tv Fast Money Halftime Report CNBC November 22, 2021 12:00pm-1:00pm EST
we're getting zoom today that's been an important story of this pandemic overall i think a question of what will drive growth going forward and what their narrative is going to be >> meantime, of course, we're watching for continued market reaction to the news about powell renomination and we look forward to the president tomorrow, we believe, talking about rising prices. let's get to the half. >> carl, thanks so much. welcome to the "halftime report." a sideways run for stuck is an end of year rally in the cards we'll debate the road for your money ahead. joining me, liz, steve, joe, but take a look at stocks. we see what major averages are doing. reversal in the nasdaq drawing attention. dow is good for 200. s&p is good for 12 rates moving up today. perhaps on the fed chair being renominated and that's very interesting for the dime dynamic
moving forward tech names are down. how closely are you paying attention to that? >> i'm playing very close attention to it. we had an all-time high recorded for the s&p but you have to pay attention and acknowledge and understand that something is going on internally in the market today first of all, the u.s. dollar continues to push higher secondarily, a two to ten-year spread continues to contract further and to your point, a lot of places where spebculative cap h capital has been rising, a lot of names you're talking about, listen i'm not going to come on air at 12:00 and say i know the exact reasoning why we're seeing this reversal this morning but it is certainly something that needs to be paid close attention to as we move forward
here in the coming days. >> liz young, you get a big potential risk off the table with powell being renominated. it's what you know versus maybe what you don't and what you think policies could be different but with that you do have a move higher in rates on rate hike projections perhaps being moved forward. how do we play it now? >> well, i think, first of all, powell being renominated is a positive in the column of a year-end rally and taking some of that uncertainty off the table. not that brainard would have been a bad decision and more dovish decision, we won't upset the apple cart before the end of the year the rate hike is higher but not materially higher. we tried to get above that level twice this year and it didn't happen i would not be surprised to see us tested again before the end of the year, but i don't think we'll move that much higher. i think steve mentioned this in a tweet and something i've been watching supply and demand issue in the treasury market is going to keep
us in a range in the ten-year for a while. i think we see some volatility through the end of the year on that december cpi readings but after that when we get into 2022, i think the curve steepens and the fed wants the curve to steepen and they'll accelerate the taper in order for that to happen >> are we intact for this year-end rally we've been talking about? it seems like everything was fine and then a sideways move and then tom lee and his guys say you could get a pullback maybe we topped out in the near term any pullback will be bought. here we have a nice gain on what we think is at least in some part powell being renominated. >> i think that's right. are we going to be intact for the year-end rally for the most part but it will be data dependent for me it comes down to inflation numbers we get december 10th and december 14th. what we see now and reference to
a tweet i sent out, we see a lot of supply in up to seven years in terms of treasuries coming on this week in a very compressed period we'll see all that come on by wednesday. this is three days so what you're seeing is technical selling of one number two, i guess there is more optimism from the people that supported brainard in the market than i had realized because she was thought to be more dovish. i'm not sure that's true or not. and the fact that powell was renominated immediately you saw an uptick in treasury yields and the ten year that hurt. last week what took yields down was speculation that with the resurgence of covid in europe and asia and here that the fed would push back the rate hike and what we saw was the percentage of people that look for rate hike increased in september versus june so put all that together, what you have is pressure in highly valued
stocks, not even pe but all. so it's intact but it's intact for a select group of stocks not in everything all in rally at that point more industrials, more commodities, and real true names. >> i mean, if rates are going start moving higher now that the powell question is out of the way, it does eliminate the possibility of the so-called everything rally because maybe high growth and high valuation techs can't go higher in that sort of environment. >> i think that's a fair point i agree with it. as i think you know, my waiting is far more to the cyclical/reopening trades and that's where i actually think there's a lot of value to be had and where i think the rally can pick up. first off, you should note after the last three weeks that part of the market has sputtered as covid cases have picked up here and abroad
