tv Fast Money CNBC March 31, 2021 5:00pm-6:00pm EDT
our reach to modernize those highways you and your family could travel from coast-to-coast without a single tank of gas, aboard a high-speed train, we can co affordable, high-speed internet, wherever you live. imagine handicapping your children a imagine handing your children a world leading clean energy one of the biggest threats of our time, together with the american rescue plan will create millions of jobs, estimated some 18 million jobs, good-paying jobs and it will level the playing field to ensure new jobs are good jobs that can you raise a family on and assure free and fair choice to organize and bargain collectively that's why my plan ask congress to pass the protect and organize
act, the pro act, and send it to my desk. this plan is important not only what and how it builds but also where we build it includes everyone, regardless your race or zip code. too often economic growth and recovery is concentrated on the coast. too often investments fail to meet the needs of the marginalized communities left behind there's talent and innovation everywhere and this will connect our small towns, businesses, university, entrepreneurs all across america we have to move now. because i'm convinced if we act now, in 50 years people are going to look back and say this was the moment that america won the future i'm proposing a one-time capital
investment of roughly $2 trillion in america's future spread largely over eight years, to generate historic job growth, economic growth, help businesses to compete internationally and create more revenue as well. they're among the highest value investments we can make in the nation, investing in our infrastructure put it another way, failure to make these invest thes adds to our debt and puts our children in disadvantage relative to our competitors. that's what crumbling infrastructure sat does. and our infrastructure is crum crumbling, ranked 13th in the world. once more, it heightens our vulnerable to attract our adversaries to compete in new ways now and our adversaries are worried about us building this critical infrastructure
these are investments we have to make we can afford to make them, we can't afford not to. so how do we pay for it? i spoke to the majority leader, i guess he's no longer majority leader, has been for a long time i spoke to the republican leader about the plan everybody's for doing something on infrastructure. why vnt we done it why haven't we done it no one wants to pay for it less than four years ago is congress passed the tax cut to increase the national debt $2 trillion and didn't meet any of the predictions it would in terms of growing the economy overwhelmingly the benefits of that tax package went to the wealthy est americans and included new investments by shifting profits and jobs overseas. it was bad for 34american
competitors and deeply unfair for middle class families and wrong four our future. i start with one rule, no one making under $400,000 will see your federal taxes go up, period this is not about penalizing anyone i have nothing against millionaires and billionaires. i believe in american capitalism i want everyone to do well but here's the deal, right now a middle class couple, a firefighter and teacher, with two kids with combined salary $120,000 a year pays 22 cents for each additional al dollar they earn while multi billionaire company aboard pay
nothing at all we're going to raise the corporate tax. we all agreed it should be 28% but they reduced it to 21% we're going to raise it back to 28%. no one should be able to complain about that. it's still lower than what that rate was between world war ii and 2017 just doing that one thing will generate $1 trillion in additional revenue over 15 years. in 2019 an independent analysis found that there are 91, fortune 500 companies, biggest companies in the world, including amazon, with various loopholes where they pay not a single solitary penny in federal income tax i don't want to punish them, that's just wrong. that's just wrong. farmer and teacher paying 22%.
amazon and 90 other major corporations paying zero in federal taxes! i'm going to put an end to that. here's how i'll do it. establishing a global minimum tax for u.s. cooperation of 21%. we're going to level the international playing filed that will raise $1 trillion over 15 years. we'll eliminate deductions for cooperations for off-shoring jobs and shipping assets ove overseas, you do that you pay a penalty, you don't get a award in my plan use the 156ings from that to give companies tax kreds credits to locate manufacturing and production here in the united states. we'll significantly ramp up the irs enforcement to corporations that fail to report or under report their incomes, will all
add up to more than what i propose to spend in just 15 years. it's honest, it's fiscally responsible, and by the way, as the experts will tell you, it reduces the debt the federal debt over the long haul let me be clear, these are my ideas how to pay for this plan others have additional ideas, let them come forward, i'm open to ideas so long as they don't impose tax increase on people making less than $400,000. let me close with this historically, infrastructure had been a bipartisan under taking, many times led by republicans. was abraham lincoln who built the transcontinental rail road and dwight eisenhower the state highway system a republican i could go on. i don't think you will find a republican in the senate or house that doesn't think we need
to improve our infrastructure. china and other countries are eating our lunch there's no reason it can't be bipartisan again the divisions of the moment shouldn't stop us from doing the right thing for the future i'm going to bring republicans into the oval office, listen to them, what they have to say, and be open to other ideas we'll have a good-faith negotiation any republican that wants to help get this done but we have to get it done i truly believe we're in a moment history is going to look back on this time as a fundamental choice having been made between democracy and autocracy's. there's a lot of autocrats in the world. the reason they're going to win democracy can't reach consensus any longer that's competition between america and china and the rest of the world is all about.
