tv Closing Bell CNBC November 22, 2021 3:00pm-5:00pm EST
is put at risk by turkish authorities and has such heavy security right? >> he's said that the turkish authorities, criticized the turkish government, as well why that could be one vector of the threats that are incoming and said he's working with security and fbi and local law enforcement on it. >> thank you for watching "power lunch." >> "closing bell" starts right now. directly at this moment both an enormous potential and enormous uncertainty of the economy we need stability at the federal reserve. >> hello and welcome to "closing bell." i'm sara eisen here at the new york stock exchange. president biden's powell pick sending the dow and the s&p higher welcome. >> i'm carl quintanilla in for
wilfred frost. the president officially tapping jerome powell to serve a second term as head of the fed. more on that news in a moment. yields popping on the back of that decision. helping the banks today. pressuring tech and energy is the top perform today as oil prices firm up a bit 59 minutes left to go in the session. coming up, treasury secretary and former federal reserve chair janet yellen joins us with the reaction to the president biden decision to theic with powell. >> that's going to be big. let's get to mike santoli for a look at the action and the reversal today. >> yeah. little bit of a backsliding of the recent trends. from the broadst angle s&p 500 looks gentle new intraday record high where we're trading about 7 points above where we peaked out on november 5.
november 5 until today kind of went sideways but a nice -- we are still kind of riding that six-month trend line but it's doing it the hard way today without the help of the very largest tech stocks looking at the growth stocks and semicon d semiconductors and there's a lunge higher and then the equal weighted russell 1,000 with the by bifurcation. ed's more than 10% nvidia alone. that's why it really does have rocket fuel in there in terms of the macro set-up with another term with chair powell, take a look at the city economic surprise index and then the inflation surprise indexes been jumping all over the place. this is a long term peak in the
inflation surprise when we got the concentrated worry about inflation. that's moderated slightly. this is surprise relative to economic forecast and then same time the economic data coming in better than expected that's not a bad combination explains why u.s. stocks are able to weather the macro blows and the bad headlines overseas as the dollar goes higher and yields expecting a tightening action next year from the fed. >> on semis today, i think bespoke this afternoon up 1% for more for six weeks tied with the longest streak 1998. >> absolutely wh now it's bullish tends to be a good beacon for the market if they get too hot and the near tomorrow usually means giveback. i looked back to semis versus
software with a similar run of outperformance and then semithemselves sideways after that who knows if we get a re-run semis with a rough intraday reversal is going to resume the climb or give some back. >> the fed move all about yields. >> sure. >> it's sort of a familiar pattern why yields go up tech sells off that's what's happening. does it make sense to you? the market is pricing in the first interest rate increase in june and the second one in november such a big move on the decision to nominate powell does that make sense >> i don't know if in its it makes sense. the cyclicals have been pulling back the banks came back from the highs. just at the moment it seems like
the winds blow back in their favor they're ripe to be bought on the dip talk about yields inverse to tech october 11 at the very same 10-year note yield level since then tech is well higher up 5% or 6% as a sector but the yield level is the same. on an intraday basis that's the way correlations work. i don't know that it really tells you all that much and how things are driven into next year bkx outperforminging the ndx and not by a little bit. >> a lot buswas built up in the first quarter. it's built on the peaks. small caps little bit less of a breakout but similar dynamic with an amazing run into everybody's getting the vaccination celebration into
march. >> zoom video which is one of the decliners today. whenever you get that higher yield move you get pressure on the higher valued stocks but this stock is off 50% from the highs. reports after the bell what is the setup given the news around covid >> the set-up is i think almost a surrender by people into this stock for what it could do in the near term. it is similar to peloton, roku, some of the sports betting companies. not just pandemic plays but attacking a huge market. looks like the new secular winners. you paid too much for them last january and still bleeding away that premium why not buy the old secular winners? you have a lot of that kind of sort of concentrated high beta
growth bets giving some back i think it is a positive because it keeps any real active managers from feeling like they have it figured out >> mike, we will see you soon. the big news of the day. president biden's choice to renominate jerome powell for a second term as federal reserve term joining us is treasury secretary janet yellen who served herself as fed chair from 2014 to 2018 it is great to see you thank you for joining us. >> thank you for having me. >> so, the president followed your advice. what did you recommend to him on this front >> well, look. i don't want to say what i recommended but i surely will say that i'm very pleased with his choice i had the pleasure of working very closely with both jay
powell and lael brainard and they're consummate professionals, support an independent fed, are completely committed to the fed's dual mandate of maximum employment and price stability and have amassed tremendous records i have confidence in them and i believe they'll have broad support among congress and the public and can be counted on to do an excellent job. >> it does seem that fed chair powell will have no problem getting confirmed. he had bipartisan support and heard from senator elizabeth warren calling him a dangerous man and cited failures on regulation, climate and ethics why is she wrong >> well, look. on regulation, you have the chair powell has the endorsement
of barney frank and chris dodd the authors of dodd-frank. he is clearly someone who adheres to the core reforms that were put in place and has been supportive of them and they have basically said that they see that and feel he is the best person to lead the fed and i concur with that decision. we will be nominating a vice chair for supervision and dodd-frank gives that person significant responsibility in supervision. chair powell has said he'll be supportive of letting that person take the lead >> go ahead. >> on climate, the fed has made considerable strides on bringing
evaluation of how climate risks affect the banks and super vises. it's doing very good work on that and gearing up to do i think scenario analysis of the risks facing the banks and to use it in supervision. >> yeah. that could be a slippery slope going forward if the feds gets more involved in climate i wanted to ask you about inflation because we heard that president biden today in the announcement, from brainard and powell is the administration getting more concerned at this point about inflation? >> well, i think we do have to be concerned about inflation it's reached the level that concerns most americans. you are seeing it in the pocketbook when they go to the store to buy food or to fill up their cars at the pump i think it's partly a reflection of the fact that the pandemic
