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tv   Closing Bell  CNBC  November 26, 2021 12:00pm-2:01pm EST

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so some of these moves may be exasperated by smaller volumes and it is a holiday weekend and that will do it for "tech check. it is time for a special edition of "closing bell." sarah? mike >> deidre, thank you welcome to a special three-hour edition of "closing bell" program i'm sara eisen at the new york stock exchange. it is red friday for stocks on wall street. stocks getting slammed on fear was a new covid var yiant the session low is down. >> i am mike santoli in for wilfried frost its emergence sending a chill across global markets and airlineses, cruises are getting pummeled while some stay at home plays like zoom and peloton are
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higher and vaccine stocks popping, as well on the macro side, oil is getting slammed and bond yields are tumbling and crypto is seeing a sharp downturn. >> 59 minutes to go. >> we have reporters and great guests coming up david on the impact from the markets and rbc's helena kroft will be here looking at the plunge in oil and energy and oil prices are down 12.5%. dan ives from web bush tells us whether you should be buying the dip in tech. let's get straight to stocks, though walk us through what you are watching and i'm particularly wondering about volumes because it's a holiday-shortened trading day and what are you seeing? it's not typical black friday action >> lightser than what you would otherwise get. however, appreciable volumes and this is not kind of an air pocket where stocks got repriced there's determined selling going
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on what happens is when you do get a shock that catches the market wrong as this one did. i do think the urgences to sell and reduce risk will always be stronger than the conviction to buy into that flow especially ahead of the weekend which is why i think you've seen this pronounced move lower. yes, there are winners and it's 90% of all stocks to the new york stock exchange. where does that take us? right back down to the 4600 area and this is where we started november on november 1st, we traded briefly around the 4600 number down 100 points off the highs and had they been talking about the uncertain, uneven, undecisive action has started to make 4700 look like a little bit perhaps of a near-term ceiling and the high friction area and i do want to point out the 50-day moving average is down a half a percent and all year that's served as a little bit of support initially.
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that's where we are. let's look at large stocks, and it tells us about the risk appetite of the market and the xlg and it's the top 50 largest stocks in the market and you see here on the one-year basis and we got back to neck and neck with the russell 2000 small cap had a burst higher and it had taken hold and people were ditching the growers you see the russell is just basically giving it right back into the long trading which means larger stocks are holding up okay. semis, another leadership group getting weaker today today is a software over system is day and compared to regional bank, similar structure and they almost got to even and regional banks are getting hurt and the yields are coming down and they'd been a strong group also, again, you see a lot of those charts coming back -- i don't think, sarah that we had a way to determine if the market gets that this will be a long term consequential economic impact of
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this and it's trading as if it could be in taking a little off the top. >> you see that gloibally everywhere you look and even bigger declines in places like france safe havens like treasurys can be a bid today, and down 150 before the thanksgiving break it was 164 which is my question, the pain trade has to be really effective. >> intense, right. it was almost as if the market had put itself into a fogz have mix mum vulnerablity to whipsaw. you did spend many days, many of them pandemic winners and positioning for higher yields. the yield story is very pronounced on a one-day basis and it gets us back into the zone where we spent a lot of the last few months in the 150 area. it's dramatic, and i still think you have to wait and see if it's
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done anything to reverse trend >> mike,y is you in a bet. >> let's get meg it meg tirrell, hey, sara. we are waiting for the w.h.o. to release a statement from its technical committee telling us if they'll give us a greek letter name telling us if it's an area of interest or of concern. they're calling it the thanksgiving variant we heard from south african researchers yesterday, but why this is so concerning. it is associated with the strong uptick in cases as well as what they call a unique constellation of mutations and here's olvera one of the researchers leading the work in south africa at the press conference yesterday >> many of the mutations of concern is the transmissibility, and we can see that the variant potential is spreading very fast
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to highlight the number of cases really coming very fast, and we do expect, unfortunately, to have pressure in the health care system in the next few days and weeks. >> so, guys, to put this into context, if you look at the case graph of daily new cases in south africa, this is in the very early beginning stages in the graph. you can see the previous waves were from different variants case cases had really come down from that and a lot of questions whether it can outcompete delta and whether it will evade vaccines and all of those are question marx rks right now we than they're already acting to see in lab studies how well the vaccines can hold on biontech says they can have that in two weeks and they can re-develop new vaccines and
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moderna says within 60 days they can be in the clinic so the vaccine makers can work very quickly on the drug front, there has been news unrelatedly from merck today. so documents coming out from the fda ahead of its advisory committee on the antiviral drug. that was down a bit because the update from merck preventing se severe disease and death was lower than expected with the i want rim look and down 30% in preventing that more severe disease, compared to 46% in the interim. the fda looking like it would clear it and asking its advisers to weigh the appropriate patient populations. guys, back to you. >> virologist was sounding the alarm and we saw the markets open up in asia and what is the level of preparedness and the
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u.s. government? >> we have not restricted travel from south africa. i saw a flight land in atlanta from johannesburg at 9:15 a.m. do we know what the white house is doing we have been warned that a new variant could come to evade the vaccines >> that's the big concern. does this get around the vaccines i ashish jha was just on in the last hour saying it could very well be here already in terms of delaying flights, there are calls for the u.s. to do what the uk is doing in stopping flights from certain african countries. dr. jha said that could delay it here by a week or two. these things are always too late to make a big difference and it punishes the country for
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identifying a variant and flagging it to the world and there are countries trying to limit it including getting as many vaccines to as many people as possible and increasing our vaccination and booster rates at home >> let's hope we've learned plenty from the prior waves. appreciate you meg tirrell. tom, good to have you here obviously, you're made a real franchise of talking about the interplay of covid and the markets and how you think it's best to play it in trying to handicap the latest and how are you dealing with the market reaction and how you think whether you could take this new covid, potential threat as an economic event >> hi, michael happy thanksgiving or happy
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post-thanksgiving. today is obviously a fierce reaction and the markets that will worry about visibility and cause policymakers to panic and e eventually consumers to panic. the vix has risen 45% and the ten-year has come down dramatically so i would be in the camp that today is the actual tradable low. our technical strategy market has called for a 3% to 5% correction that was going to start and then end in early december i would say this is the hallmark there has shtnot been a variant that has truly changed the economy. this is alarming, but investors need to take it in stride, too >> yeah. certainly no doubt about that, but even in the best case
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scenario, we've had a couple of weeks where we're not sure how to assess the science behind the new variant and things like that, but do you think the market is essentially reacting to where it had been already and this is a very direct excuse and a reason to drive this one-day market action, but do you feel that when you see crude oil crack below $70 a barrel and you see a lot of these macro moves that seem as if they're losing their previous trends or ranges? is that something that you feel can feed on its own? >> oh, yeah. >> michael, that's a great point. once the sellout starts no one can determine the depth, fearness and the speed, but today the timing is awful and it's a shorter trading day with few people at their desks if i was a policymaker and i was worried about oil prices and the
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spr was a last one that didn't do much and it's causing oil to be lower, but do i think oil at $60 in 2022 because the economy has screeched to a halt because of this variant? it's possible, but what investors have to keep in mind, south africa vaccination is 24% and even though this new variant is a large share, cases were over 30,000 in the summer. so it's -- look, policymakers are panicking and generally when policymakers panic, that's when investors want to actually step in >> so just to be clear, you're saying buy buy the dip. what would you be buying >> yes i'd be -- i mean, i don't want to sound like i hit the jim cramer button, but yes, we're on track for a fierce december
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rally and art cashen talked about it thismorning the cyclicals and casinos selling off and retailers and these are companies that dramatically cut costs and they have huge demand and investors -- unless they buy bond, and over 50 to buy the ten-year and you're paying to buy investment-grade bond and 2022 estimate. it's still a bargain >>. >> yeah. there was a couple of signs here that the market sort of stopped going down and the down 1,000 on the dow and the dow 100 on the s&p level right here what signals would you be being looking for to suggest that in fact, either the fever is starting to break or in fact we're in for more pain here because i think everybody remembers that friday when covid
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first started to be brought to bear on the stock market back in february 2020. the memory makes people nervous. >> correct michael, that's a great point. i don't know the future. i'm saying things based on our historical look at past cycles and the evidence-based work. one thing that's always a clue to tell you you should be more scared and in other words, it's pricing in near-term volatility and greater than outterm a negative premium essentially today i'm staring at it and it's still a positive slope, so even though we have a spike in the vix, the market is saying this is -- i don't have liquidity day. it's not that i don't think there's big calamity that we're facing for the next few weeks.