it's a basic question. can democracy still deliver for the people can we get a majority? i believe we can i believe we must. delivering for the american people is what the american rescue plan has been all about and it was overwhelmingly popular when i wrote it, overwhelming bipartisan support with registered republican voters and ask around, if you live in a town with a republican mayor, republican county executive, ask them how many would rather get rid of the plan ask them if it would help them at all it's what the american job plan is about the new one i'm proposing. i hope republicans will join this effort. i hope and believe the number of businesses will join this effort i hope and believe the american people will join this effort
democrats, republicans, independents, we can do this, we have to do this. we will do this. we just have to remember, this is the united states of america and i've said it a thousand times, there's nothing beyond our capacity if we act together. so it's time to move together. thank you. and i hope i get to come back to see you folks after this plan is passed, and the question is, will have to attract even more people because we're building so much god bless you all and may god protect our country. [ applause ] >> and welcome to "fast money. president biden speaking in pittsburgh laying out his
massive infrastructure spending plan and his plan to pay for it which would include tax increases on the wealthy america. let's get to the details. >> the president there trying to strike an inspirational tone, calling on the country to consider the possibility of american innovation and under scoring the fact he's calling a once-in-a-generation investment in infrastructure is also fiscally responsible a few new details he shared included raising the corporate tax rate 28 percent would raise $1 trillion in 15 years and global foreen income tax would raise $1 trillion. and said the $2 trillion infrastructure spending would be paid for more in 15-years and they could raise
more revenue to make up the historic amount of spending. because he said that this is going to be not just about paying for infrastructure but also about making america more competitive so you're starting to hear the argument that democrats are going to make against republicans and against some business groups that say that raising taxes on some businesses would actually make american companies less competitive. particularly overseas. what the democrats are saying and what president biden laid out today is that by creating jobs and new opportunities for investment that is actually going to improve american competitiveness and create a path forward for a stronger economy. we'll see, melissa, how it ends up playing out with republicans, particularly on capitol hill who are already signaling they are not going to vote to unwind tax cuts put in place just four years ago. the president calling for unity and bipartisan on an issue that
republicans and democrats have agreed on in the past. >> maybe stumbling blocks potentially is that this plan is far-reaching the summary is two dozen pages, that's the summary of the plan, and it includes things like child care, money for housing and things that don't come to mind necessarily when you think of infrastructure. >> well, that's right. the plan includes $400 billion for what they are calling the care economy it includes $100 billion for broadband. $180 billion for rnd money to retrofit schools. it is expensive and wide-ranging and remember, this is just the first hal of the package the the americans job plan and jet -- yet to unveil the americans family plan to include more likely to see some of the increased rates on
high and wealthy households so this is only part one of two. and already it is sweeping large democrats would stay bold. republicans would say overreaching i think where you're going to start the conversation on capitol hill is not bringing two sides together but what are the legislative tools that democrats can use to get this done house speaker pelosi has indicated she'd like to see something pass by july 4th according to a source familiar with her thinking. we'll see if they're able to meet that timeline. >> thank you let's bring in guy adami, tim seymour, dan nathan -- we've all been sitting quietly and intensely listen to the president, danicaguy adami, whe think of the plan, do you think of what will be spent on infrastructure and how to benefit or do you think
most li about the rise of corporate taxes and impact on the market. >> well the market doesn't seem that concerned about the rise in corporate taxes. this has been telegraphed for quite some time and here we are basically s&p 4,000. it what i do think about and what we talked about and what karen's been talking about which is uri, which she can wax poetic about, or some beneficiaries we talked about caterpillar today came within a whisper of its all-time high before pulling back and balken materials. the concerns are the stocks basically discounted some moves in the stocks have been extraordinary again, uri from where it was from uri, caterpillar, same thing the question is will the market