has had a severe influence in our economy and part of -- demands supply imbalance in getting on track but the administration, the white house is doing everything we can to address supply chain bottlenecks that are boosting prices and over the longer run the fed needs to play an important role to make sure that this doesn't become endemic >> should the fed and powell continue to prioritize the improvement in jobs? there are still more than 4 million lost over inflation? that's been the policy so far but many are calling for it to change. >> i'm not going to weigh in on the details of fed policy. the fed's mandate involves low and stable inflation over the longer term and also maximum
employment they put in place a new framework for how to handle the balancing of these two mandates and detailed questions of tactics and timing i think we can leave to the fed. i have confidence in their ability to make good judgments there. >> okay. so i'll ask you an economic outlook question then. if the fed does get a little more -- if the fed acts quicker to taper, pair back the stimulus and raise interest rates, does that risk a recession or choking off the growth >> i see the u.s. economy being on the strong growth spurt at the moment unemployment has been falling fast we have seen over 500,000 jobs a month since president biden was elected. and i think that's going to continue into next year, driving down unemployment. so you know, there's strong
support for economic growth that's coming from policy and from the buffer stock of savings households have built up so it's up to the fed to decide just how much monetary policy support is necessary given those other factors. >> the dollar right now, secretary yellen, is trading at the highest level since july 2020 does that comfort you or do you worry about the impact on growth and corporate profits? >> i think growth is poised to be very strong over the coming year and unemployment to decline. but i think what we do see in the marketplace with the strong dollar and generally low longer term interest rates is confidence that inflation is not something that is going to become long lasting or endemic in the u.s. economy and that's
important. >> we talked about climate change and something that president biden mentioned in his pick and you mentioned that the fed is going to pay closer attention to it, though it could be a little bit controversial if the fed gets into this politicization of the fed. what should be the role? >> i called together the regulators, banks and others to discuss the importance of taking climate change into account in supervision and regulation of financial institutions climate change poses a major risk to financial institutions and to the financial stability of our economy and in the safety and soundness, supervision that it does just as the fed analyzes through its regular stress tests to make sure that banks have enough capital and adequate risk
management to deal with threats coming from financial market risks, climate change needs to be added to that mix and that's exactly what the fed is doing is gearing up to do that kind of analysis so that it can make sure that banks understand the risks and manage them properly and effectively. >> we know you have a busy agenda today so taking the time to talk to us on this historic day. thank you. >> strong interview. after the break talking about the powell pick. specifically what it means for the banks. you are watching "closing bell" on cnbc.
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financials rally today for more on what this means for the banks bring in wells fargo andist mike mayo who joins us on the phone. good afternoon >> thanks for having me. >> i think in a word your general take is if you normalize rates you normalize earnings and why the renomination is important. >> the stock market looking for continuity the interest rate market is saying higher rates so for banks
what that means is normalized interest rates should mean more normalized earnings and as a reminder banks are sitting on record cash. almost one fifth of bank assets in cash and they have the potential to deploy that cash into higher yielding securities and loans so with a greater chance of a hike in the federal funds rate, you're seeing the short end of the curve steepen some and should reverse what's been a historic two-year decline. incredible head wind which we think will turn the other way. >> the rates are the battle in your word it is technology that's the war digitization automation ai i.t. does that mean the classic l ladder is different? >> well, you have said my words
exactly. everyone's focused on interest rates and very important for traditional banking revenues the renomination of fed chair powell seems to be continuation of additional higher increases you have seen that in the dot plots so what you see here is the intersection of the cyclical change with the structural and banks are retooling for a decade and don't see that benefit until revenues come back with the aid of higher rates. we held a conference with big tech and all sorts of t technologists and bank investors and what we saw is love. there is love between big banks and big tech tech enables banking to achieve record e fins sys and banks need
that record efficiency we had gary cohen at the conference president of goldman sachs for a decade and said it's revolutionary for banks. big data banks, biggest banks scale horizontally the cloud save one third on expenses one fourth reduction in branches dell is bigger than square and venmo. faster processing. and then there's the governance. technology is among the biggest priorities for banks and than i have seen in the three decades. >> mike, you have been talking about the interest rate, monetary policy implications of today's news what about the regulatory impact there was a feeling if brainard got the top job would be tougher
and already senator warren is making noise they have a vice chair of supervision role to fill what could that mean for the banks? what sort of rules or changes are in play? >> let's not lose perspective. i think banking regulators, thank them for what they did and allow banks to be strong enough to be a source of strength through the pandemic and the governoring regulations coming from dodd-frank, the law in place. so as far as earth moving regulatory events is not to be expected i think the jury is still out on the course of who's going to be named vice chairman of the fed in charge of regulation and depending would we have to go back to the models to say maybe there's not as much capital return maybe require more from banks on climate and esg matters?
certainly. i think the jury is out on that. capital levels are near record for the banks and put the step forward to be part of the solution whether climate or other esg matters. >> janet yellen said climate change is a major risk to institutions and the economy thank you for jumping on the news line. mike mayo. >> thank you. dow up 276 after the break elizabeth holmes taking the stand as we head to break check out the top searched tickers 10-year yield with the most interest no surprise. some of the crowd favorites on the top five list today. we'll be right back here on "closing bell.
