tv Worldwide Exchange CNBC November 23, 2021 5:00am-6:01am EST
here is your top five at 5:00. stocks may slide into turkey day. futures are lower concerns about what else, rising inflation and possible fed moves moving the markets. treasury janet yellen expressing how important jay powell's second go around will be in combatting rising inflation. her comments ahead. the u.s. set to potentially release oil from our critical spr reserve but is opec set to fight back if we do? they're firing fresh shots in the growing global fight for fuel. covid concerns ahead of
thanksgiving the fears and some positive news. speaking of the holidays, your morning rbi on what may be an absolutely bonkers week taking shape for travel. airlines navigating a massive jump in flyers it's always happening on this tuesday, november 23rd, and this is "worldwide exchange." good morning, good afternoon, or good evening and welcome from wherever in the world you may be watching i'm brian sullivan and it is good to be back with you after what has been a crazy past few weeks, globe hopping and show hopping let's jump in and check your markets and money. stock futures are down a touch about .2, .3%. dow futures now slightly higher as well. that's the way it's going to go. thursday is thanksgiving, we have a half day on friday.
so very possible we see a slow in trading today ahead of the thanksgiving holiday as well just keep that in mind which can sometimes make the moves more volatile. not a lot of volume so any price swing may move it, dow up a touch, nasdaq down the dow monday notching a slight gain nasdaq and tech down about 1%. the small caps getting smaller, the russell 2000 fell for the fourth session bonds playing a role in the selling, the ten year back up above 1.6% with voices saying the fed may have to raise rates, that's not the taper, that would be an old fashioned rate hike. this is big. we have to check the price of oil this morning there are more calls from the members of congress to ban oil
exports or release oil from the strategic reserves looks like one is going to happen a release could happen as early as this morning. we're hearing 35 to 45 million barrels coming out over a period of time and it could be in conjunction with other countries. that announcement could come as early as today if and when it does we'll bring it to you. the sources saying that release, or at least announcement of the release is likely to happen this morning. crude oil prices down 1.5% over that overseas down about 1% around the world, a mixed session in asia overnight, the h hang seng the biggest loser in the region we are seeing the market down about .6, .2 depending on the market, new covids concerns in europe regions of germany may shut down
for a couple of weeks. this morning's top stories otherwise. silvana is here with more. >> the biden administration says it has no plans to implement lockdown measures for future covid surges the white house covid response coordinating shooting that down as parts of europe reinstate their own restrictions the administration instead saying it will rely on vaccines and therapeutic treatments to fight another potential wave of covid cases. tesla is beefing up its legal department, the e.v. auto maker added a former s.e.c. and doj attorney to its ranks as managing council tesla has repeatedly faced issues with the s.e.c. and other agencies over matters including tweets by ceo elon musk and other things and italy has fined apple
and amazon for alleged collusion. the fine centers around accusations the pair engaged in anti-competitive behavior around the sale of apple and beats products apple denies the claim and plans to appeal the fine. interesting news on covid. we hear about the rise in things not the drop i'll give you a headline here. the decline in hospitalizations in florida is down 92% in three months there are fewer people in the hospital from covid in florida than any time since the very beginning. so some very positive news there. we'll wait to see what happens here with the winter weather. >> exactly >> thank you very much. >> you got it, brian. it is that time of year again when wall street firms put out their projections and price targets for next year. so far the ones that we have seen have been bullish on stocks overall.