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i would say the vix signal is next week and there could be a meteor strike and that would be three strikes. >> let's hope not on that. >> i hope not. >> i just wanted to bring up the fed because that's partof the story here and already after, you know, if the past few weeks and days have been about pricing in a faster taper and a sooner interest rate hike already that's starting to unwind and we're seeing that in the money market fund. now they're taking june and punting it to september. at least where you're seeing the market could expect the first interest rate to come from the fed. if that continues and if this does cause some sort of economic event and consumers to pull back, when that might become a good thing for investors if the fed isn't so quick to pull back on stimulus. >> that's spot-on, sara. the bond market has been fighting the fed over the summer
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really pushing the markets to show lift off way sooner than the fed. the reason for that is inflation was super hot. super nova hot if you have panic like this and commodities are down, to me the bond market is now having to realize that that was a crowded trade to bet on liftoff. you're absolutely right. if anyone thinks the fed will be pushed into being sooner, this is a huge amount of cold water >> tom lee, very valuable to have you on a day like today thank you for joining us >> thanks for having me. >> let's talk more about this variant and what it could mean for the world's fight against covid-19 joining us, former fda commissioner and cnbc contributor dr. scott gottlieb >> good to have you here, dr. gottlieb we don't know very much about this new variant and based on what we do know, how concerned
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should we, investors, the general public be? >> on the one hand it has mutations that's been associated with the escape and the protections offered by prior infection and the epidemiological data so far, although we have little data with the spread of this in south africa does seem to suggest that it may be more transmissible and it has escape mu takes on three of the dominant epitopes that said, it's important to remember this does not mean that the variant will fully escape the vaccines or meaningfully escape the vaccines and it may be a situation with 1351, the beta variant where the vaccines are less effective and they're still effective enough when you have widespread exposure with the vaccines across the population with that variant, 1351, the fresh vaccine is 75% protective.
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that kind of protection, it will be quite sufficient being able to use the vaccines as a tool to control the spread of this given all of the other immunity that we have in the population and the advent of drugs that will be coming in the market someone walking around with six or seven years old has 50% protection against the delta viriant. we still have 75% or 70% protection against this new variant that will still be quite protective finally, the final point is when you have a variant that has this many mutations in it as this one does, there is some suggestion from the literature that it becomes less contagious. we see it in pockets of the community in south africa. on the whole, this may be a less contagious variant and that's what we've seen in certain cases in the past. it's early days to call that this is going to change the nature of the game at least here in the united
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states where we have a lot of immunity the risk is that we get through this delta variant we start to see prevalence levels decline very sharply and this new variant starts to get a foothold for the spring and summer with covid. i don't think that's going to be the case and i think it's way too early to draw the conclusion iffing any, that is the risk and this is something this we have to deal with three, four, five months from now. >> you went on record saying delta would be the last major variant that we would have to contend with do you stand by that >> i still feel that way because we don't know as much about it barring something unexpected with the coronavirus this is that unexpected thing with the coronavirus we don't know how transmissible this is. it's likely to be less
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transmissible because there are mutations and the epidemiological data is is important, and you're probably getting a skewed picture of its prevalence and we don't know how effective the vaccines are going to be and if you had to put down a point estimate looking at the characteristics of this virus relative to what we know it and you wouldn't know a whole lot. you're not going to lose the vaccines here and there is some d diminished variant it's not all bets off and it will increase the pressure to get people boosted and get the vaccinated vaccinated and vaccine kids the more we get robust immunity and the booster has become very important because diminished vaccine efficacy becomes more of a risk if you have a strain that can better penetrate the
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existing vaccines. >> down 127 on the dow when will we know the answers to these questions and how long will it take to know if the vaccines can hold up to this variant? >> in silicos there is data floating around among virologists saying you don't get complete escape from this. we don't have in vivo data in humans to have models and we'll have neutralization studies in two weeks that we'll have studies induced by vaccination i would expect to see some decline in the neutralization given the characteristics of this virus, but i wouldn't expect it see a situation when you get something that falls off the cliff where the existing vaccines aren't clinically effective ao this. i think we'll get potency in a country like the u.s. wave of
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infligz fekz and you see it decline in january and february where you saw prevalence coming down last winter and all of a sudden we got the second spot. that's sort of a first case. the other thing is people who have been infected with delta and sb sequentially been vaccinated, and all of the studies we've done show they have robust protection against the new variant and they're in good shape, as well. what would you say about border controls we've seen the uk, europe, israel, already putting flight bans and suspending flights in places like south africa and other southern african countries. is that a prudent step should the u.s. be doing that?
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>> i think it is a big mistake because they will not disclose this they did the right thing from a global standpoint, and if the result for being early you'll be economically punished? at this point it's probably globally distributed putting restrictions on who can travel and requiring people to be vaccinated to come into the country is prudent sense closing travel down, i think that's a big mistake both in the near and long term it sounds like you are looking at the silver lining here. it's important to hear from you. we have not heard that before that more mutations could make it more contagious and more spreadable ultimately, dr. gottlieb, do you think the end of the pandemic is near you've talked about that as soon as january is that still the case >> people think this is more transmissible because of the rapid growth in case case. you've had an outbreak of this
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variant in particular regions and that creates a low in south africa they've deployed different vks in us and many people who have gotten the mrna vaccines were only partially vaccinated and they are now oversampling of this and you're getting a skewed picture of the growth of this. right now, concluding that it's way earlier to conclude that. >> i still believe delta is the variant, and we've seen it in the southeast, the pacific southwest and it's starting to come down in the southwest in states like colorado you will still see a delta waive in the northeast and the northern regions that are still coming up, but we are closer to the end of the delta wave. prevalence will decline barring something unexpected, the risk of a new variant like this emerging it ruins that picture heading into the spring. by march, we should have been
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out of this and if this is something that's more transmissible and pierces the vaccines it could be prevalent into march i think it's too early and it seems like some people are drawing that conclusion and it's speculative at this point. >> let's hope you're right on that down 875 on the dow. wooe talked about the potential to evade vaccines and how about the tool kit that we have developed here thanks to companies like pfizer and merck with the pills and we have monoclonal antibodies from regeneron and lilly. what is the likelihood that those treatments will protect us against this new variant >> that's the other point, western countries that can deploy those technologies will be well protected. first of all, the if this is something that truly is threatening. the small molecule drugs including the pill by pfizer should work on this and the pill by merck given the studies that we've done on that the antibody by astrazeneca will
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hold up quite well based onned laboratory evidence, but those companies also had second and third-generation antibodies and development and they can re-engineer those drugs pretty quickly, as well and we will not lose against the new variant and it may put a wrench in the trajectory in terms of how we deploy those things and having urgency against people being vaccinated i worry about the rest of the world where you can't have the technologies very quickly including south africa where you have undervaccination that could have opened the door on a new variant like this. >> and just how long it takes to modify a vaccine to address a new variant if this one does evade the vaccine. pfizer mentioned 90 day which is is very short, i know, probably in the scheme of developing vaccines, but is there any way that that can be even shorter and how does that work can it go to clinical trials again or can it be re-released
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like the flu shot. >> yeah. you exposed people to the vaccine and make sure you get sufficient levels of antibodies like previous vaccines, probably i think this lgdz be done with studies that are 90 days, a hundred days of initial coming up with the concept of commercial-scale production and companies are coming up with the construct. so i think we'll be in a position if we need to be to have vaccines widely accessible and in time to deal with any wave from this new variant this does start to threaten the united states. it's probably months before we see a real uptick in the cases of this new variant given the past timelines and even the delta variant. it took a sufficient amount of time and the good work of the
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epidemiologists and it shows the world's getting better at this i think there's sufficient time if we need it to manufacture, develop and manufacture a new vaccine. and again, i don't think we'll ever lose the vaccines. you'll probably have pretty good protection even against this we'll see where it comes out and maybe 70% protected and 75% protection, that's still pretty good protection. again, remember, someone who is walking around someone who was vaccinated six or eight months ago probably has 50% protection against delta right now and so we're seeing levels of delta infection go down around the country and even with that level of protection with the vaccine that's still pretty good in preventing a widespread epidemic of this new variant. boosters aren't going to become more important if it does start to spread. >> get your booster. dr. scott gottlieb, we are lucky
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to have you. thank you very much for the information today. >> thanks a lot. >> i feel better hearing from him on all of those fronts and maybe the market does, too down 144 >> we have firmed up a little bit and tack ake a quick look. a little more than a half hour before we close and the s&p 500 has bobbed back above 4600 >> i think the important takeaway is he's not convinced that this is going to evade the vaccine. he's not convinced that it is necessarily going to have the spike to the protein could mean it is less contagious and he's sticking by the fact that the delta variant is the last real threat in erms of the united st states >> it was the idea that it could essentially outcompete the delta variant, and so if dr. gottlieb