come down, some already have. >> yeah, because they will have priced in to some degree a rise in the stocks in terms of business, karen, how do you approach a name like uri, which you've owned for some time and seen a nice rise in. >> yeah, i mean, as guy pointed out, you know, the depths of march was maybe 70 last year and 330 today. i think guy also pointed out, we've known for a while we'd see an infrastructure bill so i do feel like a lot of it is priced in so now i probably am looking to sell some out of the money calls. i think guy made an interesting point about taxes. in that, we've known that for a while. we're likely to see a tax increase, yet the marketdoesn' seem to care look at united rental or some steel stocks that would be beneficiaries of infrastructure, you know, they're reflecting it, yet, maybe the market just doesn't care about the tax rate
rise maybe they don't think it will happen i actually do think it will happen i think there's enough political will that people thought 2017 tax plan was somewhat overreaching in it's own way so i think we will see higher taxes and i'm hanging on to my uri but going to be selling out of the money calls against it, a little bit frothy. i love it. one more thing the business model is fantastic with higher utilization and not higher cost. it drops the bottom line a lot it's very profitable. >> that would be really, really good news considering the s&p closed at record high. so do you think it's a reality with biden bringing up amazon paying zero in taxes and average school teacher paying 22%. >> i heard that speech and i heard a lot of things that are very important to our country but we're dropping this into
market content only for this analysis i heard a lot about taxes. i heard a lot about big tech having a target on their back. i heard a lot about, again, the ability of companies to continue to buy back the aggressive pace that they are doing. i'm of the few that the market really just has not priced in the multiplier effect differential from higher taxes versus the short-term gain from stimulus we're starting to get detail on taxes today or at least where it's leaning so i think that's the point financial -- yeah higher taxes, you can see the minute the polls came in georgia what the composition of the senate would look like and what it would mean for the possibility of tax bills now you're getting detail which part of the tax structure will be gone after again, for equities, i don't
think they've begun to address this especially at a time, look, at some point we're going to have to pay back some of this and i think the context of today's announcement, a lot of that was priced in. >> okay. dan, what do you make of this whole package? >> yeah, i mean, tim mentioned a word, pay back so what happen in 2018 is that we borrowed $1.5 trillion from the future and gave it to corporations and they did not use it to invest in america, in their businesses, hire people, that sort of thing, they bought back their stocks. over the next two years buy backs in the u.s. equal probably about $1.5 trillion, which was the tax cut, at that point so what i like about this plan is that there's going to be some sort of is, you know, focus on actually investing in infrastructure i think the pendulum will shift. i think every new administration we get we'll have this fight on
taxes back-and-forth we'll probably arrive at something mid-20's for corporations we know the nominal tax rate was much lower than 35% before they cut it in 2018 i guess at the end of the day if we find the right equilibrium where corporations are insentivized to invest in capital that's best for america. and reshore these jobs there's a five-year attack on go globalization and all of a sudden our industry is well positions whether because of the disruption of the supply chain that was evident during the pandemic, we want to make stuff here, chips here, foundries here, our auto companies are investing in ev and at mouse, it's great for america, we need to find the right tax rate and maybe this path is right for that
>> to the point of buy backs, even just the element of buy backs and that support in the market, if that goes away almost entirely because the gravy train of the tax cuts gone, then, you know, you lose that one support in the market and that could be trouble for equities. >> that's an interesting point i completely understand it at that level i would push back and say companies have got lazy in last 12 years because they haven't focused on the business because money is so cheap and they only have to buy back stocks as they go higher so if you take that away, it might be the most bullish thing possible for the stock market i think that's just another way to look at it, fed policy has made people lazy, ability to buy back stock, take that away and they focus differently that's a bullish thing. >> all right now more from head