for example, goldman sachs, and popper sandler the 5150 target what does your first guest today think of all this? and what is his projections? michael sheldon, chief investment officer at rdm financial group. good to have you back on. >> good morning. >> are you as bullish as goldman, piper and others? >> i don't know about the other forecasts out there. but i think we're moderately constructive for next year the reason is we ultimately see a handoff from fiscal and monetary policy to the private sector look at the state of consumers or businesses, they both look positive headed into next year another way to look t a it is 2020 was all about pe expansion coming out of the downturn this year, 2021, it was really eps driven so we've seen about a 45% growth in earnings per share. as we look ahead to next year,
we'll probably see some moderation, see pe sort of stable or roughly stable with this year but likely to see upper single digit eps growth which should see an upside in equities this year. >> this year sounds like was the multiple expansion we hear about. the expansion of what the market would allow for price to earnings ratios. a little bit more comfortable letting them run hot because of low rates and growth next year a fundamental story looking at company's economy statements and balance sheets saying you had a year, let's see what earnings you can throw down. >> the big story next year -- well, the two variables will likely be the fed and inflation. inflation is top and center right now. on that front our feeling is that while rates inflation right now is multi-decade highs we're starting to see on the margins a
little bit of improvement. a couple of things for our viewers to keep an eye on, one is the inventory to sales ratio. over the past year, business sales are up 15%, but inventory up half of that. if you look at the business to sales ratio, we're seeing some stabilization and a creep higher the other thing i point out is the baltic dry freight index, which is a measure of shipping costs around the country coming out of 2000 it was around 400 and it shot up to over 5,000 which is hard to believe but the past few months or so it's more than cut in half so we're seeing shipping prices come down a little bit and maybe that's a sign, along with the business to sales ratio, that inventories are starting to catch up a little bit, which should take some of the pressure off inflation as we head into next year. >> i'll see you and raise you a bit, the drewry freight index,
it's still well above where it was a year ago but down about 15% from the peak. so you think maybe, just maybe, the super inflation story is starting to cool off a little? >> yeah, i think that's an important story certainly. and the reason it's important is the two big variables for next year is the fed and inflation. if inflation stays around 6% or so or goes higher, that really puts the fed more into play next year and if the fed becomes more aggressive in their policy, that could lead to a lower or decline in ratios which could lead to market volatility next year. those are two key things we'll be watching as we head into the next several months. >> bottom line, you're mildly constructive but not out pounding the table with a bullish call on the markets because it's going to be a normalized year, fair to say >> yeah, there's risk, the fed, inflation, valuation levels are
not cheap, but economic cycles typically last a number of years as opposed to months or quarters so barring the fed stepping on the breaks which we think is probably unlikely we think there are gains ahead in the new year and the key is to be diver diversified, we're overweight tech, health care and financials and looking for growth areas in opportunity. >> i don't know what normal means but i'll take it next year could be the most boring year in the history of humanity and i'll take it. michael sheldon, have a great thanksgiving appreciate it. >> thank you. aren't we all ready for boring i'll take boring when we come back the big money movers not boring, one retailer taking a dive on the back of its quarterly results. look at that chart. shares of zoom on the decline as the end of the pandemic looks poised to hit the
stay at home darling we'll look at the sector as all of us start to go back to the office and later on, progress on the ongoing supply chain, what officials at this country's busiest ports are saying about the race to get goods off ships. you just heard about it, but you'll hear more if you stick around ♪ ♪ amazing... jerry, you've got to see this. seen it. trust me, after 15 walks ...it gets a little old. [thud] [clunk] [ding] ugh...
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exclusive experiences, like the chance to win tickets to see watch what happens live. andy cohen: hey! it's me! and tasty recipes from bravo's top chef cheftestants that'll have you cooking like a pro. the longer you've been with us... the more rewards you can get. join for free on the xfinity app our thanks. your rewards. welcome back, time for your big money movers, three key
stock stories of the day stock number one, urban outfitters shares, the one we showed you the mystery chart getting crushed despite the retailer reporting better than reported results sales were driven by strong double digit growth in digital versus a decline in retail sales due to lower traffic i apologize i gave you only positive news but the stock is down 12%, i have no idea why good was not good enough but i just made that up. stock number two, agilent, higher fourth quarter profit on down sales but total revenue growth saled on the previous quarters and the company is signaling lower than expected sales guidance for next year, that's why the stock is down a big story here comcast, disney, "the wall
street journal" reporting disney may pull much of the content to hulu and make it exclusive to our streaming service peacock. nbc owns a third of hulu, disney owns the other two thirds. if nbc decides to pull its content it would be removed by next fall. then you wonder what does disney do if hulu becomes a disney product, do they shift to disney plus still on deck. samsung, reportedly making a big investment in texas. picking a new home for its $17 billion semiconductor factory. the city that will be housing that major investment still to come >> announcer: today's big number 88%. that was the jump in electric
vehicle sales this year through october over the same period in 2020 according toresearch firm ward's intelligence. that makes up 7%f e ta2. othtol car market don't settle for silver. #1 for diabetic dry skin #1 for psoriasis symptom relief and #1 for eczema symptom relief. gold bond. champion your skin. this is the new world of work. each day looks different than the last. but, whatever work becomes, the world works with servicenow.