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feels like that's not necessarily odds on. >> he said it's way too early to jump to that conclusion. >> it's very calming to that message from him. >> as we mentioned, the energy sector sinking today with crude prices down double digits. big oil tech names like chevron, exxon, diamondback all down significantly as well. joining us now is helemacroft. clearly the market is bracing for some kind of major impact on demand does that make any sense to you? >> clearly, it was more effective in bringing down prices in the spr this week, but the market has been concerned about covid since the end of october and part of the reason why we've had oil declines since the end of october and it was
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lockdowns in places like off the ray and concerns that you have other governments and follow suit so i do think the market is concerned. they're concerned about government restrictions and what that can mean for moblity and you have a situation now where we are bracing for 65 to 70 million additional barrels hitting the market it's not surprising that we've had the sell-off today it is a thinly traded day and we just have to wait to see what happens next week with the market and we're going into a very, very important opec meeting and right now the saudi oil minister looks a bit like an oracle for warning to say that delta was in the rear-view mirror >> what does that tell you about the leeng of opec at this point? now that we've seen prices pullback from june or july at times does that mean that they will be curtailing supply to the
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degree that they have an agreement to do so >> we thought that opec might hit the pause button on their 400,000 barrel monthly increase because of the spr action. i think now as we head into the opec meeting on thursday it's a question not only will they do a pause because of concerns about this new variant alongside this very large spr release i think it's work noting that while this spr while it underwhelms the market it's still the biggest they've done in history and we will be hitting the market just as we have concerns about potential new covid lockdown restriction again, too soon to say whether governments will pull the trigger on such measure, but the market will be concerned >> helima, it is down 12% and when kind of economic situation is that pricing in
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i think it's pricing in the fact that we have this very large amount of new oil set to hit the mark from consuming countries and we do have these restrictions in austria now. there were concerns about spreading these types of measures to countries like germany. any time you get news about a new variant we go to a place of fear about lockdown restriction. too soon to say whether othe countries will follow suit, but oil had already been pricing in this covid concern it's been pricing that in since the end of october helima, great to have you here today. w we are off session lows and a very broad sell-off on wall street energy, as we're showing the stocks up to 12% decline in oil and the worst-performing sector in the market and every sector
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is lower right now financials right at the bottom of the pack and industrials and some of the cyclical groups that had been working really, really well on this idea that inflation is strong and the federal reserve is going speed up interest rate increases and the economy is booming that's what's getting sold the hardest today. real estate and consumer technology rid down with it expect the vaccine stocks, and moderna is at the top of the list and the stock is up 22% today. pfizer up 6% and we are getting some word, mike, that these companies are testing its vaccine to see if it works against the new variant. it's something dr. gottlieb says and the neutrality tests will come out in the next two weeks or so. his bet is that he thinks the vaccines will hold up. down 70% even as the market suggests that it's an ongoing market for
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vaccines, for treatments and it will refresh itself for better or worse, and that's where the market seems to be playing right now. crypto assets also falling hard today. let' let's get to kate rooney >> bitcoin getting hit as investors look to shed the higher risk, liquid positions and look to safe haven assets like treasurys with new fears around this covid variant. bitcoin dropping as low as $53,000. earlier this morning it is off by 20% from its all-time high, p since january, though, it's still up 80%, 87% it looks like. ether, solana and bitcoin in the red. there are more algorithms trading crypto that makes these quick reactions large. there's leverage in crypto markets and that can pour fuel on these moves and a $2.8 million options expiration and that may also be adding to the volatility today back to you guys
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>> as far as safe havens go. the dollar is not one today. it is weakening along with bitcoin and gold is higher and the japanese yen is higher bonds and treasurys are the biggie with under a lot of pressure apple down about 2%, 2.5%. web bush's dan ives joins us now. this is a familiar playbook, dan, where some of the big-cap tech names actually outperform the market on the idea that they'll be resilient if we do have economic weakness as a result of a new covid-19 wave. what do you do with those stocks today? >> we continue to be buying tech our playbook the last 18 months any time we get whether it's 10-year spike fears and any sort of covid variant and second wave you buy the winners in tech. we have the tech cycle going 2022 we have a nasdaq, 19,000 target and names like apple, microsoft across cloud cybersecurity and these are the times to earn
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these names and your other guest talked about, in our view it's a semi-remote environment that's here to stay and it's another reminder in our opinion to buy these tech stocks. >> what if we go back to a period where tech gets hit because anything that's considered highly valued if the fed does a faster taper if this variant does not prove to be as worthy of economic concern if it holds up against vaccines for instance if you're in that environment, then tech is not so popular. when you look at names even like a microsoft and we try to use the safety blanket name in this environment and there are higher risk names like docusign other andsand it's a industrial revolution playing out right now. we'll have 3 to 4 trillion of tech spend over the coming years and what's happening now is it's accelerated in this environment.
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you can have cybersecurity, cloud and apple and we've done the black friday checks that shows that apple will sell 10 million iphones over black friday weekend and that would be a record and it speaks to our view of tech going into next year >> dan, you mentioned the apple check. people trying to handicap what holiday is going to look like for apple given the fact that they have longer lead times and it will not deliver as many products do you think the market has been fixated on that? i keep asking, is it in the stock? you can talk about apple's stock and say it's held its value very well and it's got spablity, but from september 1, 2020, to now it's only up half as much as the market is. >> chip shortage clearly hit apple and they were conservative in terms of their forecast for the holiday quarter, but i think this will ultimately be a clear beat in term was where we're
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heading. they could be upwards of 85 million units for the year supply shortages have been alleviated a bit and the demand that we're seeing. this looks to be selling 40 million iphones between black friday and christmas time. if that happens this is a stock that's going to 3 trillion in the next three to six months. >> i just want to pick up on the chip shortage, dan because we know there are travel restrictions here and we're going to see different countries react differently to the covid variant and we were on the brink of lockdowns in europe because of the delta variant what does that mean to the variant that was so strained and causing pressure for some of these companies. >> right now, that's the biggest risk over tech which is definitely alleviating and going into the first half of '22, but that becomes a bigger fear, if this really impacts the supply chain and elongates that in 2022
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for auto and tech, but right now, i believe the bark is worse than the bite in term was what we're seeing with not just names in apple and on the auto side with tesla and gm and we're starting to see that moderate and this is a risk off date. i think they look back on today as their golden buying opportunity to own the winners in tech. >> all right, dan, thanks very much apple at the moment down 2.7%. appreciate it. dan ives let's get over to don chu to see how long the market downturns on variant headlines have lasted in the past i'm sad to have a history here, but what does it tell us >> it is over time, no doubt there is a dramatic sell-off today and some of the most impacted are the ones that we've come to know so well over the pandemic scares. some like dan ives aren't in panic mode during this low liquidity session and the
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effects of new variants has appeared to have less of a market impact over time. if you look at the most recent concerns over the delta covid variant earlier this summer, the deepest that the s&p 500 has pulled back has been roughly 3% to 4% in less than a week and that was back in may and then july just as those concerns were building about when infect rates might peak something to also keep in mind, the s&p 500 did pull back by a much bigger, if you want to look at it that way, 5% to 6% in early september to october, but the bigger part of that story had to do with rising interest rates taking a toll on growth and tech stock valuations. so which is the bigger threat to markets. is it covid variants or higher interest rates and that will be a trend, guys that will be closely watched by traders and that's the reason why the sell-off has some traders saying hey, it's the time to add positions, guys. back over to you
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bright spots in the sell-offs. i want to point out a few of those winners and some of the stay at home stocks, bucking the trend and zoom video, peloton up six. teledoc, docusign and these are the places to go, right? when you think about staying home longer and prolonged return to the office and prolonging plans. this is where we were and we've been here before and so many of the stocks are so far off of their highs and this is a blip. >> not only that they're all still down for the week and netflix up slightly it shows you that to me, let's ease up on the pressure here and pick some up as a lottery ticket that we should go back to some kind of restrictions as opposed to some lasting title shift in terms of what stocks might work from here on out >> we do another group bucking the downtrend today is biotech
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most of the vaccine makers moving higher with moderna, the best performer actually on the day, best contributor to the s&p 500. it is up 22% and that stock also way off its highs from earlier this year. let's bring in michael yee from oppenheimer to talk about this new setup. you can sort of stop here. the market quickly rushing to the biotech makers and some of the lab testing companies and things like that to essentially build in expectation that this will be another phase of the pandemic that there's going to be another pivot in terms of resources in the industry and demand for these products and does that make sense right now >> mike, how's it going? the market has been trading on headlines predominantly and we get one today that's obviously beneficial for the lab companies and the testing companies. so i think the action today is
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very reflective of what we've seen so many times during this year when investors are reacting mainly to the headlines that are coming across and a lot of the more detail-oriented work as far as it impacts selective stocks and sub sectors is being done subsequently the reactions today are logical. we'll see what happens we still don't have that much information on a relative basis and there aren't that many cases globally and it's reason for concern so the vaccines are up and the testing and some of the diagnostic names, as well. >> michael, as you filter in information into the companies that you analyze, does it make sense to actually change your assumptions about what areas they'll look to? has the area always been operating on the assumption that this is an ongoing situation where the variants will present new challenges >> it's great to be here