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embattled founder elizabeth holmes taking the stand today. scott cohn is at the courthouse in san jose with the latest. scott? >> reporter: remember the hard of the government's case of the last 11 weeks or so was the insiders testifying about them telling elizabeth holmes bad news about the product and the technology and her essentially disregarding that and defrauding investors. as the defense case begins what elizabeth holmes herself is talking about the many successes that the company had good news that holmes received in the early years like the fact that they managed to actually miniaturize an automated process for toastsesting testing blood reduce errors. going back to 2007 another trial where they were
able to they thought track the process of a drug in a patient's system another big deal and a potential to find markers in small samples of blood for accept sis, a most deadly hospital acquired infection. we were trying to help people where they were headed with the health she testified and that's what her idea was when she dropped out of stamford at 19 to found theranos by 2010 that i remember working with big pharmaceutical companies. they were working with the department of defense and these were the things that clearly made holmes enthusiastic and talking to investors what we have not heard yet is her side of the story about what she did confronted with negative news that clearly will come today is a short day of court and full day of direct
examination tomorrow from her attorney and then take off for the long holiday weekend trying to leave jurors with that impression before tough cross-examination begins next week guys >> look forward to that. thank you very much. still to come tonight, pandemic darling zoom cooled off this year losing a quarter of its value. we'll see if earnings jump start the stock when results come after the closing bell yields see that big move higher following the fed decision 10-year 1. 63. "closing bell" will be right back our retirement plan with voya, keeps us moving forward. hey, kevin! hey, guys!
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just less than 30 minutes left of trading. losing steam on the market dow, s&p, russell 2000 all up nicely dow up 254 nasdaq underperforms s&p up half a percent. time for a cnbc news update. >> here's what's happening new details in the christmas parade tragedy in wisconsin. police identifying the man accused of killing five and injuring more than 40 driving a suv into the crowded parade. >> the suspect involved in this tragic incident is identified as daryl e. brooks. 39 years of age. a residents of milwaukee at this time the waukesha police
department is charging based on the investigation. those will come in time. >> a remcilroy held for the vicks at a catholic high school. some members were members of the dancing grannies club. a security camera catching a crash. a dump truck swerved and into a house. police say two people were taken to the hospital with nonlifer threatening injuries back to you. >> all right thank you next a top strategist saying how the policy could be impacted we're back in a moment q3. yeah... uhhh... doug? [children laughing] sorry about that. umm...what...it's uhh... you alright?
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major averages moving in different directions nasdaq lagging s&p on track for a record close following the president's decision to renominate jerome powell to lead the fed joining us is adam good to see you again. >> you, too. >> i'm dying to dig into the thoughts about the renomination and the view which is contrarian that the fed may hike later than people expect. >> i think it is hard to call but i think the fed are the smart ones and found it interesting when people criticize all the way back to bernanke saying the fed doesn't get it i said i don't know. they have phds and access to the best information and smart they watch the markets if you look, we have a little
bit of backup but the 10-year 1.50 plus or minus more importantly the five-year break even is 2.25 i don't think the market is worried about inflation. i think the fed won't raise the front end for a long time. i'll take the second half of '24 or later they will look at two things that they always look at pricing and full employment. we have seen lumber move you know most commodities will roll over into next year probably going to be looking at deflationary pricing and what you talk about on the program and i agree with is labor participation and why is it so low? i think they'll be waiting longer to make sure that the economy really has longer term inflationary issues before
moving. >> today i have seen calls that look at real yield suppression and if that were to continue what kind of bubble to inflate to become eventually systemic risk how much of a danger is that under your scenario? >> pretty far off. i do think that multiple equity goes higher. right now we have around 21 times. maybe higher 2022 forecasted earnings long term average is 17 times forward. we are expensive but we have way better companies with way higher profit margins so i think it's merited and i could see multiples going higher over time looking at u.s. equities and view them as attractive than other alternatives. >> which is it within the equities buy the cyclicals like the industrials and energy which is
working today but not so much for the past few weeks or technology which always goes back and prove winners >> over time if i'm right i think you get paid for buying growth stocks which is going to include some tech. the part i ligke right now is materials. industrials i like as an underweight. it is not that i expect energy to go straight up and industrials straight down but part of the job running a portfolio or giving advice is where's the risk/reward? i think it is better in energy that could go way higher in industrials most of the companies embedded some recovery have margins that recovered. generally i think it's below average. the industrial sector with 30% earnings expectations year over
year or higher for every quarter through 2022 and probably more risk to those numbers than energy and materials i like the large cap banks over the small cap banks i think they have better balance sheets it is nuanced. over time i think you go back to the growth playbook again because that works in a low rate environment. >> i feel like you two have a phd. am i wrong >> in statistics. >> i think i remember that weshds listen to you, too. >> thanks for remembering that. >> adam parker, thank you. >> good to see you. when we come back, wfells fargo says there's a bright future ahead for a tech company and rivian shares slide as ford will not develop an ev with the company. we'll look at disruption in the ev market.
