tv Squawk on the Street CNBC December 3, 2020 9:00am-11:00am EST
s&p 500 open marginally down, floating around for just a little bit bitcoin before we go, that's still a high flyer, over 19,000. make sure you join us tomorrow "squawk on the street" begins right now. good thursday morning. welcome to "squawk on the street" i'm carl quintanilla with jim cramer and david faber. futures trying to claw thr way into the green after the 28th record close of the year jobless claims come down a touch, covid deaths do set a new record, and we got news on snowflake, crowd strike, chevron, kroger and more our road map begins with markets and new highs. goldman says that a fiscal relief deal is now more likely >> and there are going to be some job cuts at 3m. the pandemic facing a global restructuring for that dow component. and finally, just reading through the note from goldman sac sachs, the upgrade of tesla, the
price target of 780. we'll go over that carl >> all right guys, let's start with stimulus, obviously. topic number one for the markets as we go into year end, jim. you got schumer and pelosi using the bipartisan compromise as a framework. hoyer says maybe a vote next week mcconnell says they're acting in good faith what can go wrong? >> look, i think that they got to do it because one of the things that they don't even talk about is you can evict people. and i think a lot of mom and pop renters, the landlords, absolutely will exercise that. and i think that we got to figure out what happens to those people, remember, it has been -- you're talking about perhaps as many as 8 million people that could be evicted and i think that we -- 3.6 million evicted last year. and i think it could be worse this year, unemployment. so there is a lot that could go wrong here and it is really important that they agree to some deal.
i heard the arguments before, i don't want to argue, okay? i just think everybody knows that right now we need some deal and i think, david, that if you don't have some deal, then what happens is you get to the promised land of a vaccine, later than we do in the uk and there is just this kind of an abyss, it is like the jordan river is deep and wide, david, but the vaccine is on the other side. >> the cdc had some sobering things to say yesterday and seems to be more willing to say them now in terms of what december, january, february being the worst months for health, you know, i this quote should quote directly, but you know what i'm saying we're there, 2800 deaths yesterday or perhaps even more depends on which of the various covid metrics you follow or the ones that do the case counts there it is left's say 27 --
177 -- >> there were people that just said, hey, listen, it is just cases, not deaths. this thing is fine no, it's deaths. i don't know if you got the times pushed now, the times push sounds like it is a civil war, the kind of numbers you got during -- the battle of shiloh >> to your point, jim, so there is a need for the money, there say need for the money now, it is -- schumer and pelosi dropped their ask by half. if they were going to go there, why not have done it months ago. >> i don't know. i don't know the answer to that. >> and could we have been a lot further along and actually having had something do you have any sense in terms of where the current president trump stands on this i saw some headlines that indicate he would not sign off on the 908 billion >> pennsylvania, wisconsin, arizona, these loom large in the president's mind >> not because of covid.
>> no, vote totals. >> yeah, i know. that's unfortunate. >> yeah. a lot of other people looking at it as the deaths and case loads in those states, but i think that the president's uniquely focused on the voting tallies. am i joking? >> you're not joking you're absolutely serious. 46 minutes on it last night. and, carl, what comes back to this question is to whether we really can hope to get any sort of stimulus or relief package out of congress, during the lame duck here. or whether we're going to have to wait until after joe biden's inauguration on the 20th of january. >> yeah. rbc this morning with a sobering note they do see herd immunity, which is about 45% of the population vaccinated around june so that's rbc's view but they add, guys, along the way, our model predicts an addicti additional 270,000 individuals will die the coming months will be tough.
>> we have to get pfizer we have to get j&j they have to happen. the clock is sticking, carl. the clock is ticking it is circling >> yeah. meanwhile, guys, the ongoing story of corporate restructuring and layoffs continues today. 3m files an 8k, looking at 2900 job cuts around the world. that's in addition to -- exxon, conoco, wells, nike, boeing, ford, raytheon, goldman. it is typical of year end, but it is adding up. >> i don't mean to be a dollar sign represented by a man, but every one of those stocks is worth buying because of the tough actions they're taking the top line is not that bad all those companies, i have been recommending ford, goldman, i'm trying to get my arms around 3m, it has been dealt a bad hand, and a lot of different places, but i think they're coming back. and i don't want to -- it is very tough you have to distinguish stocks
from people. and it is painful to look at the deaths and then look at the layoffs and then look at the profits. >> without a doubt and as carl said, 2900 positions globally for 3m, and the numbers there, you know what they wanted to tell us, total pretax charge, 250 to 300 million and various other charges, with the hopes that annual pretax savings between 200 and 250 million from the actions. the actions themselves sounds like things that businesses just do really they're going to eliminate redundancies and better use analytics to drive efish efficiencies, okay, why wouldn't you do that all the time accelerating global marketing programs and activating digital engagements with customers again, that sounds like normal course business, doesn't it, if you're actually trying >> yeah, if you look at -- i have snowflake on tonight.
an i know you can argue that there are companies in two days make what these guys make in a quarter and they have a lower valuation. you bring snowflake in, that's what you can do. every one of those restructurings makes sense, you don't need as many people when you have the snowflake dashboard. they're just -- it is a remarkable company, just very hard to value. but, yeah, i think that they're doing exactly what they have to do with 3m and doing a terrific job, but, again, you have companies like snowflake that make it so that perhaps you don't need as many people and you can do a lot better. what's that word carl, these are -- we have some amazing companies that are reporting. and they're doing things that make it so you can -- i don't want to say get away with firing people, but you don't need to hire as many people as you currently have and it is going to cause a ripple throughout the economy. >> yeah. aaron levy had a great tweet talking about how the cloud, jim, which we talk about so
much, changed the way software was built, now it is actually changing the way people work >> totally that's a great point what i like about slootman, ceo of snowflake, not a sass model it is a model, you use it, you pay. it is just like a real business. he actually has numbers that cannot be fudged, a lot of the other companies we see can and, yes, aaron, who i just -- aaron levy, who is one of the few philosophers of tech, is correct. the next revolution that is occurring makes it so that there is whole swaths of -- in your central office are now at home, who are just unneeded. and can't do the job that snowflake can do brilliant company, again, how do you value it you know some of these companies, like tesla, how do you value it >> i don't know. when it comes to tesla, i don't know, let's do a dcf valuation, assuming 15 million units in
2040 and therefore after that we have tesla entering perpetuity growth of 2.5% that's goldman sachs' estimate of how you analyze and try and assess the value of tesla, and that's how they get to that 780 price target from 455. >> you feel his pain >> yeah. he downgraded the stock in june. by the way, you can't -- you can't blame anybody for downgrading when it comes to tesla, i don't think but it has been up 192% since the downgrade versus the s&p, up 22%, which has been pretty darn good that's since the middle of june when goldman made the mistake of downgrading tesla, only to upgrade it today, on better long-term sales outlook and margin expansion, jim, their ev adoption case scenario keeps going up they call for 26% global ev adoption, by 2030. 40% in 2035.