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i would say point number one, the biggest debate on stocks like moderna has been whether or not there will be demand for boosters this year and next year and the following years and these are when people will be reminded and i do think cases will go up and i do think the motivation for boosters will turn up for the short term so, look, it's a big focus on the vaccine stocks like you said, they've been beaten down hard and i do expect some of the vaccine stocks and adageio is probably bouncier and sustained that for the next couple of months >> jared, what about the merck results today showing efficacy against the variant and covid-19 and a lot less for the results which was 50% and what does it do for the stocks and the expectations built in? >> for the market it's assumed
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in a look with the pfizer data with merck that the pfizer antiviral pill was superior or is superior to merck, i think we're seeing a little bit of the followthrough from that based on the data today with merck showing suboptimal results versus what it gave us a month ago. it is reflective of investors continuing to gravitate more towards pfizer, the vaccine news, i think would be a marginal negative for merck as boosters come into play a little bit more, but i think this is more of what we knew it's just a little bit dampened for merck relative to what we had seen about a month ago michael, in terms of your stocks, are there any that you feel are being overlooked in terms of potential for either whether it's this variant or just in general in this environment when it seems like
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people essentially rush in and out of a handful of these names based on headlines >> it's a great question you know, biotech has been a crazy sector this year the tech stock have had a crazy year particularly as everyone rotated on the post-covid recovery it's kind of interesting, and you look at gilead and biotech, and as people get defensive, they'll be back with the biotech names that have been hammered. >> good day to have you both michael yee, jared holtz here's what's coming up in the next hour. we'll speak with investor bradley tusk, about travel stocks we'll ask bill simon whether the latest variant headlines will keep shoppers away from brick
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and mortar stores. retail is getting hit hard today. we'll talk about what this means for the fed's taper and interest rate hike time line and we will take a closer look at casinos and chinese internets under serious will selling pressure today on all of this news, but first, we've got just about 12 minutes to go here in the trading day and we are now in the closing bell market zone today we have lafler tangler and robert nobles here as well and we'll kick it off with the broader market stocks have recovered a bit here into the close and still significant pressure amid new covid variant fears coming from south africa the dow is the worst performer of the major averages. it is on track for its worst day of the year. worst day since october of last year, nancy. are you doing any selling today? are you spooked by these headlines? no, sara, we're not and happy thanksgiving post-thanksgiving, by the way we have a hedge in place, as you know we've talked about that in the past before and we know that
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seasonally this week is usually pretty choppy. today it seems the computers and the algos are in charge and there's very little liquidity in the market and how does it look early next week and we would not be sellers in this environment we would be buyers because we do think the overall macro story is still intact we have a slew of economic numbers this month, and we do think that corporate capex will be a shining light next year and the consumer will return next week and the consumer numbers up about 8.7% below recent trends and still robust and those are the things we're paying attention to in our portfolios >> robert, we now have the s&p 500 with this little bounce off the lows today still down less than 3% from a record high. so i guess you can look at that
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as just another dip that we've seen along the way or potentially a sign that the market is not sticking to what's supposed to be this seasonal script of stronger prices throughout the end of the year has it driven you to reassess or change reassessor ch or change your posture here in terms of what stock you like or how you want to be exposed to the market >> great to be back. no, in simple terms, no. we would be looking at a shopping list of names the market, as you mentioned, was down 3 whether it goes down 5 or a little more would not impact our decisions at this time we had a variety of good news this week, some for the consumer with spending numbers higher and also for income. you are starting to see an inventory rebuild and you are starting to see better cap goods numbers. so even on the wealth front, home prices were higher, home sales were better and the like so while we have had an issue with inflation, we still have the federal reserve andchairma jay powell is still at the helm.
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that will allow us to address the situation. we are comfortable with the market where it stands now, and we would think the seasonal pattern would hold for the rest of '21 >> all right you can only imagine, sara, if, in fact, president biden said that he was nominating lael brainard today the talk would be the market always tests a new fed chair, we don't have that at least to be one of the narratives that pops up. i did want to look at energy though pretty dra matby it is the worst performing sector on wall street. cnbc's pippa stevens looking at the biggest losers today >> reporter: hey, mike energy sector falling more than 4%, leading the broader market lower. this follows oil's plunge on concerns the new variant will hit demand wti breaking below that key $70 level, falling more than 12% for its day going back to april
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2020 both u.s. oil and brent crude on track for a fifth straight week of declines. the oil and gas exploration and production fund, ticker sop, down another 7%, while the oil services fund, ticker oih, declining at 6%. on a stock specific level, marathon oil, apa and occidental are the biggest losers giants also falling with every component trading in the red guys, back to you. >> pippa, thank you very much. nancy, energy in general at this point, we've really gone through a lot of kind of mood changes when it comes to people's backing of this sector, but it actually was on another one of its decent runs going into today >> yeah. i mean you've got to be exposed to energy i think for at least the next six months. demand will return and supply is much more limited than it was just a year ago. we're overweight the s&p, but
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that's easy because the s&p weighting is not very large. so i think investors should wait and let this settle, because, as we have seen today, oil prices are extraordinarily volatile and we've got the big opec meeting coming up. we want the see what is said there. then i think as the dust settles, you might -- if you don't own enough you might want to step in and pick away we've been net sellers a few months ago and now we will be back in buying if, in fact, we like what we hear from opec and we begin to see the price recover. >> what types of names, nancy? i'm just looking at some of the carnage here occidental down 7.25%. hess down 7% as pippa said, every name is red today. >> we own faang and we would add to that. we also own some of the green energy names which is a totally different game, but it is ultimately all related we have been buying those names and hedging them with oil
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because we need oil for a long time to make green energy work so i think you want to be in the upstream exposure. if you are worried about diversification, you buy one of the large integrated like chevrons i wouldn't be a buyer of exxonmobil but it is a personal preference where you are collecting the market dividend that is growing every quarter whether you deserve to or not. >> the president is getting something he wants, which is weaker oil prices, just important the wrong reason travel and reopening stocks slammed today. airlines are selling off united wiping away all of the gains for the year in the session. cruise stock hit hard on the covid fears. they're all down today double digits look at some of the declines, 11%, 13% other reopening names like casinos and hotels are getting slammed as well. robert, within the carnage are you a buyer of any of these names? that's sort of what we're looking for here as we've heard from a number of people on the program they think today is an
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overreaction >> yes i would clearly agree today is an overreaction. you look at where we are currently, shopping and travel is coming back in a big way. people want to make up for the lost time, especially the last one-and-a-half years we expect the strength to continue so we would continue to look at the names, you know, certain areas like airlines. maybe not in the cruise sector right away, but transportation would also be names we are looking at, too. so i will tell you, this would be a good time to have a list of names to go to i don't have any specific names to provide for you today, but i do think long term this is a great area and a great time to get into these areas at this time >> all right well, consumer stocks holding up a little better than the broader market on this black friday. courtney reagan has the details on that group, which i guess is more domestically focused, if nothing else >> yes, sure we can look at the big picture and zero in a little more. xrt, that retail etf, is actually underperforming the broader market in this unusual
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move on a black friday for this index. black friday has never been up or down more than 1%, at least in the last five black friday trading sessions today's move marks the worst day since september 30th as well the xrt is still up about 3% month to date, but it is kind of atypical it has been overwhelmingly positive, up more than 8% on average in november over the last five years. mall-based retailers and those that cater to more high-end shoppers who tend to be more sensitive to stock market sell-offs are among the day's worst performers nordstrom's shares have recovered a lot but down 2%. we were down 7% at one point, and some of the higher end names like pbh down sharply. after the best day ever last week, macy's down again further here today gap shares hitting a new 52-week low, down about 28% in a week. i mentioned pvh. that one has a larger international business, so to your point, mike, it is not domestically focused which is probably why it is one of the
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harder hit names in the retail sector >> yeah. obviously, sort of the lack of patience or forbearance among investors in some of the companies that have fallen a bit short. court, thank you >> thanks. >> unless you are tractor supply which is up 1% the only one working today and up, what, more than 60% this year >> one of the best long-term charts you will ever see they sort of define this market and, yeah, it is kind of a baby home depot type of a model, and it is certainly working. >> they did well during the pandemic because they were essential. >> very well they were considered essential, and people like working on lawns as well as their homes and things like that and pets pet food is a big business there. nancy, i wonder if we are talking about the consumer stuff here, i'm looking at walmart, costco and target. they're outperforming today. people are kind of clinging to some of the stalwarts in this market does that make sense or would you look for some of the damaged goods out there in the rest of the sector
