly higher and up more than 8% this month despite the ongoing worker strike. how the uaw uld cohit farmers in their wallet "the exchange" will be right back (animal drumming in distance) (loud drumming) drums! drums! aaaaaahhhh! at least geico makes bundling our home and car insurance easy. we save a lot. aaaaaahhhh! ohhh! (loud drumming) animal! aaaaaahhhh! for bundling made easy, go to geico.com. uh-oh... your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire i'll shoot you an estimate as soon as i get back to the office. hey, i can help you do that right now. high thryv! thryv? yep. i'm the all-in-one management software
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♪ welcome back thousands of john deere workers have been on strike for a month now. it is the biggest private sector strike of the u.s. since 2019 and there's still no resolution in site. seema mody has been following the story and joins us with the latest and what it could mean for the prices of deere products i would think higher >> definitely higher i'm told a meeting took place last night, but, alas, no resolution yet the 10,000 union workers continue to hold out for a better pay package deere indicated its latest offer including a 10% wage hike, $8,500 bonuses, was readjudicated by the union workers, who want more >> john deere's stock price more than doubled since the pandemic
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began, so there's sort of a sense that we sacrificed we were told we were essential now it is time to basically put your money where your mouth is in terms of these union contracts coming up. >> now, in the event this strike continues john deere is making contingency plans, leaning on salaried workers and international factories to produce extra parts needed by farmers in the u.s. as agriculture demand remains incredibly high. analysts at jpmorgan say deere will have to further raise prices of its farm equipment like tractors around 1.5% to account for higher labor costs and it comes amid higher worker strikes across the nation. at kellogg in michigan, kaiser permanente in california in fact, it is the second highest in data history dating back to 2011 deere is not the only industrial dependent on union workers there's oshkosh, caterpillar with 17% of employees and cnh industrial, another ago
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equipment company with 14% of employees tied to the union, melissa. >> i would think all of the companies are watching carefully. are their contracts up at other companies so they could be in position to have the same thing going on >> these contracts come up yearly these negotiations take place on an annual basis. similar conversations i imagine are happening at other industrials watching this worker movement taking place across the nation by the way, political consequences potentially as well less than a year to the midterms there's questions about the house flipping, and these strikes are happening in politically important states like iowa, kansas and illinois >> all right seema, thank you >> thank you >> seema mody. coming up, inflation is nar ing hot but one portfolio magewith names whose dividend growths he says can outpace it we will reveal them next
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♪ welcome back to "the exchange." stocks rebounding today but are still on track to snap a five-week winning streak as inflation fears rattle markets the next guest has stocks he says have enough different denied growth to outpace inflation. join inus with picks, portfolio of the oscar weiss growth and management fund. good to see you, larry >> good to see you, melissa. >> let's get it straight
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it is not just they have a dividend yield you like but that the dividend yield will grow faster on inflation. what is your assumption on inflation for next year? >> boy, that's a tough one we think it probably comes down from the levels it is at now but may also or probably does stay persistently higher than what we've seen in the in the last fe or ten years for sure. >> let's run through some of these stocks i know our viewers want to hear them visa if you can talk me through how you think of a company raising its dividend and what makes you think that the growth in the dividend allows pace of inflation let's use visa as example. >> so visa has actually increased its dividends by more than three times the dividends gone up 3x over the last five years. already a company of history of increasing dividends if you look at where business can accelerate over the last 12 to 18 months there's a lot of
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tailwinds and tailwinds turn into travel for visa they make three to four times as much money on no transactions versus what they do domestically the travel comes back only 60% of what it had been prepandemic. we think it's a really big tail, increasing its earnings growth that translates into high-end dividends. >> the pay these days, larry, pricing remains with the transporter at this point in time how do you think in terms of, let's say it didn't have a dividend are you confident that the company stock will itself go higher because the added bonus of a dividend yield? >> that's a great question, melissa. earnings growth has to happen for dividend growth to follow, right? so, your question is right on the mark and to answer it, yes, if you look at what's going on with the pandemic, and all the supply