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market zone, cnbc senior markets commentator mike santoli is here and we have hightower portfolio manager stephanie link back. we'll kick it off with the broader market dow and s&p is rallying. janet yelling joining this hour weighing in on the president's decision she also gave the take on the economic recovery and the rising inflation concerns listen. >> i think we do have to be concerned about inflation. it's reached the level that concerns most americans who are seeing it in their pocketbook when they go to the store to buy food or to fill up their carrs at the pump. i think it's partly a reflection of the fact that the pandemic has had a severe influence in our economy and it's part of the
demand supply imbalance in getting on track but the administration, the white house is doing everything we can to address supply chain bottlenecks that are boosting prices and over the longer run the fed needs to play an important role to make sure that this doesn't become endemic >> describing inflation as endemic. we were describing covid-19 that way. she is a little more inflation concerned i think in that interview than i heard her lately the bond market is reacting on the fed to fight this plags. does that worry you as someone long stocks? >> doesn't worry me. great interview. i'm glad she is addressing the inflation issue. we have been talking for quarters that inflation not all
is transitory why commodity prices are transitory. supply bottlenecks will fix eventually. she mentioned food we all see it. we go to the pump. payinghigher prices for gas. we have to get a control and a handle on it for sure but today's announcement in terms of fed chair powell renominated and brainard are dovish and biden has three appointments to fill i think the fed will be more dovish going forward but working and watching inflation is important and smart and good news for the markets overall removes an overhang and can focus on the economy getting better and the seasonal strength in the marketplace. >> speaking of energy, crude oil, wti down to 74.50 a 5-week low on pace for a worst
month back to october of last year aren't some of that happening before the srp jawboning began but isn't it working the way you look for remedies to high price? >> absolutely. a reason that the markets hasn't really panicked about inflation getting to sort of an escape velocity from here nothing affects the pricing of inflation expectations than the price of gas the target is headline pce inflation. that's a help. i don't think it's necessarily going to dictate everything that goes on from here. energy not as much as other things it is a comfortable level for the economy and the market. >> tech sitting out today's broader rally as yields rise on the back of biden renominating powell peloton among the biggest
laggards a stock bucking the down trend is apple those shares higher despite the report in nikkei saying issues delay the products in key asian markets. we have been back and forth whether apple is a victim like everybody else. >> they are a victim like everybody else they called it out for two quarters over $6 billion in costs that have risen they have a handle on it they have demand story on their side they have the ecosystem on their side the stock is not that expensive. buying stock there is a natural supporter in the marketplace being them but today was interesting. it was value over growth too and speaks to again seeing better economic data in october the atlanta fed at 8.2% gdp for
the fourth quarter but even 4 or 5% is above trend. above growth and inflation usually means value outperforms growth and that's what happened today. let's see if it has legs. >> s&p gone flat wiped out the gains. we were up a few moments ago the dow only up 113 points or so up 300 starting the hour nasdaq in the red down almost 1%, mike what's driving the selling into the close? >> even though you have the equal weight stocks the s&p is up on the day. anything crowded such as the fintech names on the downside today or high concept stocks blasting portfolios today as well as the rest of the market not able to pick up the slack. it's a very much kind of keep
you on the heels type day if you're trying to actively position in the right stuff because all the under-owned things or betting against like consumer staples is rallying they want to confound you. >> groups like consumer discretionary, technology and communications all red right now. we are seeing the big moves in the ev space today tesla is jumping after musk said they'll launch in china around march. general motors after telling cnbc they have a 25% stake in pure watercraft, an electric boating startup in seattle rivian extending the losses of friday after the deal to jointly develop with an ev with ford is canceled ford shares with surging today
so headline driven with the stocks what's happening to the valuations on this given that some stocks are sold on sales. >> no. i know there's no valuation support you have to believe in the total addressable market evs was 4% last year going to 34% by 2034 i actually think that number is probably on the low side but the demand is there. the interest is there. and you either believe in the story and total addressable market to grow into the valuations or you don't. i thought the rivian deal is interesting. 66 billion only very comparable to the other companies. right? so i just thought it was interesting with the amazon partnership. but it is not in my bally wick to own something like that i own called active. that's a delphi spin
it is a different story. it's an auto technology company that does have ev so they have -- the kexist hers are gm and tesla. >> i wonder if you think the ev space succumb to the fascination of the new given with rivian and lucid and ford would argue otherwise. >> the last two weeks with rivian and then blasted higher seems that that industry is now tesla as the kind of store of market cap and the leader and incumbent in the area and then the upstarts you are selling tesla. fighting over the same hopes and dreams for future production and i think the way you have had the sharp pullbacks in rivian and lucid shows you that it's just
kind of fast money pinball right now. i don't want to glorify it more than that. it was hot until it's not and today they don't happen to be. >> i didn't know all electric boating is a thing. >> that's what i said to mike today. >> to me it's the submarine maker owned by general dynamics. not something you own. >> this is a sustainable and environmentally friendly zero emissions version and i don't know anything about it just a guess. >> yeah. s&p selling off. vaccine stocks are rallying today. meg tirrell has details. hi. >> hey check out shares of moderna, biontech, novavax all up today really it seems to be driven by the bad covid headlines. cases in the united states up 30% over 2 weeks now to 92,000
on average per day deaths here still above 1,000. and of course the negative headlines out of europe and austria and germany. not hearing anything else is driving this there's the adolescent vaccine and the whole sector getting a booths as the covid headlines continue to be bad back to you. >> a rare bright spot here in the session. thank you very much. we have lost most out rally here why two minutes to go in the trading day. dow up 45. s&p goes negative. what are you seeing in the internals? >> messy depending on where you look actually on the new york stock exchange you still had a decent volume split it was much more to the upside earlier. take a look at the new highs and lows on the nasdaq this is something we highlighted late last week huge amount of damage piling up.
561 is more than 11% of all nasdaq stocks with a 52-week low with the index 1% off a record high shows you a divide in market that we are in at the moment volatility index perked up earlier. settled above 18 last week i think it is the instability in the biggest cap names. when they are kind of clicking higher it protects the index and the volatility level is low and working in reverse a bit. >> what a stubborn floor 15 has been so we'll close up the session with selling off into the close. s&p will look down in the teens down 13. dow one point up 300 plus. currently 24 points. obviously the powell renomination was the overriding dynamic today.