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>> mike, i'm not sure i'm smart enough to know which day we will have a reopening trade and which day we will have a work-from-home lockdown trade. so we tried to own the names that benefit in either scenario. chipotle, which i understand is a restaurant but a consumer discretionary stock, that really honed their digital transformation but we also really like, we still like the home depots and lowe's of the world. costco, target and walmart, who have said on their calls we would have the inventory it is just that our margins may get a little squeezed. the same with amazon we are not going to raise our prices because we are in line with what our costs are going up because we want to preserve our customer base. i think that's a brilliant long-term strategy it is just that wall street investors are always more short-term focused and impatient. we have been adding to some of those names and holding on to the ones where we have full position >> we have less than two minutes to go here in the trading day. we saw a mini recovery off the lows earlier this hour
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mike, it looks like we are heading south again. every sector lower dow, down 824. not at the worst point of the session but still will be the worst day of the year. >> absolutely the worst day of the year also, i believe will be the worst market breath for the market change of the year. we're no longer at 90% of the volume at the downside it seems, but pretty close you know, it seems late october of last year was last time we did it it is a comprehensive sell-off n nasdaq breadth has been slightly better but not a bit here is the 30-year bond year. had been above 2% briefly not that long ago. at a very interesting level as you can see. it has been the floor since late summer, around that 1.80, 1.85 mark we'll see if there's more buying to drive it low. the volatility index, we are talking about how we got the spike up to 27 it is about as high as we were back in the september sell-off
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we need to see that come back down to see if the fever has broken i have been talking about how it trended higher in recent days when the market was pretty static it already had air under it. as we go into the "closing bell" for an early close, s&p sepp looks like it is tracking to close below 4600 the dow down almost 900 points small caps, a big underperforming, down 3.6% down 903 points at the close, a jarring day welcome to the special edition of "closing bell." i'm sara eisen along with mike santoli. we have two more hours of "closing bell" coming your way to help you navigate this market sell-off coming up this hour, jeffries' chief market strategies david zervos on whether this is a buying opportunity for investors and what it could mean for the federal reserve timeline on policy let's also bring in sylvia
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jablonski. as always, mike, we turn to you. we woke up to jarring in terms of the market selling, how broad and deep it was, and also the news from abroad the south african variant which is causing a lot of concern because it has unusually high mutations walk us through what happened today. >> we went into the thanksgiving holiday positioned for exactly the opposite, right? i mean the market was selling a lot of the pandemic winners, a lot of the kind of tech stocks that had done well back when people were in lockdown. migrating back to the cyclical stocks, the energy and financials, trying to anticipate a tighter fed. all of those things were basically given always bit of a gut check based on the news out of this new covid variant. all of that makes sense in the way that the market had this reflex response. i would say it could mean that there's been a bit of an overshoot in the very short term because people were so wrong footed when they were coming into today so essentially we are leaning
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toward all of the things that were the worst positioned for the news that we got >> it was set that it looked like a bottom today. >> yes >> a lot of people follow him. he said it was a total wipe out and he would be looking to buy. >> it is the kind of action that sometimes reflect that but probably better said in retrospect let's get to meg tirrell we want to have meg give us the breaking news on the new covid variant and what we know at this point. meg. >> mike, we just heard from the world health organization. they're now classifying the new variant as a variant of concern and they've given it a name, omacron. i hope i am pronouncing it right. it is not the name we expected the next greek alphabet letter was new. we seem tohave skipped over that and we have gone on to omacron. they are saying that countries are being asked to enhance their surveillance and sequencing efforts to better understand variants, to submit their information to the world health
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organization and to global databases on genome sequences. essentially looking through this to understand more about this variant right now, but saying that it does appear to potentially have the potential for reinfection. so that suggests the ability to evade immunity to some degree. they're also noting how quickly it has spread and suggested that it does have the potential to be more transmissible so looking through here to better understand this variant, but the world health organization coming down and classifying it very quickly as a variant of concern all of this, guys, after south africa early on raised the flag about this noting the more than 30 mutations on the spike protein that make it so concerning we are waiting for more details on it. guys, back to you. >> omacron, a/k/a the thanksgiving variant is what it has become i wondered if you heard our
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interview with dr. gottlieb and what he said and how he offered what i thought was reassurance around vaccine effectiveness, what the spike protein could mean and how bad it could get. what is your impression of that? >> i heard it. it is important to hear that this isn't necessarily the dooms day scenario we've been worried it is and that the market is suggesting that it is. the jury really is still out i think dr. gottlieb's point, particularly about the fact that even if this does evade our immune protections to some degree from the vaccines or from prior infection, it is not a binary situation necessarily there. he was pointing to the beta variant, b.1.1.51 where it had a hit to the vaccine ability to target that variant, but that the protection was only diminished to about 75%. he was pointed out that's on freshly vaccinated people, and we do see a waning in the antibodies over time
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so he's emphasizing the importance of people getting vaccinated broadly and also of getting boosted, and that's what you're hearing from a lot of public health officials, too, that this is the way to protect all around the world more people need to be vaccinated and, where possible, boosted in order to protect against variants like this >> meg, thank you very much for bringing us the latest sylvia, how are you thinking about the way the market reacted today? clearly it is not the same as when we first heard about covid and the world was blindsided we are conditioned to filter it in with what we know, and we are talking about a market down 3% after a 25% year-to-date run did it knock lose opportunities for you or do you think the market might be in for a tougher spot hire? >> good to see you today i think we are all learning the greek alphabet for a bad reason. you know, what we've learned is that in this new range of strains we have seen that the
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economy hasn't suffered so much as what we saw in 2019 and '20, and that's because we have antivirals, we have vaccines, we have understanding about proper behaviors and ways to mitigate risks. in my mind i think it is an overreaction i think it is coupled with some of the increases we have heard from europe and close downs last week so in my mind it is a great buy opportunity, particularly the names in, you know, the cruise, hotel and airline sector they're about 10% off today, and then on top of that 10% to 20% off of their 52-week highs that industry lost about $5 trillion of income in the last couple of years, so i think if you are patient it is a long-term trade. absolutely big tech, 5g, crypto, all of these things are on sale today. >> crypto, too, you're a buyer of >> i'm a big buyer of crypto, particularly at 54,000 you know, we tested that 30-day moving average of about 58, and i think the next -- or 56. i think the next level is the
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200 day around 48, so we will see which direction we go. but my sense is that part of this is linked to the idea that perhaps inflation will now cool off because of the market pullback today, you know, because of the ten-year pullback today. but i think a lot of investors are going to go back in and sort of push the price up it is a super volatile asset class, but i just don't think it is going away, particularly when we talk about the metaverse and the need for, you know, ethereum, ether, bitcoin to sort of transact in that world. i really think that ether and bitcoin are screaming buys now >> nancy, just looking at the most immediate kind of front line stocks in travel, things like the airlines and the cruise lines, really just being liquidated today, it really looks like it. if you look at the airline index it is really not up that much from the day before we first got the pfizer vaccine results in november of 2020 i just wonder what that tells you about either whether, you
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know, there are still bargains in some sense on a long-term basis or the market realizes that they don't have necessarily that clear a path to becoming all that profitable, even if things get somewhat back to normal >> it is a difficult one to be sure, mike we played the airlines trade early in the covid reopening, and we're out no we just think there's better places to be the stocks on a good -- in a good environment they're volatile and cyclical and there's no dividend to pay you to wait. so, you know, we've turned our focus to some of the more -- some of the infrastructure names and those related to electric vehicles as our kind of transportation plays and then in terms of our exposure in the portfolios, like sylvia, we are exposed pretty heavily to technology and we continue to think that trade works in the next year or so last month software capex real after-inflation was up 13% we got the industrial production
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numbers and the capex numbers looked good in there, too. i think that's where we would rather be focused and play the consumer on a discretionary basis. the travel fits and starts are just a little too much from a volatility standpoint, and a lack of income standpoint for us at this point. >> i feel like we should point out the ten-year treasury yield. everyone hates bonds, right? well, they were rushing to buy those today. treasuries in so much demand yields go all the way down below 150, pretty much at the session lows as we got to the close here on the stock market. 149 on your ten-year this was in the 160s before the thanksgiving break it was the opposite of what everyone thought, robert if you look at the stock market response, the three best performing groups today that held off in the sell-off, health care, consumer staples, utilities. they're safe, like treasuries. they do well when yields are low. this is scrambling everyone thought what was going to happen on fears of high inflation and interest rate hikes. so what do you make of the bond
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move >> i would tell you, i think the bond yields got a little too high in the last week or so and the move backwards is a little bit too low. we would anticipate rising bond yields from now until next year, but we're not a big believer yields are going to get out of control, you know, over 2% we think the rise in bond yields would be just a reflection of the growing income more than inflation. inflation is likely to cool, as the fed staff mentioned, toward their number of 2% we think we are just in a range bound. so it went up pretty quick in the last two weeks, it has given back all of the gains in the last day or so, and we would tend to think that bonds, which have not performed this year, will actually do a little better next year and outperforming cash but still not the competition up for stocks at this time. >> i mean we were as low on the ten-year as 143 about three weeks ago, two-and-a-half weeks ago. so it has been this, you know, very much an indecisive bond market, but one that's been kind