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europe and that is true sort of. because cases and hospitalizations are only rising now in certain parts of america and europe cases and hospitalizations both crashing in california, texas and florida. in germany, which we hear a lot about these days is seeing its outbreak in a few, mostly unvaccinated pockets and more rural areas. there, like here is a lot of about vaccinations look at this stat, overall covid related hospitalizations across the united states are actually down 51% from a few weeks ago and down 43% from this same week last year. that's right lower. by half. florida, down 92% in three months they've never had fewer people in the hospital since the beginning. the warmer states, they got hit months ago when it was hot and everybody ran inside
but here in the northeast the weather is getting colder, which means we're all going to go inside as well again which means experts think we, northeast, new york, new jersey, boston, are next to get a rise in covid cases because there are still a few million people in new york and new jersey who are not vaccinated let's talk about that and how the area hospitals are preparing for an uptick over the holidays. the president and ceo of university hospital in newark, new jersey, doing gods work, is back with us doctor we appreciate it. i try to make a positive point about the efficacy of vaccines that case counts don't necessarily tie to negative outcomes anymore, thank goodness it looks like you have a data point that lines up with that. at this time last year you had 50 patients in your hospital, as of this week only 3. good news. i'd like that number to go to zero what are you seeing, what are you expecting?
>> thank you so much for having me again we are encouraged by the fact that last year we had multiple number of patients than we had now. but we're worried about increased cases. and unfortunately we're seeing that in the northeast and highly vaccinated areas as well a couple of reasons for that the first is waning immunity there's significant evidence now that after six months for pfizer and moderna and after two months for johnson & johnson, a booster is needed to actually prevent infection while those infections if you get them while vaccinated are much less severe, you can still spread it to vulnerable people and the way the epidemiology of this virus seems to be going is that the pockets of the unvaccinated exist serve as super spreaders to the vaccinated who have not gotten their booster yet. so we are depending on folks getting their booster so we don't have an increase in hospitalizations again and in new jersey we're seeing a higher percentage of
hospitalizations from vaccinated people and seeing seniors being the fastest rising age group being hospitalized again we're not out of the woods, we have to move on, getting folks to get their booster and getting vaccinated if they have not yet. >> we knew we were going to get so-called breakthrough cases we knew that there is no vaccine in the world that's 100% effective, except maybe polio and smallpox but that in mind are you seeing the breakthrough cases coming through your hospital being less severe we all -- the reality is, it's not about the case counts as it should be about the outcomes is that correct? >> that's becoming more and more the case yes, breakthrough infections are much less severe however we're seeing a trend that folks that have been
vaccinated more than six months ago do have more severe disease than they did when they came in three months ago or more recently than that so it is important for everybody to get the booster, every adult in the country should get a booster. talk to your doctor, turn back the clock, see when you got your primary vaccination. we have to move on from this we have seen over 3,000 overdoses in our community, our hospital is filling up with people who have delayed and deferred their care. we cannot with stand another covid surge anywhere near what we saw in 2020, unfortunately, but also the winter peak we saw last year. we cannot handle it and i think that hospitals across new jersey and the northeast and certainly across the country are seeing significant surges, like michigan, cannot handle this if folks don't behave responsibly and get their booster. >> i'm going to say a dirty word on the air, doctor, which is seasonality. i know last year you couldn't
talk about it, seems like people are coming around on the idea that you go in these seasonal waves where people go inside whether you're in an area that's so hot you have to be inside for air conditioning, florida, texas, arizona, nevada their summers are like our winters. what are you expecting from this winter is it going to be severe as last one or a more mild one from a case outcome perspective but still some kind of third or fourth wave pop? >> everybody expects to see an increase in cases. but if people are fully vaccinated and have gotten their booster they can still gather with family this holiday season fa safely and we will not see that translate to severe cases and hospitalizations if people delay their booster say i had two and done and still gather with family, gather with