clearly the wave of covid in germany got attention this morning. the trio of big m&a deals speck lated about with consolation and monster and the earnings season with dell and gap and nordstrom coming up in the week and for now the eyes closely pinned to zoom and urban [ bell tolling ] ♪ dow barely positive. everybody else down. welcome back to "closing bell" i'm sara eisen and carl quintanilla is here and mike santoli. coming up we'll have instant analysis of results. first up stephanie link is with us mike, an intraday record high on
the s&p and nasdaqtoday. both closing down. the nasdaq sharply lower what happened? >> yeah. it's been a very divided market. it's been building up. i don't think it was necessarily said that it's going to be somehow dangerous or has to resochl to the downside but we had a narrowing of the rally average stock not doing great. today flipped it over. profits were taken and some of the growthier stocks that were winners and that's been happening. banks up 2%. looks fine not a bad message about the economy. it's a tough message of portfolio stress that seems to be working the way through the system here. combination of tax law selling people chasing the upside into year end i could draw the different story lines.
you had what almost amounted to a sell the news on powell. i think that's why it feels like unsure footing at the moment but still let's be serious at the precipice of all time highs. >> i wonder if the tax law selling is something to watch for the next five weeks. >> it's something to watch but i wouldn't change in the portfolio for it if the stocks i own i would look to buy more actually by the way, this whole rotation, this is the year of the rotation right? first quarter of this year value outperformed growth. then we had a growth scare in the spring and summer months and then the faang led and then beginning in october as the data started to come in better from the economy you are starting to see a shift. subtle and i think you know i'm
definitely more skewed on the value side of things at this point. cyclical reopen names and heard from so many companies about the economy and how it's reopening and progressing very well from wynn to expedia and ual and i feel good now to the end of the year we have to reassess next year but i think we are in good shape to the end of the year. >> european stocks mixed today as austria begins a new covid lockdown and germany may follow suit let's bring in a guest with a call here. on europe. what are you telling investors to do? >> for all the reasons that were just discussed by mike and stephanie we believe there's going to be an opportunity in this year and next year in europe if you think about european equities full stop, there's basically been at this point a
decade of underperformance part of that has to do with the home bias that u.s. investors have first is market composition. every word and buzz word and narrative leader in the last day and the last year in terms of value,poised to reopening, that is the majority. that's the market composition of the european stock market. two, you have investor positioning. ubs did a study of the self directed investors it looks like the investors have 3% of the portfolio in european domiciled names. the percentage of the msec that's represented by europe is 9% so that is a huge deficit there. the third is the relative
valuation. as of some of the mid market closes today that you were talking about, mid market highs today you had a u.s. market trading 22 times forward earn whereas others are closer to 18. think about the japanese market. japanese market is trading at about 14 so all of the things that we have pushing the u.s. market, monetary and fiscal policy, reopening trades, strong gdp on earnings, that is the same thing that you are seeing out of europe although they have been behind from inoculation from a reopening and further scare today in the closures keeping people out of the trade. >> do you like etfs? just straight into european stocks and bonds >> look. the answer is we like both when you go into multi nationals
you get dollar exposure there and in some scenarios that's good and helpful others it is not you need both. you need u.s. domiciled companies and pro cyclical and value operated think about the same thing in the u.s. financials, energy, health care. also think about some of the long term themes right? we can't talk enough about green tech if you think about what's going on in europe in terms of the green deal being the largest ever deal and source of money pushing into renewables and green technology there and the relative valuations, the internet of things and europe as a huge industrial producer and marrying thatindustrial prowes and heavyweight status with a digital prowess. they're undervalued and underinvested in and as we have
capital flowing from universe to universe this is a place we see opportunity in the next number of months for the same reasons here and well into next year and beyond when the u.s. i think starts to deal with issues of real inflation and interest movement. >> what else is the euro is weak went down another 0.6% big advantage. >> yeah. there's work today that easing tariffs between the u.s. and china could be an out of consensus equity tailwind. i wonder if we can extrapolate that to the u.s. and the europe. >> i think you absolutely can. not only the opening here and the continued conversations but last week was a big moment with the virtual conversation with biden and with xi. right? that shows that what we came
from in the last administration is going to be much less icy at least slightly warmer and that's great for global trade full stop so i think all of these things are pointing the same direction. sara mentioned the euro. so whether from our perspective whether you talk about long term investing or simply wanting to make a trade i feel more comfortable going in with the tailwinds they have and then in the u.s. which face a great deal of headwinds. >> good stuff. thank you so much. zoom video earnings are out. let's get them >> shares are soaring. zoom shares up 8% after a beat on the top and bottom line we are seeing a $1.11 a 2 cent beat versus what the street expected.
that's over a 30% increase we also want to know about q4 eps guidance came in slightly higher than the street anticipated they gave a range $1.06 to $1.07. the stay at home stocks and we can see with this latest numbers just early eps and revenue a beat and that's why the share -- stock up 7%. back to you guys. >> the opening quote from zoom founder has the hybrid workforce mentioned. thank you. don't miss a first on cnbc interview on wednesday before steph goes, a last trade idea from you. what is it >> palo alto we talk about total addressable
markets all the time the management said they believe the total addressable market is 72 billion they're also seeing an acceleration prior to that the quarter grew 11%. seeing an acceleration there with a refresh firewall cycle going on sales execution is better than expected and new products help billings up 28% year over year at the last quarter and total revenue grew 32% year over year. this one i think is a go especially given the discount to its peers. >> all right meantime urban's out let's get to courtney reagan >> high there. urban is out with the third quarters with earnings per share of 89 cents. beats estimates.
stronger revenues than expected. there is no guidance on the release. the company does talk about being excited and that november comp sales to date for all brands accelerated from the q3 rate and the q3 rate net comparable net sales increasing 14% and all in the digital channels double digit growth in channel and negative retail store sales due to reduced store traffic all in both stores and digital up 5%. up 7% at urban outfitter just investors are disappointed down 10% from the lack of guidance or most of this is coming from the website and not from the stores and heard so much about shoppers wanting to go back to the stores hopefully we'll get more color on the call. back to you. >> yep
33.50 goes almost back to the interesting out month. we talked about the overall macro picture of the consumer. the strongest he's seen in his career. >> yeah. absolutely i think that the consumer is really firing on all cylinders we see the holiday sales expectations beating records i think some is financial strength some of it is getting back to tradition. things that we have been missing out on coming the holidays and comes to giving gifts, gathering. we know phil talks about the travel a lot some spending diverted back to services again, too. >> courtney on urban and thanks to stephanie link. up next talking about how the president's renomination of fed chair powell could impact your portfolio and the economy.