i think the impact of whatever wave we're going to number this of covid will be shallow and short and the reason is because we have pills, we have treatments so when you factor that in, what i see is we've got infrastructure spending coming, we've got rates going higher but only modestly so and that helps financials it seems like we have tax increases very, very muted so that's not a concern we've got profits high and grow ing. the bottom linecy s is i see the market going higher. i strongly feel that the reopening, the cyclical stocks are where we are supposed to be right now. i think it will be found that this wave of covid is going to be lessen hospitalizations and lessen deaths which i hate talking about but simply because the treatments are there the world has adapted to covid if you want one risk, it's that in january the buyers are bought out. nobody wants to sell right now i don't want to sell
there is buying going on but in january i think the buying may wear itself out and that will lead us susceptible to a downturn >> there is the prevailing thought even if you get a sell-off of any kind, it's going to be bought where else are you going to put your money that's going to lead the day let's get more on the big news of the day president biden renominating jerome powell. you see senators voting he will come out for his nomination. if there was a brainard trade in the market, it's winding up. you have markets pricing in 50% of a may hike. bank stocks are green. what do you make of the whole thing? >> there's more brainard trade in the market than i thought there would have been or maybe this is how the market wanted to
go but was stalled by the idea that it could have been brainard you have the dollar higher gold was selling off you've got bond yields higher. take a look at the fed probabilities. this is really interesting as i think i reported on this show not too long ago, that may/june split, that's a bet on a speedier taper if the fed gets this taper done sooner, it could potentially hike in may. so when you see that number around 50%, it's a market kind of having a good debate on whether the fed speeds up the taper in december or january you go across and just so everybody is clear, that right-hand most bar, that's the probability of a second hike in december at 58%. so the market looking now for a more aggressive fed than it was with the possibility that perhaps it could have been a brainard chair the other thing obviously is the idea of central banking independence the president did not follow
what former president trump did which is to appoint somebody from his own party because it's somebody from his own party so that's been broken i think a lot of people are breathing a sigh of relief from that >> i saw somebody tweet this i can't remember exactly who it was but the idea that by not picking brainard or by picking her, it would have set an interesting precedent of not picking jay powell to be the fed chair again because a bunch of political activist on one side versus the other decided they just didn't want powell. >> yeah. if you think about it, scott, all of a sudden what you would have is this one-two of trump and then biden both picking somebody who was from their own party and the idea that certain parts -- the fringe parts of parties could dictate who was going to be the fed chair. i wouldn't underestimate the idea that brainard has been put
as fed vice chair. in all the time i've covered the feds, i've never seen the vice chair disagree with the chair on policy, at least on monetary policy so i think what that means is brainard and powell are going to have to agree on which way policy goes. i never thought brainard was as much of the dove as the market thought she was but it may mean a touch slower but we'll see because we've had two fed officials governors last week talk about discussing a faster taper in december so we'll have to watch that. >> steve, as you're speaking, we have a statement from elizabeth warren out now who you may recall and i know you do and our viewers hopefully do as well she had called the fed chair a dangerous man in the last, i don't know, six to eight weeks she says, quote, it's no secret i oppose powell's renomination i support brainard's
appointment. she talks about the vacant position of vice chair critically important no big shock there from elizabeth warren the narrative is this is a slam dunk for powell to get the votes that he needs. >> i think that's right. and from a market standpoint, i think you can bank on powell being approved i do think you have to be aware that a lot of change is coming to the fed and maybe that's a discussion for another day remember, there are two interim fed bank presidents and then add three to the idea that president biden has three more slots on the federal reserve board of governors to pick. that's five new faces on the board next year. and now for his reward for being renominated, powell now gets the idea of he has to navigate out of this extreme policy that we've had and so he's going to really be in the hot seat the next year or so, scott, and
we'll have to watch what he says and what he does because they're going to have to dial back assuming the economy maintains its trajectory it's on they'll have to dial back the stimulus and that's not going to be easy. >> probably where he wants to be if you start it, you would probably like to be the one to finish it. you have to believe that he wants to have that role as well. that's just my conjecture. i have no idea maybe you have better reporting on that than just my speculation. >> i think that's true i think he wanted the job. it's how you get affirmed if what you did as to whether or not you're reappointed, politics notwithstanding. i think that powell firmly believes he did the right thing with his very, very extreme measures in the pandemic remember, he went to zero really in the blink of an eye he put 4.4 trillion on the balance sheet out there. that was more by the way qe than bernanke and yellen did combined and also dramatically expanded the extent to which the fed gets