unvaccinated people, we will start to see hospitalizations rise again just as we're seeing in the state of michigan, which is a highly vaccinated state so again, i think we cannot afford to turn backward. we have to move on with what i can't even credibly call an aftermath yet because we're still within this. but the aftermath in public health and our community is something so significant we need folks to do this >> doctor, just praying that this year will not be as bad as last year, but thank you to you and all of your team who just -- they deserve about a two-year vacation once we get to the other side of this thank them and happy holidays to them and you and your staff. thank you, doctor. >> thank you so much. >> you're very welcome. let's get a check on this morning's other top headlines, including the continued disbelief and mourning in wisconsin, some kids still remain in critical condition
francis rivera is there with that. >> reporter: the community in a state of shock after five people were killed and more than 40 people injured when that suv drove through the annual christmas parade the town holding a candlelight vigil. the five who were fatally injured included a bank employee, three members of the walking dancing grannies and a member's hospital. the suspect was taken into custody booked on five counts of intentional homicide. the house committee investigating the riot is zeroing in if on more allies of president trump. they issued subpoenas yesterday for five witnesses who they say helped organize the rally. among those on the list, former trump adviser roger stone and far right radio host alex jones. both men spoke at the rally.
stone said any stiemt, claim, insinuating or report alleging or even implication that i had any knowledge about any unlawful act is false stone said he and his legal team will figure out to move forward. last week steve bannon was indicted by a federal grand jury and charged with contempt of congress for refusing to comply. the nba handing down punish for sunday's incident in detroit after james hit stewart in the face piston's coach said stewart needed eight stitches after the hit. both will be eligible to play in los angeles on sunday when they rematch. an annual warning from firefighters do not put frozen turkeys in a deep fryer. firefighters put together that
demonstration, they say it's a recipe for disaster, a frozen turkey can cause boiling oil to spill out of the fryer don't throw that frozen turkey in the pot of oil. you better start thawing that turkey right now about if you want that turkey on the table. >> yeah. that's a -- that is news that we can use. i will say that. i never thought about throwing a 20 pound frozen turkey into a giant boiling pot of -- after a few cocktails in the morning with grandma and grandpa, people do weird things. >> that's what gets people in trouble especially when it comes to a certain kind of conversation at the thanksgiving table, too, you want to stay clear from. >> it's not thawed yet, don't worry about it, throw it in the bucket, make it quick, i'm hungry thank you, have a great day. happy thanksgiving if i don't
see you. some tech taking it on the chin some of the sector's most high profile names face a selloff here to layout whether the recent rebound has hit a wall. reminder, follow our podcast if you haven't already it's called, you guessed it, "worldwide exchange. it's on apple, spotify and all the major platforms. dow futures turning around they're in the green we're back after this. 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. predicting and managing operational issues that's why so many businesses work with ibm.
♪ ♪ xfinity rewards are our way of thanking you just for being with us. ♪ ♪ enjoy rewards like movie night specials. xfinity mobile benefits. exclusive experiences, like the chance to win tickets to see watch what happens live. andy cohen: hey! it's me! and tasty recipes from bravo's top chef cheftestants that'll have you cooking like a pro. the longer you've been with us... the more rewards you can get. join for free on the xfinity app our thanks. your rewards.
the wind out of tech sales but the dow seeing more signs of life and that trend looks to continue right now relief at the ports. officials at this country's busiest shipping complex is offering optimism on their efforts to ease the supply chain crunch and your morning rbi and maybe no relief for all of you flyers hoping to avoid long lines and delays at the airport this week. we'll tell you why, it is tuesday, november 23rd and you are watching "worldwide exchange." welcome or welcome back, everybody. and good tuesday morning, it's 5:32 on the east coast here's how the money is setting up the day the stock futures are mixed.