>> i know. it is painful, because then you had to stretch it to the ev, more adoption, the battery, the margins getting better >> and also autonomous, full autonomous >> listen, he did say that i got it wrong that was -- it was a mea culpa piece. but at the same time, i think that what the people who read it make it -- they make judgments about his credibility going forward, because, david, there were finances, including by goldman, and maybe this is -- they needed the -- to bring back -- david, the chinese wall, remember the chinese wall? where the analyst listened to the corporate finance and that's what he needed he needed to listen to corporate finance and had to slip him the note saying, listen, going higher no, the chinese world defeated this >> your point being if you talk to the buys on the corporate finance side, you would have had a more bullish outlook. >> yes, they price the deals in five minutes >> and everybody would line up to buy. >> the analyst was so pure.
>> yeah. what a shame ev >> bigger picture is this is -- again, goldman on nio, i think the other day, also, was that -- was that goldman >> yeah. >> increase adoption in the chinese market let's just take a step back and think about, there is nio, about ev, and what that is going to mean if these numbers are correct. 35, 40% within let's call it the next 15 years, 14 years. what is that going to mean for so many different industries obviously the auto industry, but beyond that, guys who get the stuff out of the ground that goes eventually into the tank. >> yeah. david, i mean, you're raising the questions that a lot of us are trying to figure out at what point do we become too bullish, at what point do we decide that the future is now? i mean, i've been doing so much work on hydrogen, elon musk is right. it is just completely untenable as a fuel. what happens if president-elect biden decides, you know what,
we're going to make a manhattan project, hydrogen car. what happens if he does it then suddenly the pull through is incorrect >> and also subsidizes it in some significant way because it would be good for fighting cl i climate change and a lot of different things >> nikola, if he subsidizes nikola >> even gm wouldn't do that. >> no. mary grbarra has a pretty good v let's get the fellow who did the tesla. what would he put a priss ce onm with an ev he ought to get ahead of that. >> you're all over it. there are so many implications from these continued rising maybe perhaps too optimistic, but this generally upped version of what people believe will be the case in 10 or 15 years in terms of percentage of cars on the road that are going to be
electric vehicles. >> you can listen to them or you can listen to chevron today, jim. i was jobi chevron takes capex down to 14 to 16 billion, prior to 19 to 22 and that's for the next five years. >> i know i thought that was -- mike worth is, he's -- he can walk the walk and talk the talk. now, exxon, the other day, made some motions to preserve the dividend and that was absolutely sacrosanct for them. these are just great numbers, period i've been saying that chevron and pioneer are the two that saw this coming, and have been the best and mike worth, even though he just bought noble, he's a realist. david, there are some people in the oil world that don't just say, you know what, if you pump it, they will come they have -- they look at their balance sheets, sheffield at pioneer, and they don't overstretch. and a lot of the other oil
companies just feld liel like is to go back to 60, doesn't it >> i just continue to wonder about access to capital and/or in this case, not the ability to have access to capital, but to have -- to new investor dollars come into the names. i look at this black rock survey, that they just did, remember, of course, earlier this year, black rock put out sort of new metrics in terms of how it would evaluate companies overall, largest asset manager on the planet, 25 trillion in assets, they planted double their esg assets in five years climate related risks are the top sustainability portfolio concern for 88% of respondents to this, again, global client sustainable investing survey done by black rock 20% said, you know, that this -- the pandemic would accelerate their sustainable investing allocations. it is a tectonic shift is what black rock says, jim, and so i just -- i don't know when you're in this business, i just not
quite sure how you get it done. >> you're right. and i think that when you look at what doug peterson is doing over at s&p, in terms of his esg funds, chevron is not in those and that's the best there is the best there is. >> we'll keep talking to him about sustainability every time he comes on, we'll be happy to talk to him about it. >> you're so mean. >> no. >> no doubt. we have a bunch of retail stories to get to today, dollar general and costco and kroger. senate will have two votes at 11:30. one of them is confirmation of christopher waller, to the board of governors of the federal reserve as that senate majority goes down to 52/48 looks like shelton is out of luck we'll talk more about that this morning. don't go away.
[what's this?] oh, are we kicking karly out? we live with at&t. it was a lapse in judgment. at&t, we called this house meeting because you advertise gig-speed internet, but we can't sign up for that here. yeah, but i'm just like warming up to those speeds. you've lived here two years. the personal attacks aren't helping, karly.
don't you have like a hot pilates class to get to or something? [ muffled scream ] stop living with at&t. xfinity can deliver gig to the most homes. stewart, come on out here. >> all right >> welcome >> thank you >> great to see you. i wish i could give you a hug, but we're staying six feet apart. >> ten feet, easy. that's good. you can't see how much shorter i am. >> congratulations, stewart. we're so excited >> that is benioff and butterfield making the
announcement yesterday, jim, as we're having to do sort of these demonstrations and presentations in a covid world. >> i just think people didn't bother to read what stewart butterfield was saying go over some figures, slack connect, last four quarters of growth and connection, 140%. 160% 200% 240% i mean, that's viral and i've got to tell you, when i read that, i think that did anyone even bother to notice how strong slack has come on, except for maybe satya nadella. david, you cannot look at slack in a static way. it is doing incredibly well. it can do three times that, i believe, with salesforce, this was not some acquisition of some failing company. the company was taking very big business this quarter, and i don't know a soul who bothered to look at how it was doing. >> what are you reading there? >> notes >> okay.