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stocks closing the day with the dow just barely positive the nasdaq down more than a percent. earlier we spoke with treasury secretary yellen on president biden's renomination of jerome powell for fed chair and brain around for vice chair. here's what she said. >> i'm very pleased with his choice i had the pleasure of working very closely with both jay powell and lael brainard and they are consummate professionals, support an independent fed, are completely committed to the fed's dual mandate of maximum employment
and price stability, and have amassed tremendous records i have confidence in them, and i believe they'll have broad support among congress and the public, and can be counted on to do an excellent job. >> jeffrey's chief market strategist and former pimco chief analyst joins us had to get the band back together of course we thought of you. paul, you must have been absolutely thrilled about the pick today am i wrong >> absolutely thrilled i agree 100% with secretary yellen i thought it was a marvelous combo that president biden selected and i think not just for the reasons that he articulated is they earned the jobs, but also, i think they're the right people for the jobs ahead in the next four years to a tighter policy
and they have earned the bona fides as doves and now i think they'll have to become very pragmatic and judicious hawks because that's what the economy requires and i have all confidence that's what they'll do. >> this transition potentially from dove to hawk, just i don't want to say that it's a tougher second term because who could have predicted the pandemic and what he had to do to fight that? but he is going to face a challenge on the tradeoff between acting aggressively on inflation and trying not to choke off the recovery what do you think will happen? >> yeah. i couldn't agree more and i think he has a different committee without randy and rich he will have a new governor. two new presidents in dallas and boston that are probably going to be picks that are much more aligned with the biden administration than before
so jay's got a very different job ahead and i thought the most interesting thing is seeing them up on stage with the president it was a team they put up there. it's sort of took the chairmanship a little bit. and made it seem like this is more not just the jay powell show and i think the market's going to have to adjust to what that might mean. i think there's a little bit more vice chair in the mix than maybe we're used to and that's usually a behind the scenes thing so i think the market will have to digest everything and then what we get for the vice chair on regulation as well as the new governor and could be something that appeases the progressive wing because i'm sure they were not happy with what happened today. >> paul, pimco today libby wrote maybe a sign of going back to normal marks a return to continuity since the '80s
the norm for presidents to reappoint the sitting fed chair and may have been appointed by the other party. how constructive is that long term >> i think that is a very constructive we don't want radical change at the fed. under chair powell we had a profound change in their framework which is for the long haul so actually i think seeing chair powell work out the new framework on both sides of the cycle on the easy side but also on the firming side is a good thing. so i very much agree with the old colleagues at pimco. >> we did talk about climate change because it's something president biden mentioned during the announcement and yellen said that climate change poses a major risk for
sta stability and the economy. is this dicey for the fed to go down this path >> i don't think so. i think the global central banking community, all the big developed market central banks head in this direction i think the market would have been more -- had more problem if jay wasn't the leader. if this was a much more politicized process. it looks like -- we will have a nice well balanced debate about it i just -- i come back to the first comment which is sort of like for me is thinking about a new jay powell, doesn't have the two vice chairs from his party on either side and more of an appeasement game it is going to mean more inclusivity, focus on equality and climate change as you point out. and it's going to be a very
interesting tightrope to walk. i'm still stuck in that camp that doesn't believe that the inflation story is going to metastasize in a major way i think the job could be easy on that front next year that's the important trigger is how much inflation does he get >> paul, it is easy to watch the policy wheels turn, but also, the politics wheel i wonder what you make of powell's almost legendary ability to reach out to the hill and serve him in the second term >> i think he is well advised to do that and i think given the fact that the fed is creation of congress it makes sense for the fed chair to look at congress on sides of the aisle as his boss
and check in with the bosses is a good thing to do it seems to me and it's also good for the country and i agree with david that it's going to be a change mix in the lineup at the fed but i think there will be universal coa lesing around the proposition that zero policy rate is not the right rate for the longer haul. that we need to get off of zero. the timing, the conditions and so forth are open for debate but i think that will be a unifying principle with the new fed that will be rolling out in the months ahead is getting off of dzero for the federal funds rate is the right thing to do and i think there should be uniformity of opinion on that proposition. it is just a matter of timing
and the ways and means of doing that zero ain't normal. >> liftoff is the word du jour on the fed what do you do given the inflation call and what will happen to the rates? stocks and bonds >> i think we have had an amazing year in stocks 10-year note stayed well behaved. previous guest talked about five-year break even this is really a great backdrop. i think the one thing we worry about is a hawkish mistake going too far and learned the lesson and i don't expect it to be a problem and then through the teething pains and a chop here i think you have got a great year to look ahead to risk assets in 2022. >> paul, david, appreciate it as always zoom video shares are
shares of zoom initially popped but now in the red. that beat on the top and bottom line joining this afternoon is rbc capital managing director. why do you think the action here >> yeah, hey thank you so much for having me. i think the volatile movement is a function of there's a lot of stuff here to like and that people can pick on right? zoom is never going to put on the world beating quarters like in the pandemic but looking at the numbers not as bad as feared the consumer and base doesn't seem to be churning off. i'm net-net inclined to look at positively. >> what we mentioned and tease before the break to hear from the call, what will your ears be
pinned to? >> yeah. look i want to hear about how the post-pandemic future looks like for them what trends are they seeing at the consumer level and then incremental commentary around the additional non video growth drivers namely zoom phone. adding seats 10k plus seats saw double digit growth in revenue and the commentary is positive. >> you have a highest price tarkt on the name. $450 which is way above where the stock is right now how does the tide turn this feels like a peloton story where people decided it was as good as it gets and the future looks different. >> i think it's fair with peloton gyms are back and people are going to the gyms with zoom the way we work has been irreversibly changed.