involved in markets. corporate immunity bonds are now on the purchase list or at least were during the pandemic and he also, i think, engineered two other things worth talking about. on the one hand he engineered going to the taper without a tantrum and brought in this idea of average inflation targeting which leveled the playing field between inflation and unemployment it would have been full of irony for powell who i judge to be one of the most progressive and aggressive fed chairs ever for him not to be appointed because biden wanted somebody more progressive. hard to believe there's someone more progressive than powell is. >> i want to get the committee into the conversation. it is interesting, liz young, the market reaction because if the market is overly concerned about rate hike projections being pulled forward, it certainly isn't showing it albeit a pullback in the nasdaq simply because rates have moved
higher in the last hour or so. by the way, powell's renomination was basically base case for tom lee suggesting that we can go past 4,800 even by the end of the year. so the market doesn't seem too concerned with the fact that we've now decided that there's a 50% chance of rate hikes starting in may. >> yeah. i think to steve's point we have to led powell see this through, right? he started this policy let him finish it. one of the things that we know about him is that he likes to signal the market very, very clearly. so if you just play this out on a time line basis what i think is going to happen we'll hear about an accelerated taper maybe before the end of the year, let's say that starts in january or february, they accelerate the pace of the tapering let's say they finish tapering around the end of april. then we start hearing about the very specific things that he's going to look at in order to decide on rate hikes we'll be very well signaled just like we were very well signaled for tapering if and when that starts to happen
i don't think it starts to happen until fall and i think that's part of what the market is saying here we won't be surprised by a mistake rate hike that catches us off guard and that's a positive >> steve, it also has to ease powell's decision somewhat on when to raise rates if he thinks that the market is going to be able to handle it, you know what i'm saying not that the market activity is necessarily going to guide his hand, but he doesn't want the market to fall out of bed either >> i'm assuming that's me, steve, you're talking to and not the other more famous steve. >> yes my bad steve liesman. >> no worries. i think that's right i think he's played it very well though, scott. he has learned from bernanke, learned from yellen, this idea of being incredibly transparent, laying out what you're going to do, creating benchmarks for the market to price in and the idea that we haven't yet freaked out. i say yet because who knows if
the guys on this committee are going to come in one morning and say the fed is going to raise in six months but if you look at the two-year over the course of this regime of it being at zero and compare it to zero under bernanke and yellen, what you find is that the two-year was much better behaved. the market was not looking over its shoulder the entire time and saying powell is going to hike on us at a time we don't expect. it's only now reached that level of pricing in that first or that second rate hike that's out there. that 50 basis points was there during the entire time or most of the time that bernanke was at zero so powell has figured out a way to talk to the market in a way that it believes him and the way that gives him the flexibility to react you make a really important point, scott, that the market priced in these rate hikes next year and remained at a
relatively high level. i mean that by way of stocks is a pretty good accomplishment by the fed chair and that's a good reason for his reappointment >> you can argue with the policy being around too long but it's al awfully hard to argue with the messaging from powell because it was the most telegraphed taper ever and there's talk right now from jpmorgan that says the reappointment should be a positive for risk assets tapering is less worrisome for stocks than in 2013 as concerns about excessive hawkishness are unwarranted and the growth cycle appears more durable your thoughts? >> i agree with everything you said powell has been transparent and master at communicating the message and he hasn't wobbled on it you can argue whether he stuck with transitory weight too long and is sticking to it although we see perhaps blemishes on that but the market has been able to trust what he says and not have
any fear he will contradict himself at the next meeting so consistency of that transparency is equally as important as the messaging. >> steve liesman, thank you so much we'll talk to you in the days ahead. i look forward to doing that >> pleasure, scott >> steve liesman joining us there. let's bring in senior kpe commentator, steve you have talked about sideways trade in the s&p and more money moving back toward the megacap techs which for a lot of people smacks defensive but that in and of itself has helped the overall market avoid a retraction. you have the strength in the biggest of stocks hold up the market at large. >> it's happened three or four times this year, scott so coming into this week that was the story. a very narrow rally phase that had allowed the s&p to stay dead