>> what? >> i can -- >> you're allowed. i do it all the time. >> it is noted >> i got you just checking. you do that to me every day. we won't talk about all the acquisitions sale for s salesfos done and they put up big numbers, but we won't talk about that right now. >> we'll take a break here a lot more to get to including a mad dash on this thursday. don't go away. ♪ ♪ ♪ ♪
♪ i made a business out of my passion. i mean, who doesn't love obsessing over network security? all our techs are pros. they know exactly which parking lots have the strongest signal. i just don't have the bandwidth for more business. seriously, i don't have the bandwidth. glitchy video calls with regional offices? yeah, that's my thing. with at&t business, you do the things you love. our people and network will help do the things you don't. let's take care of business. at&t. time for a mad dash as we count down to opening bell for this thursday. 7 1/2 minutes until we get started with trading dollar general is a feature. >> we're starting to get a
little tougher on the retailers. costco last night reported plus 15 wasn't good enough these guys, david, dollar general, they reported same store sales increases of 12.2. that was terrific. by the way, kroger did too not enough to please this crowd. >> 12.2% is not enough >> not enough. so now we're finally at that level, where people are saying, no i'm through with paying up for double digit gains and i find it remarkable i think this was -- maybe they can talk their way out of it, people are saying, up 36%, how much more can they expand and i think this stock will come back, but we are at that level, david, where when you read what these -- i read costco plus 15, i said, my god, i was -- i was looking for 14 they only beat it by 1 i got guys beating it by 5, by 7! why do i need by 1? costco goes down same here. david, what do they want
you can't please anyone anymore. >> does this mean you question the valuation of the stock at this point >> the new yorker valuation or the val -- >> no, referring to the devastating piece about the dollar stores, i think earlier in the pandemic. very hard read. >> i'm saying that i think that people have said, listen, if they're up really big, it has to blow the numbers away like target did target has been the hero of this period, by the way, brian cornell, unsung to some degree, he frankly comes out four times a year, and otherwise when you see him, he doesn't want it on the record and just shows you some stores and says, look, this is what -- look where our store is, and just walk around the store and tell me what you think. which i love from a guy from queens white stone. my wife, you know. >> know it well. >> barbra streisand is from brooklyn did you read the piece by jim stewart? she could solve the world's problems. >> i did know she was from brooklyn
watch the airlines this morning. delta ceo out with a note saying the daily cash burn is expected to be about 12 to 14 million for the quarter. that's up from their previous call of 10 million, jim. and it echoes what jetblue said on monday, because some of the booking trends are kind of volatile now, given the rise in case load. >> there is jetblue with 36 million shares they offered at 1440 they don't know, the younger investors don't know what dilution means you're already up. delta said they needed a vaccine badly. no kidding i'll put it right to david, why is the fda slower than the uk? given the fact that the uk health system is usually pretty good >> i don't know. >> you don't know? >> no, i don't >> rhetorical, actually.
>> it was? i am curious the answer. >> i don't know. i think it is a travesty they don't call -- >> we'll be a week behind them let's step back for one moment and appreciate what has been accomplished here and how staggering it is >> no, it is >> only april we were all still talking about typically vaccines take how many years, five, if you're lucky and here we are. it is incredible. >> they called me otter from delta house, animal house, whatever it was. and remember it was dean. >> yes knowledge is good. and thankfully pfizer and moderna had a lot of knowledge. >> i got to tell you, you're absolutely right, i don't want to put a gun to the fda's head, but i think we all would like to get jabbed as soon as possible apparently they have the doses i think this is one of those classic underpromise,
overdeliver, 40 million doses, in the uk, i thought only 40 million doses altogether >> yeah. i was tweeting some of the uk tabloids this morning, one of the headlines is jabba, jabba doo. they start looking for inoculations sometimes in the coming days. there is the open. we mentioned the airlines, delta is saying they're offering at home testing kids to all of their u.s. employees >> delta has a flight going to italy, they test you before and test you after and you don't need to quarantine they have been the most forward of airlines, ed bastion doing a terrific job did you see they're going to buy 75 planes from boeing? bam bam. >> not bam bam. >> pebbles >> that's the flintstones, yeah. >> jabba, jabba doo. >> i have a hard time keeping up
with you as everybody else does too i did not see the ryanair news that's a big order. >> 75 planes and they're doing -- it is the boeing 737. >> now i remember. >> 737, david. >> i'm aware >> notice what i didn't call it? >> the max >> 737. >> just the 737. >> yeah. >> i'm dropping the max. >> it is back. nearing a deal. >> the irish papers, they -- >> nearing a -- >> i'm reading the irish papers. >> you do every day. >> you have to my wife is irish >> got to stay up on the irish papers got to find out who is transferring their intellectual property at ireland, get a huge tax break. is that still going on >> i was in intel, i went to one at intel there, they had like five people in it, got a huge tax break. >> yeah. >> the israeli intel plant i visited on saturday, nobody. >> nobody there at all. >> it is a -- there you go
>> there you go. >> jim, to your point about -- to your point about boeing, jim, 229, if it can take out 234, you'll surpass that june high and get you become to levels we saw in march. >> we'll do that at about 7 minutes. i think one thing that is great about boeing is that there is actual demand, again, think it will come from china i know that president-elect biden is not being -- do you see this the president trump is doing now with china, slash andburn? >> yes >> peter navarro doing his job i was always in favor of what navarro was doing in terms of being tough on china, it is kind of late. i'm counting on china putting some boeing orders. >> on that larger policy issue, though, we made this point, and president-elect biden seems to have agreed, it is not going to be any real change in the near term in terms of the tariff regime >> don't you want to get
something in return? we'll get rid of the tariffs if you buy 100 boeing 737s. >> buy a lot off agricultural products >> tyson was upgraded today. how much more can you give these guys unlimited amount because jefferson, you know jefferson. >> yeah. >> farms >> yeah. >> jefferson, the guy who crushed me, in the vikings last week >> people explained to me who bam bam is i know i just -- sometimes i just miss -- >> you were on jeopardy. >> i was thinking of animal house. >> how great was alex trebek how great? >> he was the best. >> you talked to him >> yes, i talked to him. yes. when i won jeopardy, he was very nice lovely man and an incredible professional and obviously many of the fans of that show will miss him
all right. back to business, guys listen, let's just -- spacs, i want to talk spacs if i can. did you see this new one, dial capital, a lot of asset managers, it is getting together with al rock capital and the two will end up going public through ultimar. a letter of intent for it at this point the general report this morning, they confirm it. it is an interesting deal just because dial owns some of al rock and they're using it to go public there haven't been that many asset managers that have gone the spac route at this point, but there have been a few. it is another of the endless series of spac transactions. this morning we were keeping track. there were over 200 this year already. they're almost at one a day, more than one a day now. today, we have forcebacks