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of chopping around this range for a while. sylvia, you were among those who feels as if, you know, as the majority seems to, that there should be an upward path of bond yields what does that mean for the growth sectors that you tend to focus on >> so, you know, i do expect an upward path. i expected the ten-year to be closer to 2 by the end of the year i don't think wewill quite get there, but i would expect to see the ten-year rise. so, you know, historically there's this sort of fear and it creates volatility with growth stocks if we think the ten-year is going to rise too quickly in my mind at the levels we're are at, and even if we hit the 2% level, i think there's almost no impact to balance sheets because i think that the big tech names, the big stock names, these companies have just ample amounts of cash and liquidity on the balance sheet. i think that capex is going to improve. i think that trillions of dollars are going to be spent in the spaces that these growth
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names make up. so for me it is sort of a nonissue at least for the next couple of years, and it continues to make tech appealing, particularly on days like today and maybe even cyber monday, you know, as we get that combination of the risk-off trade, the ten-year falling. this might be really good entry points for tech. >> what kind of tech i'm asking, sylvia, because the stars were zoom, docusign, peloton, netflix, the stay-at-home tech. if you really do believe that we're going to face some sort of economic disruption or changes here because of this new variant, those are the ones that are on sale given the price action over the last few months. >> yes, fair point that's a great point to sort of define specifically what is meant by that. so i think apple is a great buy. i think they're going to have year-over-year revenue growth and product sales regardless of some of the supply chain issues. i think microsoft and google are players that will mask again in the metaverse, just in, quantum
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computing in the evolution of the web, cybersecurity, web 3.0 infrastructure, so those are the types of names i think are on sale today even the semiconductors are super interesting to me just because, you know, back to nancy's point about ev, they're going to power ev, they're going to power augmented reality, artificial intelligence. all of these don't happen without the 5g stock that's the sort of tech/semiconductor trade that interests me for today >> sylvia, thank you very much appreciate your time today, sylvia jablonski, nancy tengler and robert nobles. good to have you with us uber and lyft both sinking in the session joining us now is bradley tusk, tusk ventures founder and an early investor in uber bradley, good to speak with you. >> yeah. >> you know, it is always so tough if we are trying to decipher what the market might
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be saying about those industries, let's say ride hailing, whether it is a -- are people going to go out and be with others and need the ride hailing services, are they going to stay home and get food delivered, or it is a labor availability question too in terms of them getting drivers. how do you think these companies are situated right now at the k cross currents of all of that? >> it is a great question because they're facing multiple competing challenges at the same time the first, obviously, is if the south african variant is as bad as people fear clearly that could lead to reduced demand for rideshare going forward, at least for the foreseeable future, if that's the case i think we really don't know yet so it is too early to say. the second is regulatory yesterday in brussels uber was shut down and barred from operating. updates on some regulates that to me seem outdated and unreasonable, but nonetheless both companies face significant regulatory challenges here in the u.s. and for uber all over the world. those will continue to put a lot
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of strain on the business model. the third is the model itself, which is even without a pandemic, even without massive regulatory challenges, it is unclear that ride-sharing as a stand-alone business is a profitable business. both companies have struggled mightily to make money they're constantly in wars with each other for customers and for drivers. i think we have to start thinking about is there a better business model for ride-sharing than the one we have right now >> well, it is a bit of a -- worth going back to, the time of uber and lyft ipos when people tried to project out what the business model would ultimately be, many people said, well, it is kind of a break even or a push or modestly profitable in the best case scenario until we get to autonomous driving. are we still in that position of basically hoping that this massive kind of sea change technologically will be the thing that rescues the business model? >> yeah, if anything so the original vision for uber was to be the amazon of transportation
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so anything going from point a to point b, whether it was a giant load of cargo or a human being or anything else was in some way moved by uber now that's limited to just food delivery and ride-sharing specifically lyft in the s1 when they went public said we may never be, i know they were trying to disclose everything they possibly could, but it might have been a pressure statement, which is the fare that you get from driving someone from point a to point b is only so high when you have to split the fare between the ride-sharing companies and the driver, oftentimes there's just not enough to go around. as a result, it has become a deal for drivers that is recently difficult to keep taking and it has become a deal for both companies where, yeah, they may never really show profitability. >> i was curious, bradley, about your take on the stocks that were the poster child for covid, for better or worse. on a day like today, they
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worked peloton and zoom are still considered highly valued though they are off their highs are they cheap or should you have exposure for days like this when you wonder what is coming next on the covid front or stay away >> no, look, i don't think they're cheap. i think both stocks were wildly over valued during the pandemic. we have a tendency as investors, probably as human beings, to look at whatever situation we're in and assume that's how it is always going to be yes, there is a variant in south africa that looks scary and, yes, that may impact travel companies eventually, but shoul they be taking the beating they're taking today no, i don't think so yes, we were in a quarantine, does it mean that no one can go to a gym again or to a meeting again? no, of course not. if you look at the travel stats for thanksgiving leading into the holiday, people were moving around and about quite a bit, almost back to pre-pandemic numbers. so human behavior, people still like to be with other people,
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still like to go out and do things it is good to have hedges like zoom and peloton, but to assume we are heading back into quarantine to me is unreasonable >> yeah. clearly one day's action is definitely not enough to sway the argument we are going back in that direction. though the broader weakness recently in things like cloud computing, the relatively young companies, the rush of ipos in this categories, fintech is another one that ran up into the start of the year and then had a tough go for ten months now or so, do you think that that's impacting how private investors are viewing these areas or slowing or redirecting that kind of venture money, not knowing whether, in fact, the public markets will want it >> it should, but it is not. so i am an early-stage investor, typically seeing series a tech companies, and valuations just keep going up and up and up, even when they eventually go public and have to end up at a
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devaluation. whether it is spacs starting at ten and falling to six or seven or companies getting really big valuationness the private markets, going public and not able to sustain them at the moment there's too much money in the venture sector, leading to valuations that are too high an unsustainable. that's why we have the problem. >> does that mean you are not doing much of anything >> no, no, of course not we're investing. look, for me, and one of the reasons i like being an early-stage investor is even if it doesn't go up by as much as my analysts might think it will, if we invest in a company at a valuation of $40 million and it gets up to $4 billion, whether ultimately we sell after the lock-up period, whether it is at $3 billion, $2 billion, we did pretty well. the model still works. if i were a growth equity investor right now i would be really nervous >> yeah, you are buying from the
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early guys, and a tougher spot to be in, bradley. thank you very much. >> thank you happy thanksgiving >> all right you as well. supply chain concerns meantime are a major worry for consumers and retailers, and now the new covid variant could be a factor in the holiday shopping season frank holland has the details. hey, frank. >> reporter: hey happy holidays to you. you know, early holiday shopping is up 10% year over year, boosted by a return of in-store shopping you can see behind me -- not at this moment, but there are a lot of people in the aisles looking for gifts. as people were lining up outside of best buy, some are reading about the covid variant and say it could change their shopping plans. >> i would like to shop in stores, but if it gets too crazy, i will do it online >> i have heard about it and i do have concerns about it. i would prefer shopping online it is a lot easier you know, you don't have to come into the stores with people, wearing masks, not wearing masks, vaccinated, not vaccinated >> there always will be variants
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like i said, we've had our booster shots so we're going to follow the cdc guidelines and have a little faith. >> reporter: well, even after this news we have seen a steady stream of people coming into the store, shopping here we have seen more and more people wearing masks according to salesforce, the holiday prices are up 22%. a lot of people said they wanted to come to the store today because they feel like there's better deals at the store. back over to you >> frank holland, thank you very much for that report for more on the new challenges facing retailers and consumers let's bring in bill simon, former walmart u.s. ceo oh, and simone siegel joining us, retail analyst we are trying to work on your audio. we will get to you in a second bill, how high do you think the bar is here in terms of bad news related to covid and a new variant, to slow down the trend we have seen in consumer, which is very strong >> i think in the short term, in the short run here, particularly black friday weekend and
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everything else going on, i don't think you will see much reaction i think as your reporter just kind of told everybody, people were out shopping today looking for the deals and, you know, the stores were very crowded prices were very good and aggressive, particularly in the big stores, big box chains, costco, target, walmart and, of course, online at amazon i think in the short run, no in the long run we will have to look and see what happens with the new variant. >> well, the stocks didn't work today, siemian obviously concerns about travel now, we are starting to see restrictions go up, about luxury in particular. how nervous would you be did you field calls about the variant today or about black friday >> -- and no one in the mall felt like the variant was mere so i know the news will go ahead of the reality, but people are out. so i think we're going to see winners and losers rather than
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clusters i think that's going to be the story. i think there are certain brands with pricing power, there are certain ones that didn't all will deal with the extra now days they face whether it is the variant or the supply chain. >> simeon, based on some of the really dramatic moves we have seen in response to certain results so far in the last couple of weeks in retail, what does it tell you about investors kind of postured toward this group, their expectations for whether, in fact, there's an opportunity to kind of make it up in the next few months here i'm looking at gap, looking at nordstrom, looking at best buy to a degree. it seems as if there's a lack of patience on the part of investors. >> it is a great point i was looking at it this morning. we have never seen the volatility on stock-driven moves on the day of the report the amount of companies that move up or down 20% is the most we have seen in years. volatility matters a lot i think what is happening now is gap and nordstrom were the last