flat for two weeks while the majority of stocks, the equal weight aversions of the indexes were all giving back a lot of gains for the year it has been convenient and elegant to have this rotation today and you see recoil of that you had a handful of megacap growth stocks that were essentially doing most of the work to keep the s&p harmless in that period and now it's an unwind i think that the upbeat case coming in was, well, this just sets up another rotation back into small caps and cyclicals and financials and yield beneficiaries as yields go higher maybe that's what we see right now. ugly looking reversals which has been the risk appetite pace setter for weeks in this market and also just the concentrated hedge fund owned names in some of these areas that really had done well and you mentioned some of the art complex there's really been a loss of
patience in that part of the market i don't see it about yields. it's mostly about bleeding away this valuation premium in lower no profit business models as we get toward year end. another element of what's been going on is heavy tax law selling. a lot of stuff is up a lot you want to harvest tax losses where you can and because it's been an uneven market there's a lot of opportunity to do that, define positions where you're down so it's pile on selling in those names. >> what's your feeling on how much risk was in the market if powell wasn't renominated? >> i think there would have been probably a little bit of a reflex move to the downside. i feel like the reaction to powell was done by the time the market opened almost today so i don't think it would have been really a serious swing factor in the way the market was going as steve mentions. we're not talking about really discernible policy differences maybe a slight shading one way or the other arguably a second term chair powell doesn't have to
lean in one direction to keep the administration's favor maybe more responsive to inflation. i do think there's always a sense the market has where we need to learn a new chair's reaction, function, communication style, exactly how they're going to manage the messaging and that's no longer a necessity right now when you have a known quantity there. >> joe, even as we sit here and we have this conversation about technology and where it goes in an environment of higher rates, mkm has a note saying new money starting to flow into tech it's a matter of where within tech it's going to continue to flow i mean, i still remember, gosh, it feels like it was at least a year ago and probably longer than that when ricky sandler was on our show and you talk about fashion show stocks. you can't paint all tech with a broad rush you could have money continue to come out of the so-called fashion show stocks and money to
go in to the tried and true names. >> 100% agree with that. you and i spoke last week on the show about the expecteded biferkation i think is going to unfold we'll discuss a $3 trillion valuation and then on the other side of that you have high data, hyper growth technology stocks that are clearly continuing the significant downtrend that they've been in for the entirety of the year. i also think there's other components of technology where you could find a qualitative nature i know mike mentioned inindinvidia. there are other areas of technology like adobe.
so i think this is the moment. i think this is the moment where technology, investors are going to pay a premium for companies that are able to exhibit a strong capital allocation strategy, they're able to generate that revenue in here and now and exhibit the sustained double digit revenue growth not on a one quarter basis but a multiquarter basis >> mike, lastly to you, the harder question to understand and figure out and in some cases guess is how much we've pulled forward into this year from next you look at the targets and you have more coming out really by the day. goldman s&p 500 year end 2022 is 5,100. that's just a 10% total return nothing to knock your stocks off. b of a says rate shock in '22 to follow inflation shock of '21. do you have a sense as you look at the market how much we might
have pulled forward? >> there's not a way to get a clear sense of that. by the way, that logic is not always all that helpful. you know, usually very strong markets are followed by further gains as opposed to some payback phase. now, early in a new year you have deferred selling and buildup of optimism toward year end. maybe you have a flatten out period but historically when you look at great years like we're having 25% higher, you look at what happens next year, it's basically the same odds as you have with every year , which is up two-thirds of the time. average returns around 8 to 10%. by the way, the forecast by the street are going to come in around that 8% to 10% number every single year. that's where they will congregate and no chance that happens. you almost never get an individual calendar year when that's the return. it's the average of all the years over the long-term there's more chance of the