trading. >> they had the ceo on >> but we have got, again, these are not when they announce the deal, this is when they actually begin trading, having raised the money. so far peak, that's tom farley, a big one. things didn't go well for him the first one, global blue >> you keep insisting on accountability. >> it wasn't his fault in the sense of the pandemic, obviously, changed that business highland transcend partners, 275 million, ian friedman. live oak and sternlicht is back. jaws spitfire. >> is that a combination of the british plane and a great movie? >> i guess so. 300 million. >> and some of the names i like to keep an eye on, ackman spac. >> tonteen. >> have you seen that stock? >> it goes every day there is owl rock. not that one look at tonteen because it is 25
the last i checked >> by the way, hasn't announced the deal got to be an enormous transaction given the size of the spac itself. i'll say this, to be fair to mr. ackman, the terms on that spac very different from any others and much more investor favoriting investors much better for investors. >> some of them are not so hot. >> he's benefiting when they benefit, not just the 20% promote off the top. so but why is that -- jim, why why? >> i don't know. why did nikola go up so much >> they haven't done anything yet. they haven't announced their deal >> why is everyone so happy? >> why isn't it ten bucks still? >> i don't know. why was houdini able to get out of everything? >> he got punched in the stomach. why couldn't he have gotten past that >> i don't know. >> carl, we're seeing -- used to be able to say, well, goldman blessed it or morgan stanley
blessed it, now nobody cares look at palantir, downgraded yesterday, right back. nobody needs -- spotify, by the way, fabulous news there, everyone is talking about that there is a whole new world and there are no analysts who follow these things, which makes it really difficult, not that you don't get a, you know, a tesla. >> people, there is the warrants at 11.50 and you do get hedge funds playing in there >> i'm calling it, i'm calling it spaculation. >> that's the 4:00 a.m. traders again. >> they're back. >> every time you chart it, 4:00 a.m., there they are. >> i know frank del rio who is from norwegian cruise, he pointed out yesterday, he put out a news release, he won't sail for another four months stock flew >> you were the only person up at 4:00 a.m. >> i was up at 3:00 this
morning. >> glad to hear that. >> i got a call that i should read a keynote speech. >> i am seeing here that maybe psth was at a higher number. i may be incorrect in terms of the ackman spac. it has been quite strong. >> the people who watch "mad money," could you please on the lightning round stop calling me and asking me all the spacs. a lot of times it is a guy with a check, a blank check >> right. >> i wouldn't even leave my electrician a blank check. and i like him, he's pretty good what i like him he's pretty good >> you like your electrician >> yeah. psth, that was because it was a different as i said, a different mold it was priced at a higher number than the typical spac i want to correct that thank you. >> no problem. >> carl, what is going on that there can be so much greatness and we're sitting here and looking at these numbers right now, everyone is looking at the numbers all over the world, they
have no one has crested other than the chinese chinese yesterday, 18 cases, carl 18 cases, 1.2 billion and we wonder why they're doing better than we are. 18 cases you can go anywhere, there is probably more -- how many -- how many kohl's did they get yesterday? you wonder why -- all the companies that sell to china are doing incredibly well. i know that yesterday i had pvh, and what was the strength of pvh, it is calvin klein and tommy hilfiger chi china, that was the strength. >> it makes this house bill about delisting chinese companies a little more interesting. it appears the president would be interested in signing it, which has impolitlications. i want to get you quick on kroger they raised their guide. margins and sales up for the year hasn't happened in 20 years for kroger and definitely hard to do in that business
but you look at lowe's going back to almost april here. >> yeah, this is one again that fits the pattern that i was talking about with david. which is that it is just not enough people are now getting very, very greedy. i cannot believe that it is not enough because i thought it was very good. was there real pressure anywhere no i don't think so kroger -- this stock went up because warren buffett bought a lot of it. bought a lot of snowflake, just so we know signet reported a good number. the stock is down a little -- >> before we go, get to bob, you had xpl logistics on last night, they announced this -- you had brad jacobs on separating logistics and prap operations business. >> it is too hard to figure out what the companies are worth had they're under one roof but the logistics business is extraordinary and get nothing value. old dominion trades at twice,
trucking company, twice at what xpo trades, makes no sense to me they're in the same business. >> we're on the dow with back above yesterday's high, let's get to bob pisani. good morning, bob. >> good morning, carl. somewhat flattish open, but december so far at least is looking a lot like november. and that's generally a positive thing given november numbers look at the sectors today, once again, 2 1/2 days of trading we had, bank stocks and energy stocks have been leading the way. but technology is also up this week in general. so that's pretty good here little flattish here as you see. by and large, looking like november consumer staples and some of the other more defensive names are lagging the overall markets. this is just first two and a half days. still pretty positive overall. just want to highlight what has been going on with the airlines, positive comments from delta, of course, but the jets etf, the main airline etf has seen a huge
amount of trading and creation of new stock in that particular etf. so a lot of interest, i think some of this is retail, this is the highest level fo since going back to march. it had quite a climb back and the amount of stock that has been created around this, out of interest in airline trading, has been huge in last couple of months really one of the big winners in the etf space this year. market movers, we talked about sentiment, we talked about how there is extreme bullishness that is out there overall. we talked about how the earnings are kind of in a tough situation right now, very, very high valuation. so here you see the second quarter, we had $27 for the s&p 500, these are the estimated numbers for earnings for the s&p. q3 the big move we saw to the upside, $39. there is the big rally in the stock market we have been stuck since then, kweep waiti i we keep waiting for the numbers
to go higher we're stuck at $37, below the third quarter. this is a problem. you have prices going way up and the earnings estimates going nowhere right now. we have a real valuation gap right now. we're talking about 22 times 2021 numbers that's extremely pricey and the economy is improving and when the economy is improving, you can have a higher multiple 22, that's a pricey multiple and 19 times 2022 numbers. they got 2022 estimates out there. bit of a risk now for the markets. bullishness, extreme, we look at a simple one, the american association of individual investors, weekly survey, several thousand of their members here, 49% bullish, that's the second highest going back nearly three years, bearishness is really low, that's the lowest level since early january there. this is the simple sentiment, you get the idea, all the sentiment indicators at extremes now. you want to keep an eye on that when you have very high prices, very earnings that are not keeping up with the prices, and extreme levels of bullishness.