of u.s. equity and strategy at bank of america. you said the market was it pricing in infrastructure for a long time. so are there any surprises in what biden unveiled. >> i think the market is pricing in the good news around infrastructure. if you look at just a few measures of valuation, market cap of the s&p to money supply, that indicator suggests that the market is expecting to see over $2 trillion of near-term stimulus, just based on getting back to some kind of average multiple. now, i think, to your trader's ijt point, i don't think the market has necessarily priced in the negative which are, how are we going to pay for that and where i worry is that we're starting to hear more and more concern from investors on tax hikes. and while that's not necessarily
ato cooperate earnings we're still expecting strong cooperate earnings we think potential reversal on tax hikes could take as much as 5 to 10% off earnings growth for this year remember, we're still forecasting 20% earnings growth. so we'll still see strong earnings growth but there's a pretty big differential between kind of pre-and post-tax reform what that earnings growth is going to look like and problem is we're likely to see infrastructure spending over a protracted period of time whereas tax hikes hit immediately, probably some time next year if we see them that's the risk, the timing of the good news, you could hit a potential negative. >> interesting point that this stimulus to the economy will happen over such long time versus immediate hit
but the 5 to 10% earnings growth is based on 28% corporate tax rate. >> exactly, the partial reverse on the bush tax cut and then the foreign earnings excess tax -- >> what's that mean to the multiple in the s&p 500. >> we were baking that in we're not super bullish, we're looking at 3800 for s&p by year end. i continue to say i think action this year will be in earnings not multiple expansion but where you will see multiples continue to expand is in cyclical gdp sensitive areas of the market i'm a big fan of irndustrials, we need to remember we've seen industrials and cyclicals and cap ex do really well since last
march but think where we were, the world was ending, we were in a complete global collapse, of course stocks have gone up since then it's interesting we've seen new highs for tech every month since late last year whereas we're only starting to see new highs in some of these industrials and cap ex beneficiaries on a valuation basis, consumption plays, covid beneficiaries are still treating at premium in some cases to cap ex beneficiaries i think there's still room to go in this cyclical kind of cap ex benef beneficiary trade i like industrials and select ter materials and pockets that could do well on a continued basis. >> thank you so much more on cnbc.com/pro
let's quickly trade this, tim, she's already factored in 20% corporate tax rate and stands on her estimates for the s&p 500. make you feel better >> well, i'm not sure. i think the market has yet to really address and pay for the taxes. so what she said about the companies that benefit most, look, gm, a name you know long, case in point, that stock did nothing for five-years, nothing. talk about reinvesting in their business talk about reinvesting in part of the infrastructure bill parts of this country like ev and efficiency and weather creating jobs. i think this is about multiple expansion. in terms of industrials and commodities i want to buy them when they're expense up so we're seeing them rerate, that's the time to own them as an investor. >> treasury secretary janet yellen speaking about vulnerabilities in the hedge
fund world more on that. >> yeah the blowup of arkagos, fast -- got the attention of the financial stability oversight council. bringing together all regulators including yellen and fed chair jerome powell just releasing th statement saying this was discussed, no details provides but yellen signaling more aggressive stance on regulation saying need to do more with vulnerabilities she's reestablishing the reg fund working group and will look at how hedge funds will amplify stresses on the system and look at vulnerabilities of non-bank financial intermediaries and open-ended mutual funds and money market funds, all on the list but not necessarily focused