market being down than up 8% to 10%. >> next year will be interesting and maybe the better word is tricky midterm election, rate hikes to deal with, future of covid, and who knows what else that we haven't even gamed for yet mike, i appreciate it as always. a mystery chart. it's up big this quarter a new call out today saying it's time to take money off the table. we'll reveal the name and talk about medysobo to did take money off the table. we'll talk about it next ♪
welcome back here is our cnbc news update reduced subway service in the nation's capital will last through the end of the year. about 60% of rail cars are still sidelined after a derailment in mid october. no time line for returning those cars to service. a new york probe has found, quote, overwhelming evidence that former governor andrew cuomo engaged in sexual harassment and found that cuomo aides substantially revised the state report to exclude deaths of nursing home residents at hospitals as an attempt to boost cuomo's reputation british prime minister slamming rioters over a third
night of protests over covid restrictions on the news, more organized gangs loot stores across america. the latest string of crimes in california tonight at 7:00 eastern. jeff bezos is giving more than a million to former president obama's foundation bezos and his family have given 166 million to new york university's medical center. scott, back to you >> thank you shares are up 40% in the last month but the valuation stretched and firm downgrades that stock to market perform we made it our call of the day and we bring in jon najarian because he's making moves. welcome. cut your losses, huh >> they were gains like you said still up over 40% and i just
kept rolling, rolling, rolling to the upside but today versus friday, yeah, it was a loss. and what i did, scott, was i'm not saying that they are ringing a bell as far as saying it's over for charging. i don't think it will be over. not with 500,000 charging stations coming our way over the next five years. but i do think that it was pretty clear that we should be taking profits today, people listening to that report obviously sold blink it put a cap on the upside of charge point and vultera and hi those stocks through options and i closed all of them out today like you say, blink was closed out from friday's trade until today. it was a loss but it was a strong month for performance in that sector. >> what do you do -- i'm looking at it as we speak.
i'm pulling it up here another stock down almost 13% today. you own that how do you factor that into what you just said with the others? >> well, i own it. as you recall last week when i was on with you i said i traded out of the stock at 105 to 160 don't want to look a gift horse in the mouth and put on a spread and i have since now rolled that down to the 120, 150 spread because i still like the play but i wanted to take some of that off and, in fact, one of the bits of unusual activity today was i'm not doing -- i'm citing it because nio this week, november 42 calls right with the stock at about 32, they bought 16,000 of those. as much as people were taking profits in rivian they are
positioning for upside in nio. >> so i also understand farmer jim and i want to bring jim in because i want to have a debate on this. jim, you bought rivian in your personal account brand new give me the reason behind that and then if we need to have a little debate on whether these stocks have all gotten so far ahead of themselves we can do that >> so, scott, i bought 120 strike puts on friday in rivian. they expire this coming friday so right now it's working out fine i do want to stress this is just for me personally. i don't buy options for clients because sometimes these things go to zero i said to you on the show a week and a half ago that this is a case of the emperor is not wearing any clothes. for the stock to have market greater than gm is nonsensical i'm not just coming at jon
i don't think he'll find me if he wants to take me out but i think jon will also agree that this is a ridiculous valuation and where we differ is on the timing of this is why i only do this in my personal account because i have to be right in the next three days i'll have to close it out in the next three days. this is really a stock that should be well below 100 on a market valuation basis and maybe that happens this week or maybe it happens next year, i don't know i told you this is the emperor wearing no clothes if you look at the entire market cap of all of the ev stocks and the traditional oem manufacturers, it's as if the world thinks there's going to be ten times as many cars on the road next year in total than there are. the emperor is wearing no clothes. the stock does not deserve to be a hundred dollar stock should be half of where it was jon knows i love them. >> we don't need all that. i hear you
i hear you niceties aside we know you're a nice guy. >> jim is an analytical guy and as i should always do, thank you for your service, jim, because i truly do appreciate what you've done in service of this country. as far as this trade, he could be absolutely right, scott the unfair comparison, i think, is putting it against ford or gm or any legacy car manufacturer because just like tesla, you talk about a brand new -- i'm not saying this changed everything but it changed several really big things. number one, when tesla did it, they did it without a dealer network and didn't have the pension issues that other car manufacturers around the world have and they came up with a new category more or less when tesla came up with ev, they were the first big mover in that space. rivian is not the first.