finally, i mentioned that house bill that passed late yesterday, that would delist chinese firms, listed in the u.s., if they didn't cooperate with u.s. regulatory authorities it is not moving the big names here as you can see. i think the key story here is delisting would be very disruptive to the global etf business, the global mutual fund business, companies are listed in all of these eamericamergingt delisting would be very disruptive there is a couple of reasons, it is very likely that some kind of deal will be reached here in the next six months or so. sometime, some deal where the chinese authorities would allow u.s. regulators to sit and examine the chinese audits, and side by side, with chinese regulators remember, this is not about doing an audit it is about reviewing the audits they have not been allowing reviews of audits and that's been a thorn in the u.s. regulators' side with the relation with the chinese.
that may get a little better also remember, the companies are now, many of them are now dual listed in hong kong. there is access to foreign capital if they eventually need it in the event that some kind of overall meltdown in that situation. i don't think it is going to come to that, though carl, back to you. >> that's a great point, bob thanks bob pisani going to get some services survey data in the next minute and then again at 10:00. to rick santelli >> yes, your timing is impeccable, carl the market, markit, services pmi, 58.4, this replaces the mid-november read that was at 57.7 so a nice gain there and if we look at composite pmi, it moved from its midmonth november read of 57.9 up to 58.6 these are the high water marks, of course, since covid hit and do remember in april these two respectively were 27 and 26.7. we virtually doubled plus where
we started with, there is always room for more improvement, we know there is a lot of pain out there, but this series, like many series of data points and the ism yet to come have improved rather dramatically intraday of 10s, we're starting to ooze yield here, yes, wear down a couple of base points of 10, down three basis points of 30s. open up to one week, you see 90 basis points is where the support should be on yield that's because the prices are moving higher and if you look at the hygetf for high yield, you'll see it is making new all time highs, new highs back to march, early march the reason that's important is because you would think with rates moving up, there would be more nervousness in this etf that doesn't seem to be nor in the investment grade lqd look at foreign exchange, continues to make headway to the upside, dollar index to the downside, both comping to extremes, unseen since april of 2018 chinese currency, dollar not doing so well.
where are the investors going after they flee the dollar position seems like they're taking up a euro position. a much different look to the chart. carl, jim, david, back to you. >> all right, rick, thank you very much. rick santelli. boeing's leading the dow at the moment, about to take out that june high as jim mentioned a moment ago as the wires now have the item that ryanair is ordering 75 more boeing 737 max jets we'll watch that dow is up 89
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is that is the formal announcement by ray mcguire announcing he will run for city mayor. the commercial narrated by spike lee. >> full disclosure, ray has been a friend of mine for 30 years. he's unbelievable. he's been a leader in the community. he understands the plight of the disenfranchised more than anyone i've ever met. also the smartest guy in my class. >> the challenges for new york will be difficult. you'll need somebody who can be a champion of business in the city that would seem to be something mr. mcguire could speak to
let's get to jim and stock trading. >> sometimes you have ceos who are so honest. i love when they do this the stock is down 50 one of my heroes this is a fantastic company. they lonl highlight herba life and newskin as the big orders. tonight is a big night in preparation for this call, i read a 68-page book called cloud data platform for dummies because i have flank slootman
from snowflake i don't want to be a dummy he's laser focused and great ceo. we have to figure out the valuation. people saying listen, you can't have a company worth 100 times sales. i can't wait -- wow, look at that down 35 last night frank. frank is one smart guy he built service now and gave it over to don don ho >> we do at nike now. >> he's brilliant. i call him the flying dutchman no one tougher he retired from the show, he was living on a cot there every day. i love him i love slootman. guilty salesforce, don't know if he sold it yet. and warren buffett
good thursday morning. welcome to "sqwawk on the street." sima is with us this hour. we'll go back to rick. >> yes, our november final read on ism services expected at 58.8 over delivered by .1 at 55.9 following an unrevised 56.6. sixth month in a row in expansion territory. not the highest read we've had 58, 56.9 you see better than expected
so we'll continue to monitor this and all the other pmis as we try to move towards the other side of the covid-19 virus dav david, back to you thank you. news out from boeing we'll get to phil la low with details. >> boeing announcing a big order for the 737 max. let me show you a live picture just outside the boeing office where you'll see dave calhoun, ceo of boeing. that is not dave calhoun he's there with the ceo of r rye -- ryanair who is ordering 75 737 maxes this is important because the max has been just decimated by
cancellations over the last year going all the way through october, boeing had 448 firm cancellations not even accounting for the adjustments which means they lost more than 1,000. you look at shares of boeing mentioning this earlier. they've taken out that previous high trading over $234 a share. we can't stress enough how important this is for boeing, the fact that these guys have gone to one of their most important customers and been able to secure an order for another 75 max's a $9 billion deal. these planes never sell for the full list prize. even at 4, $4.5 billion. it is important for boeing >> for thoefz us following the saga but not like you, minute by
minute, we have diminished capacity around the world. how much is boeing still manufacturing? >> i would say, most people believe. probably somewhere 25-30 a month. remember, faa is part of the ungrounding. delivering every plane before it can be delivered nowhere close to where it was before the max crash and before they shut down production they are probably in the range of 25-30. i'd be curious to hear the comments of michael leary.
is was only about nine months ago when things were just a disaster for the max getting back to being ungrounded he said boeing needs to get their you know what together somebody finally calling out the company really dragging its feet figuring out how to get the max fixed. the fact that they've got him back in the fold and ordering a large number of planes, that's huge >> to your point about the stock, 235.40 leading. the within we are back above $30,000. who would be the most logical player is it naturally going to be southwest? >> southwest have 280 maxes.