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chain problems we've had, you can specifically see a tremendous amount of headwinds in fact, if you look at the premium businesses like motor and auto, premiums are down 8 or 9% year over year. those headwinds turn into tailwinds when we get into 2022. one of the things we thought interesting if you just look at the mac control economy, inventory levels now compared to gdp are significantly lower, 5 to 30% versus what they were in the '90s this is long-term med win that gets inventory level for the united states. probably reverses now that the pandemic has laid bare with the supply chain but a multiyear story with companies like this. >> cvs is another player you that like. i want to stick to amd, it didn't have a dividend we're not going to let that go
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without question why did you put that in there? or growth so spectacular you that don't need the promise of dividend yield to buy it >> yeah, we've liked amd for a long time, called it the income slayerer it accelerates, 1.2, market rate will accelerate. and amd is in good position to get a lot of good share in the nvidia market. and what they have a gpu competitive advantage. when you look the accelerator, basically chips, like intel makes. and gpu, it's talk, amd makes both chips that's a powerful combination. we think there's a lot >> dave: adoption for them and we're not sure that's quite the share. >> so you think it's undervalued still? >> we think business will be better than people expect. and the stock price will respond. >> all right, larry, good to see
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you, thanks for your picks larry cordisco coming up, the most expensive art collection ever sold hits the auction block next week we'll get the preview of a billion dollar art week. isba aerhange" is ckft th es evolving with the world. some changes made me stronger. others, weaker. that's the nature of being the economy. i've observed investors navigating the unexpected, choosing assets to balance risk and reward. and i've seen how one element has secured their portfolios, time after time. gold. an element so agile and liquid. a proven protector. an ever-evolving enabler of bold decisions.
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(rhythmic electro rock music) (crowd cheering) - bito, bito, bito, bito! - [announcer] bito, the first u.s. bitcoin-linked etf.
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♪ welcome back our investors are gearing up for huge auctions next week with nearly $2 billion worth of stalks hitting the block the cryptocurrency buyer should be ready to play a premium robert frank joins us with that story. robert >> melissa, christie's just in the last few minutes packing the 1 billion market and another 70 billion to go we're going it blow past that. last night was the biggest
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auction of the year. the star went for $53 million. that was way above the estimate. dealers and collectors say the combination of low interest rates, massive wealth creation from as you mentioned stocks and crypto and art as a hedge against inflation is creating record demand >> i see the market as extremely strong and i see the command for works of this quality has never been more acute i think coming off the pandemic, just a lot of new-found wealth and a lot of the structure of what we -- what we are seeing in asia and elsewhere shows a real flight to quality that we've never seen before. >> now, the big headlines will be monday night when the most expensive collection ever to auction comes up at sotherby's that's the mclow collection expected to go for $6 million. let's take a look at the highlights, the sculpture going for $80 million.
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and andy warhol that linda mclow. bought for $860,000. that is set to go between 40 to $60 million. for those investors counting at home that's eight times the s&p over that same period. melissa. >> wow that's quite a performance, robert is there any sense where the buyers are coming from geographically >> so, china is really strong, everyone thought with all of the sort of difficulties in china right now that we wouldn't see any buyers that is super strong but it's mainly in the u.s what i'm hearing, a lot of younger buyers, people under 40 who really weren't collecting or bidding prior to pandemic. we don't know, maybe it's crypto wealth, maybe it's stock wealth. but there's a whole new group of collectors that started buying online and now going for the big trophy would it's all across the board and especially strong in north mechanic >> wait a minute, the younger buyers aren't going for those,
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compared to the jack metties? >> they're buying picasso, they're buying everything. >> diversified portfolio, robert, thanks so much that does it for us on "the exchange." "power lunch" starts right now ♪ melissa, thank you very much we'll have you join us here in just a second. glad you're with us, everybody and melissa, too here's what's head splitville, j&j is breaking up so is general electric, and why is two of america's most storied companies slimming down now? and what history has taught us how it's playing out for shareholders and stakeholders. left behind, amazon and paypal, lagging the market this year but there they be the ones to lead the next higher. our market pros tells us how he's investing and the next o

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