you have the dow going up. technology going down. the nasdaq down about 1% yesterday, kind of a big move for tech dow rising slightly and that's what we're seeing with the futures. dow futures up a couple of points nasdaq down 42. the russell 2000 also fell for the fourth straight session in a row, small caps have been on a tear, cooled off a bit on monday, really the last four sessions also cooling off lately, the cryptos, bitcoin is up a little bit today at 57,400, ethereum at 4,200 but the massive rally stalled out a bit as of late down about 7 or 8,000 at the peak on bitcoin. also stalling out is the price of oil the price of oil right now at about 75 and change here, just above 70 overseas this after running above 80 recently. you have calls from members of congress to ban oil experts or release oil from the strategic petroleum reserve or both.
and it looks like one of them is going to happen. sources say an spr release announcement could or likely will come as early as this morning. we're hearing 35 to 45 million barrels coming out over a period of time and it could be in conjunction with other nations india, announcing a 5 billion barrel release it could come in conjunction with other nations but the announcement could come as early as today if it does, i'm told it will, we well bring you the reaction and analysis around whether that move would be a good move. there are other big stories happening as well that involve higher prices including janet yellen's outlook on the price spikes gripping america. >> yellen says fed chair jay powell will have an important
role fighting inflation as in the second term as fed chief the biden administration is doing everything it can given the severity of rising prices for a wide range of goods. >> i think we do have to be concerned about inflation. it's reached a 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 cars at the pump i think it's partly a reflection of the fact the pandemic has had a severe influence in our economy. >> amid ongoing price spikes and supply chain crunches, the heads of this country's busiest ports say they're seeing progress in getting goods off ship, the port directors of long beach and los angeles say they've seen a drop
in 33% of aging cargo on their docs, and they'll delay fines. and samsung has apparently picked a home for its $17 billion chip making factory here in the u.s. the company has chosen taylor, texas for the site of that new facility according to reports. texas governor, greg ablbott is expected to announce that later today. it comes as president biden pushes to expand america's semiconductor chip production. >> more good news for the texas economy. >> yeah. >> thank you very much. >> you got it. back to the markets and your money and a big focus on zoom. really a company that nobody had ever heard of two years ago suddenly dominating our work lives. that stock is well off its highs. talk about it in technology in general, joe calina, joel good to have you back on. >> hey
>> what's zoom's long-term future, with all due respect to that company, you have more competition with teams and webex and others but everybody i know is zoomed out. if they never do a zoom again it may be too soon. what's the outlook >> i think a year ago we talked about the fear of being at the peak zoom and zoom fatigue setting in here we are a year later, the growth story is dead we had the lowest upside since they became a public company the lowest net ads since they've been public as well. you mentioned microsoft teams, they're the gorilla coming after them with aggression microsoft told us in july they're up to 250 million. and they're planning to work with facebook or meta, whatever they're called now, to see what the remote work places can look
like in a virtual world as well. so microsoft is investing heavily. they said before they plan on going after zoom with all they have and eating their lunch. so zoom, i would not -- i'm in the camp that rallies had to be sold versus buying the dips. i think this story has done a complete 180 and there's no growth and the valuation's probably still too steep, the stock down another 8% today. >> i guess the hope there would be there is going to be this model, this hybrid model for a while, if you go down south a lot of people in the office, but in the northeast a lot of people pushing back will there be a market longer term for zoom in it's not going to be what it is but we're not going to delete the app off our phones or computers, it's going to be a hybrid situation where video communications have a role. >> exactly
100% but i think the difference is, as you said, and in fairness to zoom, i think the last quarter was better than many expected. but with smaller customers being a top piece of the revenue pie that's going to lead to a volatile metric. you'll see it go up and down, how will analysts value this, i say the stock is going to hit the lower multiple and once the growth story fades further, you'll see the stock trade off eps and then the at tdebate shi to margins and that's where microsoft comes into play and you could see severe margin erosion ahead for stories like zoom like peloton they've become a victim of their own success. the growth was too explosive, too fast and now they're struggling to live up to the wall street hype, which is almost impossible to do.