34 have been delivered gary kelly has been very clear when he said, look, we want to talk with boeing about where we stand with our fleet overall i'm sure there are conversations that have taken place not only the rest of those 280 planes or do they amend that order those airlines around the world got out of line. they basically said, we are walking away we have canceled our order then there are accounting adjustments in that order book those have been over 1,000 which now stands a little over and the ones factored in with expectations to those airlines there is michael o'leary >> american airlines has had a
nice day moving on to washington, house speaker pelosi and chuck schumer urging mcconnell to use a $900 billion stimulus plan as the basis of relief talks. seems like talks are moving in the right direction. >> we are expecting to get some new details of that bipartisan framework next week, the lawmakers are preparing the text as we are seeing a growing number of members from both sides of the aisle signal that they are open for the plan saying there is room for improvement and that the need to act. with the vaccine nearing approval, they said any plan needs to include money to distribute it. they will be the ones primarily
responsible forgetting the vaccine out to the public. a growing number the senators saying they are optimistic calling the bipartisan framework a move in the right direction. john cornyn calls it a major change and capto said she would support it but snapchenate majority leaders not supporting it. >> making the law will require senator's approval and signature tr of the president of the united states. >> as a reminder, mcconnell's package does not include any money store state and locate ale governments. >> that is critical for distributing the vaccine what it means for the economy, tracking data to measure a recovery throughout
the pandemic now those numbers suggesting the activity will not return to prepandemic levels until august 2021 managing director at kdw your index tracks a numbious data points what does it tell us about where things are headed? >> we created the index as a way to track the recovery as an index of 13 data points. initial jobless claims are one we are looking for a real time view of how the economy is improving. starting at 100 in february, 50 in april at the depths of the lockdown slowly going higher to about 79 where we sit today we are about 20% where we were pre-covid-19 levels.
we've been really bullish on the upward trend since we've seen since april. more recently, we've seen a modest but downward trend over the past few weeks the data is reelgly mixed. all doing well on the other hand, we have data points like moveability which tracks movement outside of your home we were a little encouraged by the news we saw. jobless claims were down week for week still the number was high. as financial analysts, we are trying to balance the financial stocks if the risk of what we are seeing as covid cases
continue to rise balanced with the optimism of what we all feel with the vaccine and the timing of the recovery from the vaccine as well. >> some data points suggesting weakness is the market right to look through those data points that suggest this will take a bit longer than expected >> with those financial stocks and regional stocks we cover it has been a really nice rally from the bottom. as i look at financial stocks and valuation, that is still cheaper from where we were pre-covid-19 banks are up above 1.6 before covid-19 i do still think we have room. there have been a lot of green
chutes we had really good data points from the banks we are seeing lower credit costs. a lot of positive trends in the industry as we look at the index it there are a lot of data points where we have some negative trends until we get on the other side of the vaccine working and getting towards a full recovery. a big part of the bull narrative that the idea that reserves may have been overdone that would be a big story if we got indication that that build out was coming to an end
>> for sure. you've already started to see that play out those indications will be that we continue to see lower. a lot does depend on the unemployment rate. we are looking at unemployment tomorrow we are looking at that to inch down a little bit. movering forward for the banks it looks good today but we really need to see to continue to have this rally i think you need to see effectiveness around the vaccine and you've got to see unemployment improve and we have to see stimulus come through as well >> these stimulus negotiations do seem to be gaining steam. many will face eviction and will
have to pay student loans again. >> the way we model, our baseline does include another round of economic stimulus i think that is in financial stocks and in the market the longer we wait, that is a risk for stocks to pull back in our baselines in the forecast of these banks as well >> interesting analysis. thank you for joining us today turning our attention to 3 m, a dow component generating annual pre-tax savings. cost cuts make sense, most were not expecting this seeing strength in personal safety, business, driven by demand for n 95s those brought in $150 million of sales. now running closer to $400
million. the company has been challenged in other positions like health, weakness and other markets like ooze and hospitality the stock has benefitted from growth to value. it has been underperforming its peers in the industrial space. like caterpillar, it has been a standout up 17% on the year up 40% in the last six months. a story we are watching closely in the industrial space. the u.s. sees a record high number of covid cases, deaths and hospitalizations yesterday, we'll talk supply chain. the ramp up of freezers. talking to one supplier about the new partnership with ups in a minute good gains on the services number don't go away. it's down to the wire,
keep it cold and get it to all parts of the world this is an elaborate operation unknown hackers imperson nated an executive from haier biomedical i'm told they used a fake name at that company but these e-mails looked real. is likely came from the global infrastructure around getting this vaccine out to as many people as you can as quick as possible the reason they tell me they suspect this was a nation and
not a criminal gaining they said the criminal gangs don't have to work this hard there is no real gain. it is not like harvesting like before this one is specifically aimed at gathering information and potentially aimed at disrupting that process ibm has this new report out. to all of those around the world back over to you >> thank you for that. a company contracted in the ubs to ramp up supply of the vaccine. thank you for joining us today >> thank you >> i don't know if you want to
comment on what ibm is telling us do you see challenges beyond what would be ordinary challenges >> i can't say that i can comment on that but i can say that there are challenges associated with making sure vaccines stay cold throughout that process that is the biggest challenge we are faced with notwithstanding that comment you had on ibm >> i want to ask you about the uk suggesting that it was a pretty good test case for the cold delivery because it is a small country, dense populations pretty good health care infrastructure the idea that if anything goes wrong there, more worry some for companies with broad entry points are you watching it closely? >> we are watching everything.