they have a good looking truck that looks a lot like the lightning. i think the lightning's will be delivered before the rivian trucks but nonetheless, i think that when you look at the lack of that dealer network that takes the bulk of the profit out of that vehicle, scott, as well as the pension issue, it puts more expense on top of vehicles that gm, ford, volkswagen make i think you get the idea that this is not a direct or a fair comparison to say, well, versus gm's valuation or ford's valuation because if they didn't have those things, the dealer network they would be a lot higher too in valuations >> i appreciate that i want to get one more quick comment from you, joe, because what i find interesting is we're having this conversation is you're looking at ford thinking about buying it today. what puts you over the edge and says, okay, i'm going to make that move? the stock has already moved a lot. it's barely off 52-week high and
up better than 50% in just a few months why are you first looking at it now, number one, and what will get you to buy it today after what i said about the run it's already had? >> i've had moments where i've been in either gm or ford. i'll acknowledge i probably have not held onto either of them in the way that you should be in this environment i like the reseiliency of ford over the last several weeks as we see a lot of money that is going into this ev theme i suspect, scott, one of the things that's unfolding here is that capitol that was in tesla and moved out of tesla went into the ev names and it created a great trade for the ev names but i think now the overall exposure that the viewer wants to have towards the theme of evs is in the more traditional sense. i disagree with jon.
that takes you toward gm, ford, tesla, and even some of the foreign automakers and for me the resiliency of ford in the last couple of weeks is one of the reasons why i'm interested in purchasing it and will probably do so over the coming days >> i appreciate it doc, before i let you run, do you want to give our viewers special unusual activity today >> i would love to do that, scott. thank you for the opportunity. facebook, fb, this is one that i got out of the stock completely and i'm only in the options but today, scott, they started off buying november 26th 355 calls, they bought 8,000 or 10,000 of them it's up over 43,000. that's this week expiration. black friday expiration, 355 calls. second one was taiwan semiconductor. they bought 8,500, again, of this week, november 26th, 130 calls with the stock about
126.5. both of those much larger volume facebook is charging four to one calls to puts right now. i'm happy to be back in the calls but i do not have stock in facebook anymore >> appreciate you popping on with us today, doc still ahead, the big etfs to put on your radar today. we're back in just two minutes
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welcome back one undeniably hot trend that's taken the etf world by storm is esg, environmental social and governance and that trend continues to garner demand and inflows into sustainable etfs are up 50% from where they were this time a year ago as more and more companies attempt to weave esg into the fabric of their dna. they launched the first ever active fund last week. joining me to discuss is david, head of equity product, along
with tom, ceo of etf trends. david, let's start with you. clearly there's been a lot of inflows here into these esg offerings out there how does that one stand out >> you know, first off, thanks to ha for having me on today many esg markets in the offer today are focused on large cap companies and many have a tilt toward growth orientated companies and what we've designed here with the investment philosophy provides investors small exposure with a value tilt to put together a well rounded esg portfolio >> those are some of the more under the radar picks when it comes to esg these days. tom, do you think the market for esg is getting oversaturated there's a thought this is a bull market phenomenons and once we see a reversal that esg may go to the wayside do you agree with that >> i think we're just getting
started, leslie. we're behind our friends over in europe that have been on this for a while. the great thing is every company comes at it a different way. they are really unique when you think of ariel since 1998 have worked to do specific survey work regarding black investors and this was first completed over 20 years ago. they explore the similarities between black and white americans when it comes to savings, investing, and other financial priorities i think with this active management, you're going to see not only as david said big companies but small and mid sized companies that are specific to this cause and it's quite appealing from a different standpoint as far as esgs out
there. one fact that's important is schwab does not have subadvisers often. the fact they've done with this ariel is notable >> tom and david, thank you for joining us you can catch us at 1:00 p.m. eastern talking the top etf trends in november and what's in store for bitcoin's etf. "halftime" is back after this. ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq
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let's talk salesforce. price target was raised to3.30 atlantic equities. also, it is now a top five holding among -- among hedge funds for the first time ever. it is number four on goldman's list here is what i want to do. let's get former jim and steve weiss, back together again, old friends. jim, you own salesforce. steve weiss, you wouldn't buy salesforce jim, you go first. why is it a buy today? >> why would steve change his habits and start buying good stocks this is a stock that is a little bit different than what i normally buy because the valuation. i will start there but i bought this earlier this year, the stock had swooned, and
this was when marc benioff, the ceo, came in and acquired slack or announced the acquisition i looked at that move and said, okay, i like this, i like this a lot. he already has a business in customer relationship management that is almost cultish is how his customers deal about it. now he is pivoting to a new growth segment it is the right place to be. i expect more moves like that from marc benioff. this stock is up 30% since i bought it earlier this year so no complaints. it may come down at some point, particularly as rates go up. i will use that as an excuse to add to the stock so this is going to be a long-term hold for me. >> okay. steve weiss, why no touch? too rich >> well, first of all, you know, i can't agree with jim because no sense both of us being wrong. look, yes, it is too rich, number one number two, their model changed a little bit they had so much or goonic growth, but as they got bigger and as their core business started to slow, they have to make bigger and bigger
acquisition. these large roll-ups, and that's what it is turning into with slack, which was an expensive acquisition, and others, jim, as they come down the road, they just don't work that well. then you have cultures clashing, and we have seen it time and time again red hat and ibm being another one. it is not the savior you should never violate your discipline this valuation is egregious. rates are going higher as jim said earlier in the show, it is not going to work for these high-valued stocks so i'll talk him out of it, out of it later. >> jim, i'm looking. looks like 119 times >> -- ibm, how can you possibly compare this to ibm? i mean one is a company that is growing both organically and by acquisitions i don't think it is a roll-up at all. the other one is shrinking organically and making acquisitions that doesn't make any sense. this is night and day. i know you and i like to do our odd couple routine, but i don't know where you're going with this one
>> i compared it to ibm because, number one, i wanted you to have a frame of reference because you owned ibm, number one. number two - >> it was five years ago >> -- because companies that need to make acquisitions when their core growth rate, organic growth rate is slowing of course they're different companies and this is much, much better management. he is one of my favorite managers of all time, however, this isn't going to save him sometimes you get too big for your own good, saturate too much of the market. >> that's the last word there. to be continued. general, thank y vy chouermu we will take a break and do "final trades" next.
♪ ♪ all right. final trade time liz young, you go first. >> electric and autonomous vehicles i believe in the theme long term i think there's fiscal power behind it. i think there's consumer power behind it it you want to do it in a diversified way, not just picking one stock. so looking at components that go into these vehicles along with the ought mow makers >> a lot of activity in that space today. and in the past many days. joe terranova, you are up next >> so, scott, it is not going to surprise you when you see me again on wednesday i will be long ford motors, but the question is what do i sell for the capital to use for ford. the answer to that is going to be starbucks i first bought starbucks on february 2nd at -- bought it at 101.32 i have about a 9% gain, but the stock since july has been moving sideways to lower. it is time to get out, on to something better, and that will be ford motors >> so joe was a looker, now a buyer of letter "f", ford.
out of starbucks farmer jim >> real quick, i know we're running out of time. wynn resorts two reason one, the reopening is occurring. two, china doesn't matter to this stock it is already out of it. >> quick, steve weiss. >> dick's sporting goods reports in the morning tough comps, but i think they'll exceed and beat the numbers. >> "the exchange" starts right now. ♪ thank you very much, scott hi, everybody. i'm kelly evans, an we have a decision the president says powell will stay as fed chair and promotes brain erd to the vice chair post we look here from powell, brainard and president biden himself, all in the next half hour we'll bring it to you live plus, boring or exciting which is better for your portfolio? old and proven is better than shiny and new my next guest argues and it is leading the way today. and earnings