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to report, so the problem is now we're all distorted into thinking we compound it with our red friday today and we think, oh, man, it must have been a really bad retail earning season the reality is it wasn't there were companies like capri, victor's secret and under armour and companies that were up 20% i think what we're going to start doing is breaking apart the clusters i think with covid hit it was retail is dead, then retail is alive, then retail is dead there will be company-specific stories. i think that, unfortunately, yesterday or last week the end of the earning cycle soured everyone's view, but it doesn't mean there's not opportunities, especially on days like today. i think what you are going to want to do as the holiday season gets behind us, you are going to want to look at which of the brands -- everyone's prices are up there's no inventory we have heard about the scarcity factor, but the question is who has pricing power versus who simply saw fewer promotions. anyone who saw fewer promotions, they're going to come back always a shopper you can be comfortable it is going to happen
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the brands that improved their business, stores that made it through covid are probably healthier than they were before. that's the dynamic we want to focus on, start splitting apart winners and losers, is retile alive or dead. >> how do you think about retail losers, bill >> i agree with simeon i think you are seeing scale and size make an impact now. you will see the big guys able to get product when product is scarce in smaller stores i think you will see, particularly what we saw during the peak of covid last year, people trying to make one trip, so if they have to go out at all the big boxes will do particularly well. as simeon said, you know, there will be winners. the people who weathered covid are stronger than they were when they went in, and they're facing less competition because many of the smaller ones didn't weather covid. so i think look towards, you know, the big retailers, both
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online and in physical retail, and i think you will see some opportunities. >> bill, as we look into next year and the talk, of course, until today largely had been about inflation, pricing power, retailers being able really to pass along kocost increases and having a consumer that maybe has an expectation of paying full price, i wonder as you look at walmart and its peers they've been multi-decade forces for disinflation in this economy and amazingly effective and they've made it work for their own kind of bottom line has anything changed longer term about that in terms of their orientation in general to try to squeeze prices another low as problem? >> no, i really don't think so you know, walmart's earnings last week were a really good example of it. their sales were up, spiked i think higher than -- certainly higher than i thought they would, but they gave away margin to be able to do it. that's when walmart is at their
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very, very best in an inflationary period because they have the scale and the size and the business strategy to hold their pricing down longer than anybody else and to keep downward pressure on prices when the rest of the world isgoing crazy with upward pressure and then because walmart does that, all of their competitors, you know, in order to compete have to match them in price. so i do think that that factor, those big stores, walmart, target, amazon, costco, will keep a downward pressure and maybe keep this inflation from getting too crazy. >> can i throw in something on that because i think there's an interesting point. i think there's going to be a difference between discretionary and staples. i think that staples, those who can survive will be those who win. on the discretionary side, we are finding a lot of companies did more with less, their profit dollars went up even though sales went down. i think that goes back to -- sara, we have had that conversation this goes back to the idea that
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perhaps the problem with retail over the past decades has been over promoting, not over stored. those willing to sell less and charge more are making money i think you will have those selling a lot of things, those who master deflation will win on that front on the flip side you may have other business that's are actually okay being smaller and being healthier. i think that's where inflation as a bad word actually means lower discounts and pricing power on the good side >> name some names i know you have liked peloton -- excuse me. not that you have not liked peloton. you have liked under armour on this thesis. who else do you think is selling more - >> like the bike, you know i like the product listen, on their earnings call, the ceo of capri, owns michael kors, jimmy chao, i think we saw
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it with others, focusing on the brand as opposed to focusing on the voice. sara, not to jump on them but you brought it up, peloton is the reverse. are you hearing everyone talk about more discounts than we have seen. i think that will be the interesting idea, you focus on who is trying to move units versus who is raising the price, raise the brandel vaccination, et cetera. that will be the interesting story into next year >> consumer discretionary down 2.6% today thank you both for joining us. the dow closed lower by more than 900 points, the day performance since back in october of last year s&p's worst day since january brings us to a level on the s&p 500, though just early november, so mike is back with a look at equity positioning among active managers and corporate insiders. what do you see? >> sara, we've been talking about how the action recently and positioning of investors left the market open to a little bit of a jolt like we saw today. this is illustrated here in this
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weekly poll. national association of independent -- of active investment managers, they're very tactical. they try to play shorter-term trends you see their exposure to equities remained above 100% it does show you the market was wound pretty tight equity exposures are high. lots of rotation below the surface but not a lot of people raising a ton of cash, so not a lot of buffers in the market on the other side, at least a faint trend going on here with corporate insiders, and they're buying and selling activity of their own employer's shares. sometimes also seen as more of a leading indicator because they are kind of the smart money when it comes to know what to do with their own stocks if we have that chart, it shows a pickup on a relative basis of insider buying activity over the last few weeks i think a lot is in some of the really blasted out growth stocks that had gotten way low. so they try to make it look
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like, you know, they're doing something, either they see bargains or they want to act like they're a bargain this bottom line is insider buying of course, insiders sell more than they buy. you saw the spike in insider selling up there about a month ago. i don't think it is necessarily going to let you time the market very closely, but it tells you some folks were finding bargains because even as the index stayed static and inching toward highs around the 4700 level on the s&p, below the surface the average stock had pretty deep correction >> you wonder what it will do this time next week. time for a cnbc news update with contessa brewer . hi, contessa >> hi there, sara. here is what is happening at this hour. there is now a fifth major variant of the coronavirus, and it is called omicron the world health organization says preliminary data on the new covid variant, first identified in south africa, indicates it carries a higher risk of reinfection. evidence also suggests the variant may be able to spread
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more easily than current dominant strains the european union nations have agreed temporarily to ban all travel from southern african nations. it is an effort to stop the spread of omicron. norway is also quarantining all travelers from that region earlier on "closing bell", former fda commissioner dr. scott gottlieb was critical of those moves >> i think it is a big mistake in the long run because it is going to discourage nations from disclosing these things early. i mean south africa was early to disclose this, dealing with very preliminary data right now they did the right thing from a global standpoint. if the result for being early and disclosing this information is you get economically punished countries are going to become more reluctant >> south african leaders are criticizing the ban. but the health minister says it is justified and run counter to standards set out by the w.h.o what you need to know about the latest threat tonight at
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7:00 p.m. eastern. sara, back to you. >> contessa, thank you contessa brewer up next, jeffries chief market strattist david zervos on today's sell-off and how investors can protect their portfolios from more uncertainty. the ceo of a movie company on whether the new covid fears could hurt box office sales which are starting to rebound. also casinos shares crushed today. we will dig into that group's llffern "closing bell." we will be right back.
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the major equity averages closing out the day sharply in the red. so how might these new covid fears impact the federal reserve's policy timeline? steve liesman is here with that angle. steve. >> sara, yeah. rather than a whole sale retreat from the new consensus of a faster fed, fed fund futures markets have only modestly eased off the position, only coming part of the way back from the recent pricing for a quick irtaper and faster rate hikes. the probability of the first hike in may, a new develop
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the probability of a second hike in december, that's been around for a while. now down to 50%. pretty solid 60%, again, before the holiday. two major considerations here. first, fed chair powell said that the fed's analysis that each wave carries less economic impact as the economy learns to handle the new waves second, it is an arguable position fed policy does little to address the biggest effects of the each knew wave which are on the supply rather than demand side krishna guha, evercore, writing, our initial knee-jerk reaction is to think that the new variant does not make much difference to prospects for accelerated tapering, which we view as a base case. it is most likely if a major question remains about the new variant going into the december meeting, a decision to taper faster will not be taken but it won't mean an end to tapering plans, and you would have to
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come back and think about whether the meeting after that, the first of the new year, might have that decision of a faster taper. >> it is just so hard to tell how serious this variant is going to be in terms of our economic activity, steve in the meantime, so next week we will get a lot of fed speak and then the week after is a black-out period, right, for a fed meeting the following week i'm wondering how much we will learn between now and the next fed meeting, which might put on hold that conversation of a faster taper >> i think it is a pretty good bet, sara. i think you have that right, that while the markets are learning independently from epidemiologists and from w.h.o. about the new variant, we're not going to really necessarily have all of the information from the federal reserve. i think a good way to think about it, and i think your coverage of the central bank sort of underscores this also, the fed is going to want flexibility here one of the things to think about is a faster taper does provide that flexibility to hike sooner rather than later if, indeed, it
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deems it needs to do so. >> steve, thanks very much appreciate it. for more on all of this let's bring in david zervos, chief market strategist at jeffries. david, i guess clearly everybody is in wait-and-see mode. we don't know enough to make really broad conclusions here in terms of what the economic risks might or might not be. kind of easy to say, well, let's wait and see the market doesn't wait and see a lot of times it needs to reprice based on what we know what did today's action tell you along that front >> you know, i think it is difficult to read today's price action it was a very unliquid day it was not liquid in europe both in the bond and stock markets. let's watch monday monday will be a critical day. we come off of these sorts of down 4%, 5% in european equities, down 2% on the russell and s&p.