here with operation cold speed, working with ups because of the atry bul attribue described. we've been involved with state agencies and helping them to sort through and make sure as those get through the distribution hubs, they are sent throughout processes and those of ups to make sure we deliver on the promise associated with making sure we keep those vaccines cold. >> your freezers can do either one. moderna doesn't need as cold a temperature but you can do whoer wharf one and get those temperatures as cold as necessary. what is your sense right now as
to the focus and getting this right. do you have any real concerns or are you encouraged we've coupled and you've noted extremely well off to the right is a portable model that can navigate that temperature range from minus 20 plus celsius i think they have really gotten out in front of this i'm encouraged by virtue of the fact that we've been a part of it and understand the various applications navigating this from manufacturer to the distribution hubs to the use is the challenge
we've been faced with. the thing that these companies have gotten out in front of it to work and map that out and be successful in making that happen >> tell me about your business that plant in ohio, are you able to and do you need to ramp up production >> we are based down here southeast of columbus. about 150 employees since the beginning of this year about two months ago, recognizing where the manufacturers were heading with the vaccines and the speed they were heading and the device they were having with minus 20 degre degre degrees celsius.
the people basically working seven days a week, it has been a real strong run. we'll continue to did that to make sure every vaccine gets to the distribution point to be effective in that delivery mode. >> these freezer farms you are helping to build they require a lot of power. how does that become a challenge in rural, more remote locations. accessing that power to ensure those freezers stay at the ultralow temperature for a period of time >> the thing about our devise here is low power. it is a unique technology we have founded on the sterling engine by virtue of that, it is very pivotal to navigate he the temperature ranges once charged, you can plug it in
to a power point on a car and take it to some of those remote locations you are referring to >> dusty, you've had some time to plan, the game is going to start very soon. it will be exciting to watch hope you'll come back. thank you. >> thank you for our etf spotlight. looking at prime cyber security ticker hac up 20% as the pandemic continues to shift more online one name is splunging. that is splunk missing and disa pointsing the street revenue down about 11% from a year ago forecasted revenues of $650 to $700 million for the quarter stock down 22% "sqwawk on the street. we are back in two
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welcome back, everybody. i'm sue herera in southern california, more than 200 homes have been evacuates as heavy winds threaten to spread wildfires local utilities have cut power to thousands of customers. wind warnings through saturday in wisconsin, two people are in police custody after a high-speed chase ended with a crash next to the milwaukee river. the police tried to pull over
the driver for running a red light and not having registration plates. in hong kong, tycoon and advocate lai taken from court. in in. >> in berlin, convention centers to become vaccination hub. they plan to begin vaccinating more than 3,000 people a day in each site. you are up to date carl, back to you. thank you, sue we mentioned that upgraded tesla before the break 780 is the highest target on the street >> the call says adoption happening faster than they thought. the price of battery is dropping faster than they thought
with the s&p inclusion weeks away what choice do they have? >> the market has more than told you the premise that ev adoption will be a lot faster due to the fact that market is reading something in the long term and showing the willingness to cap toolize the company in a way that this might not be the case. a way that some of the assumptions are required going into a share price tesla will maintain 25% market share of that larger number. you put companies like nvidia and apple.
all of this boils together into yeah, you can get there on discounted cash flow basis on 2022, stock trades now at 110 times. all in the mix forgetting you to this point >> my eye was drawn to the last table in this as well. that group they are comparing it to nvidia and apple and cee in addition to gm to be fair. 75 times right now on value ebita, you are paying rich numbers but investors have been willing to do that they believe in this future. they apparently believe there is more to go >> it goes to transportation as a service. basically supposed to be a subscription business down the road
will be software economics at that point that's the buy in. the consideration going into the s&p while it has been overhyped, we've been doing this a long time you remember where people cared that much as to how it went in, where it went in 1.2 to 1.5%. that means not only do index funds go to that point, they see the stock's 1.5% of the index and are betting against tesla on a relative basis who knows what happens or what is priced in, we just don't know that net worth has climbed it has swelled about $100 billion by the end of last year.
you wonder what this means for his cloud and what role that plays for corporate america. >> you wonder how long he's willing to stay ill electric li this company they can issue a bunch of stock even if the shares go down we have a lot of access to capital right now. that was different from before when musk would have to finance that it is remarkable what has happened here. if the market has this wrong, it is one of the biggest blind spots you can ever remember in terms of the valuation assigned to it and the trust placed in musk >> earlier in the week, cnbc reported on an email saying they've got to crack down on cost or monitor their cost saying business is a game of
pennies. saying if we mix this um, it gets crushed like a souflet. >> i imagine that has to be a part of it we read it like we are an amazing hot streak don't get complacent you have to pay attention to the details. if you look at the stock-based compensation people in this company think they got to all figured out based on how they get paid and what the stock has done. it is more about let's not forget what we do here it does matter they did lower prices. they claimed they lowered margins and got the price down there is this dynamic where you have a lot of americans that buy a car based on how much car can i afford based on a monthly payment. different from most tesla buyers who got on a waiting list and
paid cash. kind of a signaling gesture here >> that will make next year ultrafascinating in the space. >> thank you, of course the story does not stop here can you read about the call online at cnbc.com/grow. as we head to break, shares of michaels are surging after the retailer posted better than expected earnings. company will pay $10 billion of holiday bonuses to employees we'll continue tkeo ep an eye on that stock stay with us ♪ ♪ ♪ ...i was just fighting an uphill battle in my career. so when i heard about the applied digital skills courses,
ryanair. good news coming for boeing after a successful media flight following a 20-month safety ban for the jet and after losing more than 1,000 orderers at boeing joining me now to discuss. the airlines analyst, thanks to you both let me start with you, because you cover boeing, how important is this ryanair order? >> it is significant the testing has been extensive it has been most scrutinized it is important for the program.