on also pledging disruptions in the treasury market last split-finger from the pandemic and forced the fed to liquidity. finally -- climate change discussed for the first time by f stock. >> they won't say this is directly in what gone on to arepegaos nothing to do with it. >> we did find out that the arcagos -- in the event, it was actually discussed at this f stock meet zbrg okay. thank you. i'm going to call the family office headed by bill fong so is good or bad thing to get this working group restarted for the hedge fund industry. >> well that is a good question. depends what they make of it, right. it seems to be protecting banks
from, i don't know, at what point did they become aware that, wow, they all had this exposure and that makes it that much riskier, because if everyone wants to try to get out at the same time we seen what happens. for hedge funds who want to continue this kind of leverage, probably a bad thing, that's okay. >> tim, you're shaking your head, no doesn't make a difference? >> no, i agree with karen, i'm shaking my head thinking poor banks, like they didn't know what they're doing, come on, they have very sophisticated risk management team >> some banks make money off this. >> yeah. again, by the way, trading swaps is one of the most profitable things you can do, they make more money trading swaps than on cash so to the extent they took some risk, they're big boys, i don't think we need to protect the banks from the hedge funds, i think they fought out that
business i think hedge funds, as we said two nights ago, probably have leverage similar to where we were back at the lehman crisis not catastrophic levels but bank balance sheets are fine. more on 34micron. >> stock was about 110% in the past 12 mounts and now higher in the after hours. micron beating on the top and bottom, q3 guidance stronger than expected. matt bryce said inventory and account receivable came down, shipping everything they can, he has a neutral rating on valuation. on the call, is seeing high demand in multiple markets in pc continuing to see healthy
demand mobile grew 21%. auto more demand than micron can supply 2021 is shipping up to be solid with overall improving in last earnings call. >> josh, thanks, josh lipton guy adami what do you think? >> it's interesting -- you say okay it's maybe not a good comp. the street was looking for 17% so this is a really good quarter. if i'm not mistaken, cocoa b wear was talking about the options action in micron, i think you stay with micron and it continues to grind higher >> dan, what do you think of micron here? >> i love that guy adami immediately going to the operating margins.
you've been doing this with him too long and always goes to the operating margins. >> usually. >> i love it listen, i think they're saying all of the right things and i think supply constraint, you think of the secular areas they're exposed, a.i., 5g, that sort of thing, it sets up pretty well i wouldn't be concerned about analysis as magnum pi just referenced. >> that would be josh lipton coming up we'll dig into where the markets are heading from hear. later, microsoft gets enlisted storing multi-billion dollar deal with the u.s. army. deal with the u.s. army. details straight ahead deal with the u.s. army. details straight ahead these days, we wsophistic.
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. welcome back to "fast money", big day for stocks, s&p 500 cloe -- s energy was the best sector q1 with best quarter ever more than 29%. and staples lag. now time for cnbc quarterly report we've asked some of the brightest minds where they think the market is heading so we thought it would be time to play a game, we love games, to see how our traders answer the survey let's dive in. what's the most crowded trade in this market write your answers on your boards with your dark markers. there you go good job, guys
♪ all right. some people are writing very long answers time is up time is up let's see your answers hold up your boards. karen, pencils down. hold up your boards. most crowded trade okay reopening. short u.s. dollar. dan's still writing. got to be short bonds. doesn't line up with the survey. 41% of voters, the majority, say bitcoin followed by big tech, cyclicals and small caps white boards cleared please. we're going to get to the next question over the next 12 months. this is would you rather would you rather buy j.p. morgan, goldman sachs, paypal or square ♪ write, write, write, people. ♪ i mean, how long is this going
to take. it's like four letters at the moment okay time's up. t time's up, markers down, hold up your white board three j.p. morgan very interesting. according to the survey 48% say j.p. morgan. so you nailed it, guys zero percent said square, guy. you're alone out there >> great job, guy. >> generally speaking. >> clear your boards let's move on to a reopening play over the next 12 months would you rather buy hilton, air bnb or livenation. okay write, write, write. ♪ okay hold up your boards, please. hold up your boards.