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monday will be an important day. i am a little worried, to be honest, that people have gotten themselves positioned very aggressively for a view that is extremely rosie at valuations that, you know, were pretty darn good going into the end of the year we were up 26%, 27% for the year in the s&p now we have pulled back up 23%, 23.5%. it has come a long way and a lot of people are pressing and it could be messy i'm kind of okay with a little bit of messy >> okay with messy, just so that it cleans out some of the aggressive positioning or because you think that, you know, people have to downgrade their assessment of what the economy can give us next year? >> i think there's two parts to it the first part is that i think people have gotten a little ahead of themselves on the whole inflation story and the whole consumer story not a ton, but it is going to be more difficult you see it in the sentiment data no one wants to talk about sentiment data but it is going to dent sentiment again, and the
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sentiment stands at very low levels i worry about what these sorts of random hits across the bow vis-a-vis the virus do to longer term sentiment, that's one the second is i think people got aggressive in their positioning, and it is nice to see things clean out. you sort of saw this in the bond markets with everything that, you know, was happening with inflation, and you just couldn't get the ten-year note yield up people just got themselves into a bit of a tail spin here with the fixed income markets in particular i think that's probably still got to work itself out i don't know that it plays that badly for equity because it is more of a bull market story for fi fixed income, at least better for the long end i like a position cleaning i think it is a good, healthy thing for this market. >> so when you get calls by jefferies' clients about what to do today, what do are you telling them in terms of equity or bond exposure at the moment >> sarah, we felt like you had a really good run for the first
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three-quarters and it was time to kind of watch and take a break. it was a breakneck pace coming into the fourth quarter, and we were looking for some of some stability for a little while and just some room to watch how this inflation debate, in particular now the fed debate, would line up, and how the fed makeup would happen with jay and lael and others still in the mix for the vice chairs now. but i think you do have a new fed. we're not going to talk about fed too much today it is not the exciting thing on everybody's agenda, but we have a very different fed that's coming up. we have a very difficult inflation story to swallow for a lot of people, and we have this constant shot across the bow of new things coming vis-a-vis the virus. so there's just a lot of things that can get us into a little bit of a messy position, especially if people take themselves to a levered place that they might not really want to be, into an illiquid time of year such as year-end. like i said, i don't see
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anything huge, excuse me, but i could definitely see a reason why we get a kind of messy couple of weeks going into the fed meeting. i don't have a problem with that >> yeah, it is interesting, david, and this always is the case, but the way we talk about the fed and how the fed is going to change and what the fed is going to say always vastly exceeds what the fed itself is kind of saying or has the opportunity to tell us, right? so we've all kind of gone all of these different directions of how many hikes there are going to be, you know, whether they're going to tolerate more inflation, in between when we heard from jay powell in the last press conference and what we will hear next time they may not necessarily have to change their tune particularly much compared to what they've been saying to incorporate everything that's gone on in the midst of it. >> absolutely. look, the markets have been pushing them the whole time, and they've been pushing back on the markets. now you get this kind of virus story. it sort of plays right back into where they've been coming from more, or at least the core of the committee has been coming
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from so i think it adds to caution. it adds to, you know, being a little bit risk averse with getting too aggressive even at a time when the inflation data does look really, really spicy, especially the last couple of prints or the last print in particular after we had some -- had some very weak numbers for q3. at least normal numbers for q3 so that -- i'm sorry go ahead >> no,ist i was just going to s david, expectation slumped in the market those break-evens took a fall. i wonder if it is the cure for inflation in a way >> definitely, but the other thing is the dollar was quite weak i didn't hear you talk about the dollar, but usually when you get a big risk-off move you get a dollar strengthening, right. everybody runs for the safety of the dollar and that really didn't happen today. didn't get a lot of press, didn't get a lot of play i didn't see you guys talking too much about the currency markets today, but it is more -- >> oh, we mentioned it >> i heard you, sara >> we mentioned it, because the
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dollar has been moving on interest rates, right. so if there's less probability that the federal reserve hikes a few times next year, then the dollar is going to sell off. >> on a relative basis, it is against the euro, it is against sterling, it is against other currencies which you would presume they're going to have as much trouble raising interest rates. on a relative rate story the bund yield should be going down. i know the u.s. outperformed today, but, again, i think it gives you pause on the risk-off side, partly for the people who think it is not a heavy risk-off trade. the dollar going down is sort of a positive in that because people are delevering and -- the dollar >> that's true things get really, really scary, you go to the dollar, right? >> big dollar uptrade, that's usually like i need to really, you know, get out of dodge >> hide in the bunker. david, thank you david zervos of jeffries up next in a world's latest
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revenue report, coming in at a pandemic high, but will the new concerns weigh on the box office we will discuss after the break. casino stocks falling sharply today. a run down of the movers straight ahead "closing bell" will be right back
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♪ welcome back let's get a quick check on how the financials closed out the day amid the broad market sell-off they all underperformed pretty badly actually the bank's index down more than the market jpmorgan chase down 3% wells fargo down 5%. now down also i believe in the regional banks on a month-to-date basis after having a pretty good run as bond yields were compressed today. streaming stocks were a bright spot in the market today amid new covid fears. julia boorstin has the details on that group. hey, julia >> that's right. the streamers are rain stocks in the green. netflix shares up more than 1 and roku shares up more than 1.5%, streaming music player spotify, that stock gaining half a percent as well. now, also we want to take a look at two social stocks, pintrest and snap they both took a leg lower after their earnings reports, but today those stocks are both in the green. pintrest, up over 1%
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meanwhile, those concerns about a new covid variant sending stocks that benefit from the reopening plummeting live nation shares down 9%, though the concert giant is still up over 40% year-to-date, and those theater stocks giving up some of the recent gains. we have amc entertainment down over 3%. >> guys, back to you >> we will pick right up there for more on the covid impact on movie theaters let's bring in mookie >> what is your reaction to the
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news we woke up today about the new variant from south africa. >> hold on. measures need to be taken, but everyone says that it will take at least a few days until we will have a clear picture of what is the new variant.
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you know, you mentioned the stock prices it is natural they will react this way on the other hand in our industry we have another set of numbers, and this is the numbers of people visiting the cinema. currently we are on the thanksgiving weekend, the cinemas are working very well, very good openings for the new movies that are coming we need to be patient and we need to see. we have experienced a lot of bumps in the way and we are in a good place now i hope it will stay this way >> that's just what i was going to ask you, is how thanksgiving looked and how the numbers look into thanksgiving weekend. >> yes, so the thanksgiving weekend looks good from disney, the new animation is open very well. i guess will be north to 40 million.
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the "the house of gucci" is a pleasant surprise, opening beyond what it is expected to do there are some movies from the weekends before, like "ghostbusters" still holding well we can be happy with the numbers we saw until now we are only into the early phase of the weekend we still have friday, saturday and sunday but wednesday, thursday were good i think this is going to be the trend for the rest of the weekend. then we will see >> next year how do you think the release schedule looks given so many of the studios are trying to also give access to their own streaming platforms? it seems as if nobody is quite sure exactly what the theatrical release line-up is going to look like >> so currently i must say that in the last two months i think the schedule of the release of the movies for 2022 have stabilized in a big way. i think we have a very clear and a very strong line-up for 2022
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starts all the way from movies like -- first of all there will be an overflow from christmas of spiderman and metrics. then it ends well maybe with the most anticipated movie, which will come during the middle. we have "top gun," and the line-up is very, very strong the issue that was bothering the industry so much last year i think also is in a way behind us i am talking subject to no dramatic surprises fromcovid, of course. it is clear now that most of the movies will go with the window around 45 days, and 45 days is enough for us. it is not what we used to have, but this is enough for us. so a strong line-up with the average of 45-day window i think is very good news for our
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industry any unexpected surprises from covid, of course, will not be good news for us, but i hope that within the few days, as i said, the picture will be clearer. >> yeah. wouldn't be good news for any of us, of course. mo mookie griedinger, thank you >> thank you stocks deep in the red today. all of those details are next. be sure to stay tuned for a third hour of "closing bell" with news on the new variant and the impact on your money we will be right back. ith me? i can find strength in a rest day. what's strong with me? there are some nights i sleep so well... i'm ready for anything. find out what's strong with you with daily readiness on fitbit.
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third hour of "closing bell"
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let's look at how we finished up a brutal session remember, the market closed at 1:00 p.m. eastern time, a holiday-shortened trading day today. it was ugly across the board the da saw the worst day since october of last year closing down more than 8900 points the nasdaq was hit by 2.25% as well small caps seeing sharp kleins, down 3.7%. all of the major averages down on the week. this brings us back to levels on the overall market we haven't seen, say, since the end of october. the ear mergence of the new
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covid-19, heavily mutated, spreading fast in south africa, a big cause. >> let's focus on two parts of the market hit during the downturn deirdre bosa has a look at china's internet stock de, kick of us >> the chinese internet names dropping over 4% today, the fears about a new variant, but ongoing worries about beijing's reg hear to crack down we have been talking about it all year caught in the cross currents today, down nearly 16% on the session, bringing year-to-date losses to more than 60%. the chinese ride-sharing company in focus after a report chinese regulators asked it to delist here in the u.s. a few outperformers in the group, as mike mentioned, baidu was up more than 1%. other commerce names like allie baba and jd.com holding up
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better than the broad market, but all of these names have been massive under performers throughout the year. back to you, sara. >> thank you to contessa for a check on the casino stocks that were dragged into the elling. contessa >> think were, yes casinos with exposure in macau getting slammed. i'm looking at las vegas sands here ending the day down 5 and a third. you have even mgm, which is more reliant on its domestic business down 2 1/3 ceasars improved to end up 3% on the day. this variant concern that it could keep people out of the casinos pushing the prices down across the board >> contessa, thank you if are you joining us, it is 2:00 p.m. on wall street welcome to a special third hour on "closing bell." i'm sara eisen here with mike
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