>> somebody who has covered the airlines for years considering their willingness to cover new purchases. given where we stand right now and how much of it is not being used >> so i think you can get pretty good deals i wouldn't be surprised to see southwest place an order for additional max aircraft for the second half of the decade. i think there is not a lot of willingness to take the aircraft through 2020, through 2021 and early 2022 as you get to 2023 and beyond, a lot of the environmental issues put on the back burner will year will come back at that point and i think the airlines-to-to the
way they get those into their fleets before 2050 and before 2040 would be beneficial in a lot of different areas including fuel burn. >> i wonder how you think about the max recovery through the lens of traffic recovery we talk about leisure returning before corporate and wondering if that ever comes back. is the max more leverage to either market rye now? >> i don't think so. i think people won't know which plane they are getting on unless they are specifically told that they are getting on a max. i feel like people aren't that sophisticated knowing every single plane type, except narrow body versus wide body. most look exactly the same
inside beside the color. i know airlines are allowing people to change their plans if they get there and see the max it is one of the most tested aircraft we've ever had and i think it will be one of the safer aircrafts we'vener ever seen i'm not that concerned about it at all, actually >> travel activity is returned now and not just around the country where they've handled covid better than others in the west have they done enough to capture that demand you are seeing on that part of the world >> so, yes, we've seen a huge increase i thought it would take a year
for china to get back to the prepandemic levels we've done in less than a year russia pandemic is also back to prepandemic levels clearly those two countries have done a good job. southeast asia has done a pretty good job of creating travel bubbles. i think hong kong is still limited but in general, to your point, we've seen the international airlines take advantage of that. because the u.s. hasn't handled that pandemic that well, they've given crewmembers a hard time. as a result, you may have seen earlier this week, united and american say they would not in fact fly nonstop they would stop in seoul, south korea as a way to relieve
crewmembers and make it so that they don't have to stay overnight in china, which has been difficult for them. >> for a moment here, the stock is still down 27% or so. 12 months let's call it 32% we can remember the turning point are they done in terms of having to raise new capital what is your sense of the financial wherewithal at this point? >> they did raise enormous amount of money in the heart of the pandemic we see them having enough liquidity to bridge back to the recovery we do see recovery in the three phases modern medicine and return to service. we'll get through that phase to the middle of next year as we ramp up production that will generate a lot more
cash that will take us through 2022 third is steady state. back when we get to air travel normal eyes. a lot of parts in the world recovering at a fast rate. i think we'll be surprised that consumer travel will start to recover. that will bode well for boeing's overall production plans in 2022 and 23 >> thank you both. >> thank you nervous about going to the gym? new comments by governor quote owe yesterday might change that. the latest and ceo of boo teak fitness chain barry's bootcamp that's next. stay with us change is all around us.
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record covid-19 cases, deaths, hospitalizations in this country, as you already know, as the new york state governor cuomo yesterday said he is paying more attention to restaurants than maybe salons or gyms take a listen. >> the salons and the gyms have new protocols and fewer attendees, frankly, and fewer people can go to a gym and a nail salon workers have to be tested you are seeing a reduction in
the cases in nail salons, gyms, net reduction in restaurants, large gatherings because the social behavior has changed. >> joining us to talk about that piece of sound right there is joey gonzalez, sewing ceo of joey's boot camp how much you are encouraged by what cuomo said yesterday? >> you know, it's nice to be recognized for all of the work, resources, and investment that, you know, the fitness industry has been pouring into creating safe spaces during covid-19. so feeling encouraged. >> you know, a lot of us know barres pretty well i still wonder, having not been since the pandemic began, how
this is going to work. because a lot of it is doing an aerobic exercise right next to somebody else. i can't imagine even six feet of distance really adds a layer of safety can you talk about what the protocols are? >> sure. so the protocols really differ from state to state, country to country, barres is in a dozen countries. depending on the level of infections, we have a lot of different sort of protocols in place. obviously, the higher infection rate, the more sort of requirements we have in our studios. and the highest infection rates were actually fully operating outdoors for now let's take l.a. county, for example. our outdoor studios put at least eight feet in between you and the person next to you so it is as safe as an
environment as humanly possible working out among other people >> joey, you were in the proces of finding a buyer to buy your company. you even hired banker, you had to scrap the plans but how quickly are you flag to resurrect the conversations as demand hopefully comes back with the new protocols that you're introducing? >> yeah. it was really good timing for us so it actually, you know, the way i sort of internalized city have such an amazing relationship with north castle that i can't even imagine what going through the last eight months would have been like with a new partner. so for that i feel very lucky. we are thinking about, you know, a transaction probably two to three years from now but what's so exciting is that during covid-19, you know, we really started to lay the foundation for barery's digital
experience can which is called barry's at home. we're leveraging the zoom platform experience which will be significantly upgraded from a brand perspective in about q-1 or q-2 of 2021 >> yeah. that's fascinating and you can see why you're going directionally that way i wonder strategically, if you think the rooms getting kind of crowded on the at home digital virtual exercise space and if you're going to start to plan for a day where actually people want to go back and work out next to somebody that maybe they don't know in a public barry's room. >> yeah, i mean, surprisingly, it's hard for a lot of us here to imagine this. but surprisingly, there are a lot of places in the world where that's already happened. we have a lot of studios operating now at, you know, 50% or more. some are at 70%. like some of our studios in
scandinavia. and what we've seen is despite being sort of inundated by all this new information saying that people aren't going to feel comfortable coming back to in person fitness for a while, it's actually not what we're seeing in markets there is a rush, which i think is probably linked directly to people's level of comfort. and their government and who they trust but we're definitely seeing a massive demand once launched the studios. >> i think a lot of that is going to depend on availability of a vaccine, right? i would imagine that you probably done some research on your client base if they feel confident in the vaccine and feel confident that enough people had it, then maybe it's no the that much of a moral dilemma anymore anyway >> totally agree it will 100% dependent on the vaccine. you know, the uk is a huge market for us. we're very excited to be able to
relaunch on december 2nd and, you know, they just got news that they're launching their vaccines in a week from now. so life is changing around the world at different paces we're really excited to hopefully have that same kind of news in the u.s. soon. >> yeah. london and the uk going to be interesting to watch in the next few days joey, we're rooting for you and appreciate you coming on to talk about it thanks so much >> thank you so much have a great one >> joey gonzalez barry's boot camp. microsoft head of cloud is going to join us after this break. you don't want to miss that as markets are setting some n highs. we're back in a moment but we are hoping things will pick up by q3. yeah...uh... boss: doug? sorry about that. umm...what...its...um... boss: you alright? [sigh] [ding] never settle with power e*trade. it has powerful, easy-to-use tools to help you find opportunities, 24/7 support when you need answers
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