we are not going back into the office five days a week and relying on video conferencing t that's reliable and zoom has the ability to become a much broader enterprise communication collaboration platform getting into zoom phone and tap and contact center, events management there is a long, great future for zoom to be a big platform on its own. >> in their release they talk about the innovations showcased at zoomtopia i wonder, given the product offerings is return to office at scale something they are dreading or welcoming or somewhere in between >> yeah. it's a good question i can see it cutting both ways usage will go down but i also think as the offices return and i think that will
happen maybe q1 and q2 next year increases the replacement solutions. high bid work is harder to solve. half the team in the office and half distributed it is over legacy competitors and i think the return to office over the next year is a positive for zoom >> crazy market move after hour just thank you for being with us. >> thank you. spiked and now it is down 2% don't miss a first on cnbc interview wednesday on "squak box." mike looks at whether there's a red flag for consumer stocks plus the space race getting more crowded after a fourth company
time for a news update with frank holland. >> hey there at this hour the cdc advising americans not to travel to germany and denmark because of rising covid cases there both joining the list of the nations with the highest covid risk levels. coming off the list is israel and aruba but still high risk. shawn pernell is suspending a campaign his wife is awarded sole custody of the kids. he denied allegations he hurt them. container congestion is declining at the ports there's 33% decrease of containers they delay for another week challenging heavy fees that are
not moved. concussions with hinder brain development. researchers finding three to five concussions have the potential for long term disruption those changes have been linked to diseases and mental disorders. on the news, firing a rocket at an asteroid. what nasa hopes to learn, tonight at 7:00 eastern, that is the latest sara, back to you. >> frank, thank you very much. let's go back to mike santoli now taking a look at perm savings among consumers i was so hoping you would do the chart. coming back down. >> sometimes i guess it right. i try to figure out what you would like to the market is comfortable with the consumers are set up wage growth is strong. employment is growing nicely this is the equal weighted consumer staple. no real signs that the market is
positioning for some kind of stall in the consumer strength but take a look at savings rates. total savings through the pandemic massive bolts. the cares act and the stimulus was a big part of this putting money in the accounts. huge surge now basically come down to the pre-pandemic trend why that's not necessarily outright negative people did spend it down and it helped them obviously keep spending if they're unemployed but clearly much more reliant on wage growth. employment better opposed to the reserve of spending power in accounts. >> it was a big argue. for a listening time for the bulls of pent-up savings to be spent.
but there's strength that the spending is so strong as savings came down. >> it is a self-sustaining basis opposed to people eating into that cushion that was built up through the pandemic. >> leaves a question mark for next year. thank you. a nba player calling out nike for doing business in china and criticizing lebron james for a massive deal with the company. tesla getting a pop today and the stock up more than 60% on the year srsewidiscuss whether this ev diupr ll continue to rally.
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nba star enes kanter slamming nike for doing business in china eamon? >> she said he got death threats after the nba game over the weekend and said none of the blowback from wearing sneakers critical of the chinese government on the nba court will keep him from standing up for human rights he continued to criticize americans' biggest companies including nike for a double standard he says on human rights saying they're willing to call out abuszs in the united states but stay mum on china. and unfortunately we don't have that sound bite for you right now but saying is that some companies are willing to
participate in the domestic debate here in the united states but not criticize china. i think we have the sound bite. >> so we need to call this companies like how it is >> i asked who he works with on this and said it's outside groups and don't want to be named with the threats that they have received and asked him what he hopes to achieve with this. he said he wants american companies to get out of region in china where they are abused and said he wants companies and countries to boycott the 2022 winter olympics in china we asked the nba and nike about both comments. but both of them declined to comment. back to you. >> not a new issue for nike. right? i've pressed ceo donahoe about
this issue it is tough to speak out with a billion-dollar business in china on the demand and supply side and would argue it's spoken out on this issue and criticized china and why it was the subject of a boycott from the state media and from consumers. >> sure. >> earlier this year he is not a nike athlete never has been lebron james, i don't know if you saw, came out against him asked about him in a press conference not someone to give my nrlg to, trying to create an opportunity for himself. what do you think about that having spoken to kanter? >> he and lebron james both talk past each other on the weekend he is striking out at lebron james saying he is choosing sort of money over morals lebron james said he didn't say
anything to me in the hallway. kanter said it's the other way around somebody is punching up. kanter down low compared to lebron james maybe everybody is in the nba and also did go after michael jordan over the weekend saying he is not activist enough for the black community and not a person afraid to punch up at very big figures in business, politics and basketball. i asked him if he thought he was making too many enemies to do good and he said he doesn't think so and it's getting the attention, sara. >> that's done and certainly not the last to talk about it. eamon, thank you. next shares ford and rivian in opposite directions we'll discuss the auto old guard and the new players next
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shares of ford and rivian on the move today ford still holds that 12% stake in the ev makers newcomers look to disrupt the incumbents joining us is jed dorshimer to talk about this frenemy dynamic. there's the gm/ford struggle for the stake and now there's this back and forth on co-development can you explain to viewers what rivian is right now? >> i think rivian is start-up trying to ramp production of an electric smart utility vehicle in pickup truck. i think the bigger question is, what are the traditional oems doing? out today i think news that gm bought a stake in an electric boat company which means they're getting into the boat business so i think there's a lot of