>> we've shown microsoft on the screen and you have something fascinating in your note, you have the marathon, you have the three runners in the last part cooking it, and one of them drops off and two go on. you think those two top runners are microsoft and google, because they still have huge growth and they still have good margins and you think apple just -- you know, as amazing as a company it is, might be getting a little bit left behind here, at least in relation to microsoft or google? >> i think so. alphabet is a rare -- not rare stories but i think if you look back five, ten years it has been an underperformer within the large cap growth complex microsoft transformation has been out of this world, what they've done over there. but as you said, i think you check the boxes, microsoft and alphabet they have elevated margins, enormous scale and impressive growth showing no signs of slowing they benefit from secular trends
and that's where those stories come together and celebrate themselves from the larger cap growth nvidia, what they told us last week can potentially be added to that bucket, my concern there is some of the recent activity wreaks of a retail footprint but in terms of the names growing from secular growth scale margins, microsoft and alphabet are unparalleled in that universe. >> what's wrong with the payments companies, everybody talks about the future of finance and people throw around the term fin tech, like they're talking about the weather. yet investors don't seem that interested largely >> i think it's also a function of the market. we haven't seen stocks that haven't performed or they're disappointed and they haven't made money for a long time now there's no appetite to jump back
in, so whether a paypal and a desperation deal going back after pin, and further down the scale, fis, gis, earnings was underw underwhelming, blame it on a choppy recovery, a travel pause or slow return to that as well, and then also throw in the buy now pay later kind of explosion as well, which is kind of disrupting the multiples and creating disruption on that side, it is leading to a group of stocks, they're not value, growth, sort of in no-man's land and investors are shunning them. i would have no interest as well chasing stocks that have underperformed to this degree. unfortunately for us, video games fall into that camp, they're in no man's land in terms of having any kind of factor identity. >> joel kulina, interesting on the payment companies, why microsoft and google may be
time now for your morning rbi. something random but interesting that you may not hear anywhere else today let us talk travel because if the projections are correct it's going to be a bonkers week flying with millions headed to the airport to see friends and family while we hear about the jump in covid cases the reality is most people aren't letting that impact their travel behavior much or at all look at the revealing stats. first, they asked people, quote, at what point in time do you believe you will feel 100% safe to resume traveling via airplane nearly 30% said in one month or less so basically now that is up from just 7% who answered the same way back in june of last year. fewer people said 12 months or more so in other words it's getting more optimistic. keep in mind the question was 100% safe. i've probably flown 50,000 miles in the past 12 months while i do it i can never say i feel 100%
safe this optimism is felt in the numbers. if you have flown recently and it feels like the airports and airplanes are packed, the tsa numbers are getting close to pre-pandemic levels. keep in mind that's still with very few international flights it's almost all domestic the bottom line is this, people are out, out again in a big way and with so many missing thanksgiving last year, this year may be bigger and better than ever. so get jabbed, get tested, and go see grandma but i'll say this. you couldn't pay me to fly this week with concerns about tsa worker issues and crowds, get to the airport about three hours early. i'm not kidding. random, hopefully useful travel woes will be a trending topic in a day or two
but right now we have others including nfts, a pricey real estate, and taylor swift breaking a record. >> macy's is getting into nfts it's going to auction off ten nfts of their balloons they're getting in to celebrate the parade's 95th anniversary. the proceeds go to the make a wish foundation. the manhattan real estate market just recorded its best week in at least 15 years. that's according to a luxury market report from real estate form orb and reality more than $600 million in contracts were signed last week. that was the largest weekly volume since 2006. the biggest deal was a townhouse listed for $29.5 million and here's something taylor
swift will remember for a while. according to billboard, taylor swift's 10 minute and 13 long song has been the biggest hit, it replaces "american pie" which held the title for 50 years but clocks in at 8 minutes and 42 seconds. brian. what are your thoughts on such a long song? >> well, i love "american pie". >> yes, that's a good one. >> a long, long time ago but congrats to taylor swift thank you very much. >> you got it. on deck, lori calvasina is here her projections ahead and reminder if you haven't checked out our poasdct, it's available on all the major platforms we are back right after this