and we have, well, obviously karen is livenation. so two livenations here, 50% of our panel. survey says hilton had half the votes. only tim here had hilton only 19% had livenation. good job with the white boards coming up, big win for microsoft today. shares zooming higher. much more on that straight ahead. plus company run by hollywood broker making another attempt to go public with a brand new director on its board we'll tell you who it is when "fast money" returns
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-- i think it's a great deal. i'll also say microsoft is probably the best looking chart when you look at the consolidation over the course of the first quarter, up 6% first quarter. >> best looking turn of the market, guy, you agree >> well, i haven't looked at all of the charts on the market. but looks good to me i think you've had the pull-back from 245 down to these levels here. i think dan's right. i think the best looking thing on this show though, if i may, for a second is that nagahide vest tim is sporting, just fantastic. >> looks like wool or some sort. >> it's not naugahyde haven't wore naugahyde since the 70's.
>> take the 5th. >> we're breaking down more moves when "fast money" coming right back at chevron, we're lowering the carbon emissions intensity of our operations, investing in lower-carbon technologies, and exploring renewable fuels of the future. we work hard to care for the homes we love. but it's only human... to protect the one we share.
of call today, firm upping the price target from $27 to $115. shares are at $122 right now apple noting the ev cars haven't been in the stock. big tech overall had a very good day request -- with nasdaq making strong earnings in the face of the 10-year yield. >> if you look at nasdaq against the s&p a lot of that, call it destruction relative value-wise was put in about two weeks ago. since that point, especially semiconductors outperforming s&p by 8% in last couple weeks apple has traded below 50 for longest period since 2019 to the extent you need another story outside of 5g and refresh, maybe this is the story, but i just
don't think we're ready to a scribe a particular value. i think the story with apple will be a longer refresh cycle and 5g is a gift to keep giving for years. >> want to make a correct it is sharing 20 above -- where it was -- on apple you are talking about a name with 26 multiple which the market seems to be comfortable with i don't think the ten-year yield ask detriment to apple but in terms of overall it's climateizing and getting used to the lofty levels, as long as it is used to the 20,000 foot level it will be easy to get to the summit which i think happens in may for empty e --
may for mt. everest. i am still in the belief yooelds go higher and will be negative for nasdaq. >> some see climatization some see frog in boiling water. we'll see. we have star-studded news in the ipo world. let's get to the details. >> melissa, endeavor group filing for ipo, this is the talent-agency company backed by ari emanuel key question what's changed between now and then the ipo market has been hot and more ways to go public endeavor is sticking with the traditional ipo because it has big name anchor investors. including -- ten cent, third point several others
have agreed to buy shares ahead of the ipo at $27 a pop. elon musk, tesla ceo is on the board as director nominee. there's an agreement for endeavor to buy 100% of ufc currently holds 150.1% stake and upon completion of the ipo will purchase the rate. what hasn't changes. endeavor is losing money revenue shanking $3.5 billion to -- net losses 5 -- [ reading ] 234r 3w4r57 representation 36% back over to you melissa >> all right deadra thank you.
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time to go around the horn for the final trade, tim seymour. >> gm they're going to sell 1 million ev cars or autonomous systems by 2025 i think that's the story. >> karen fineman >> yeah, so looking for low valuation stocks, wall green boots came out with earnings which are very good, with a new ceo, instead of doing the kitchen sink she's very positive, even up 4% i still like it. >> dan nathan? >> yes, we were talking about high-valuation software names. microsoft does trade at a high valuation but not relative to some of its peers though it's a big, big one i like microsoft >> guy adami >> in the "fast money" archives, karen had a great line, she once said i'd agree with dan but we'd both be wrong which makes me laugh every single time.
qualcomm getting off the mat here, mel, qcom. >> all right, thanks for watching "fast money." i'll be back tonight at 8:00 p.m. for our cnbc special "race and opportunity in america". don't go my mission is simple, to make you money i'm here to level the playing field fur all investors. there is always a bull market somewhere and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cramerica other people want to make friends, i'm trying to make you money. my job is to entertain and teach you. call me at 1-800-743-cnbc or tweet me @jimcramer. bye, bye reopening
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