different signals that might be confusing to the market at this point in time. >> what do you make of those -- is the argument that some legacy oems need to spin off the ev divisions make sense in general in. >> i think it does in general in the context of there's a book of "who says elephants can't dance" and an experience of transforming ibm and a more interesting tidbit in the book is when he started the pc division he had to -- he had to do that in another state so that the culture wouldn't be infected with the mini and mainstream and looking at the companies it is not that they don't have the capability it's really getting into the culture and spinning those out might be a way to get around
that absent that, i think the incumbents -- let's look at uber how many taxi drivers did uber train to code? i think the number is zero the same is happening in terms of the auto oems trying to move into the ev pace. >> you were an adviser to the obama energy department. i'm sure you are following the transition and the moves from the biden administration and a bill which prioritizes evs made by unions. how do you think that separates winners and losers and the biden policy to see? >> i don't think it does un unions and physics don't go hand in hand. however, i do think that looking at the larger and the broader energy transition and the move to electrification there are
going to be winners and losers we pay special attention to the semiconductor industry and a wolff speed to focus on making them more efficient going from silicone to silicon carbide so i think there's nuances. it is a great time to be lot ofs going to be generated. just setting things in terms of coming back to whether it's a yunion or not, policies will destroy more value than create it >> finally, just talk about some of your favorite names i see it's a nice mix. you got some plug, some fuel cell >> yeah. we like generac. similar to what you're seeing with a tesla
most investigators look at what they make in term of generators but i think the company is much more i think as you're seeing more sigma climate events become a mainstream that will carry the company into the distributed energy platform that they've developed. i also cover, you know, other technologies like you mepntion plug and fuel cell hydrogen taken a step back as people start to look at the round trip energy to create that fuel evs are definitely the darling in favorite at this point in time >> generac not quite as sexy we get your point. thank you for joining us >> thank you very much up next, shares of astra
soaring in today's session on the back of the kracrucial launh we'll be right back. machin today, your customers want it all. you have to deal with higher expectations and you have to lower wait times. with ibm, you can do both. your business can unify apps and data across your clouds. so you can address supply chain issues in real time, before they impact your bottom line.
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. astra space sending stocks higher talk about the significance of this over the weekend. >> good to chat with you guys. absolutely, a big launch for astra but the broader space race that's happening right now really coming into its own astra for its launch just over the weekend achieved orbit for the very first time. this came after a string of launches that came close or reached space but didn't make it all the way to orbit which is what customers putting satellites on these rockets are really intending and really aiming to achieve. this moves astra out of its test campaign and into a truly commercial and operational capacity this is a company that wants to use the very small rockets they are about 40 feet tall. if you compare this to the falcon nine rockets in terms of
aircraft comparison, spacex rocket rockets might be the jumbo, these are the cessnas. they are kick and easy to build. this launch represents it becoming the fourth u.s. company to privately fund and develop a rocket that's reached orbit. they are joining a small group of companies and rocket lab that have all achieved this a really big step forward in the company's overall goals. >> michael, what's next for astra? >> it's about two things building up its launch cadence is what you call it in the industry or how quickly it can turn around, produce and launch rockets and improving the overall capabilities of its vehicles astra ceo said they have about 50 kilograms of payload they can
launch with current variation of their rocket 3.3 they are trying to improve that and get to a rocket 4.0 and beyond to carry more payload to orbit. even at a larger payload, that would still be a smaller group of satellite such add cube satellite. not launching anything school bus size or carrying any people to orbit but this is a very interesting part of the growing small rocket business. >> any other company we should be watch ing? >> the main competitor is rocket lab which is operational in launching things to orbit. that's in the small rocket space. we have two others in the small and medium size of the market which fire fly space and relativity the latter of the two which is really interesting approach, 3-d printing their entire rockets and sending them tout the launch pad. there's a lot of different ways froech this in size and how people are building them
we'll have to see who wins in the long term. >> so much going on. thank you for joining us good to have you we'll check back in. we ended the day barely positive it gave up earlier gains the celebration over jay powell proved to be short what are you watching for tomorrow >> this market was wound pretty tight. equity exposure overall pretty high and the strength had been very concentrated lately in a relative handful of names. today felt like a flush out of things that were crowded best people were making and there's such an undertoe of weakness in these names that are kind of busted growth stocks that people, i guess have concluded they will not help me through the rest of the year so i may as well ditch them that's the portfolio shifts that are going on right now this is a little bit of a
cautious looking reversal in the market it doesn't necessarily tell you how things will go still in the strong seasonal period you don't have a lot of mu macro inputs after the powell announcement we'll see if upward drift and people regrouping here and takes hold as we get into this holiday week which usually lighter volumes. usually you get an upward bias >> covid response took a backseat today because of the powell news. some headlines hitting now 3 million people got their booster over friday, saturday and sunday and the white house coordinator says as far as lockdowns go, we're not headed in that direction. it's going to allow us to celebrate ourselves from europe on the narrative >> no doubt about it don't know if that was part of why yields were higher the dollar was higher. you had this dynamic where the market has not felt as if the u.s. was headed in that direction, right or wrong. it seems as if strong gdp,
getting baked in for the fourth quarter, consumer looks okay it's matter of where people laid too heavy a bet in terms of individual part of this market going into the final few weeks of the year. >> who was not hire was bitcoin? >> i think the same people own those things >> very strong dollar today. s&p closed pretty much flat. dow up thank you, carl. that will do it for us on closing bell fast money begins right now. live, inside new york city time square, i'm melissa we're all over the action shares of zoom. the stock turning negative after a post earnings pop. it's bringing the latest from the quarter straight ahead a bold call on bitcoin one says the crypto currency is headed to