welcome back it is that time of year again not when you're buying turkeys, you're doing that, hopefully you have already but when wall street firms put out their projections and targets next year. so far the ones we have seen have been bullish on stocks. goldman sachs with a 5,100 target piper sandler more optimistic, the target of 5,150. so what does lori of rbc capital markets think? let's find out bring her in. lori, good to have you back on what is your projection for 2022 >> well, thanks for having me on, brian. it's always fun to be here it's forecast season and we've come out with a number that is not quite exactly in line with the others but close with a few of them, 5050 is our number next year we look at a few different models and back tests, our
economic models are saying the upside could be north of 5,100 our valuation models most of which look at stocks versus bonds say 5150 we think it's going to be a good year next year, a little more difficult, challenging than this year we won't necessarily go up in a straight line we are arguing to be balanced in terms of transitions trades but overall we think it's going to be another good year for stocks. >> that's a good target, 5050. what is that 8%, 8.5% return plus throw in dividend yield, you could get to 10%. >> you could targets are rough estimates. it's how we see the world unfolding now, that's why strategists are always making revisions and tweaks one of our tests that looks at stocks versus bonds we look at the yields of the s&p 500
companies, and that's been in the 40 to 50% range, that's been strangely a very good indicator on a 12 month forward basis of how well stocks are going to do in the year ahead, that points to an 8% return. we think it speaks to the appetite of retail investors and while in asset classes are still overvalued stocks are still the best game in town. >> i know the russell 2000 is on a four day losing streak, oh my gosh, right, it's had a nice run. looking at your research it looks like you are more optimistic on the smaller caps than the larger caps is that true if so, why >> it depends on your time frame. but we think the next leg up is the small caps to outform. we call it the last hue a. the deeper under valued
cyclicals will do well next year ahead of 2023 but next year the consensus data is calling for a 4% gdp year, that's when we see small caps out perform, value out perform. and when we're going into fed rate hikes usually caps don't under perform until the rate hikes begin i'll say on the recent price action last week we were talking about how small caps made the sudden breakout, hitting new year-to-date highs i think that's because the investors were cueing off the broader economic mosaic but i have heard over the last four or five days a lot more focus on the covid flare up which caught investors off guard and depressed small caps a little bit in the short term here >> yeah. and i know that, again, not to be a broken record on the positive side here but hospitalizations in the u.s. are down 52% in the last couple
of months, actually. so we focus on cases, maybe focus -- anyway, nobody cares what i think about that. it's data anyway is there any part of the market you dislike, lori, you say stay away from it, it stinks? >> i wouldn't say putrid but one area coming up in conversation the past few days we're in outlook season, rits are an around we're under waeight. it's been an inflation hedge, but it looks overvalued to us. so there are better ways to play inflationary pressure, small caps one of them another underweight we have is communication services it has the internet names, media, telecom in there we haven't had a great read on that space in the survey work we've done with our analyst, he's been a little bit cooler. we see policy risks. we have told investors to stay
balanced between value and growth the next year but we do it in tech, not com. >> rbc's lori calvasina. are you going to get the jokes i can see both sides of that price target. >> that's a good one >> you haven't heard it yet? >> not yet. >> you just did. thanks have a happy thanksgiving. we'll see everybody here tomorrow morning on "worldwide exchange." quk x" picking up our coverage and i'll see you in a couple minutes there as well. here. new aspercreme arthritis. full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme.
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for what we saw really late in the session yesterday. the energy debate, will president biden release oil from the strategic petroleum reserve? new reporting from brian sullivan is straight ahead plus the rising cost of food the ceo, the ceos, in fact, of hormel and jm smucker will join us on cnbc, some of the best known brand, iconic. spanning the globe on this tuesday, november 23rd, "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc i'm becky quick. along with joe kernen and andrew ross sorkin. and this morning the u.s. equity futures are a little mixed as joe mentioned. the nasdaq is under pressure once again, down b