tv The Exchange CNBC August 16, 2021 1:00pm-2:00pm EDT
calls. steve? >> been pressing my china shores so short baba. if people who own these do any work, they realize they own nothing. these are going lower. momentum down. >> pharma jim, need a name >> cvs. >> good stuff. thanks, everybody. "exchange" is now. >> thank you, scott. hi, everybody. i'm kelly evans. here's what's ahead this hour. another nasty data surprise. first consumer sentiment plunges. now, new york area manufacturing slumps is the fed about to make a major policy mistake by tapering soon? we talk to economist dave zerbos about that plus, taliban takeover the u.s.-backed government collapses. how big a setback is this for the u.s. on the world stage? and the $2 trillion crypto trade. we dissect bitcoin's staying power and what bulls are saying
about ethereum now dom is back with the numbers. >> feels so good, doesn't it, kelly, to be back in our normal positions, almost like it is a little normalcy back you can see a little lighting work has been done yes, we are back in our home stations here, and which particular move for the markets overall has come off the session low. the s&p is off by one quarter of 1% the dow is about flat now, 20 points nasdaq had been the laggard, off by 1.5% and more earlier, now only three quarters of 1%. buying happening in the larger cap technology names one place you're not seeing a lot of relative strength is in the reopening trade, the economically sensitive sectors that are banking on more of an economic recovery, especially in travel and leisure booking holdings down 4% norwegian down 2%. live nation off lows, about one-half of 1% the oil and gas trade, petroleum, indicative there, off 4% there are concerns about chinese
demand servicing and whether the covid delta variant could play into an economic slowdown. but there are two places, yes, they are marginally negative right now, a bit coming back intraday, but apple and microsoft. both stocks hit record intraday levels today microsoft has been the j jugg juggernaut, the orange line. these two stocks make up roughly 12% of the s&p 500 make up roughly 21% to 22% of the nasdaq 100 they are both cruising higher, so maybe the megacap technology trade is still in tact that's one of the things a lot of traders are watching, to see if this has staying mower. the broadening effect, or if it is the big technology companies. back to you. >> two stocks are 12% of the s&p 500, wow apple and microsoft. dom, thanks. september taper announcement is looming over the markets. reporting it has growing consensus in the fed, but is the recovery losing momentum take the university of
michigan's consumer sentiment index. the reading posted one of the biggest falls on record, lowest record since 2011. worse than during the pandemic this morning, the new york manufacturing index, the empire state, posted its third biggest monthly drop on record my next guest says the fed is playing a dangerous game with its hawkish turn when the economic data reflects a scarred and fragile consumer joining me is chief market strategist for jeffreys. i like having you on because it feels like a contrarian voice. wouldn't you agree you must be pushback people can say, how can you possibly think the economy isn't super strong right now >> well, i mean, i'm looking at that survey like everybody else did, and the chief economist for the university of michigan's center for consumer -- that does the survey, center for the consumer, he wrote a really bleak, you know, assessment of what we saw in that survey you know, i'm just taking it for what it is i'm watching the cpi data last week, as well. you have a 0.3 on the core after
a 0.9, 0.7, and a 0.9. it looks like the transitory story has a lot more leg to stand on than this sort of, you know, return to hyperinflation or '70s or whatever rhetoric people want to throw at the u.s. these days as you said, the empire certainly not a good story today. so i don't understand the rush i don't understand why there's a rush when we're still playing with this delta, hearing about landa. we're all flying blind there's a lot of -- as richard curtain from michigan wrote, the chief economist there, wrote, there's a lot of emotional scarring in our consumer maybe the fragileness of that is a little more -- a little more there than people think it really is. >> don't even tell me there is a lambda issue now you know -- >> exactly they don't want to talk about it. >> that goes back to one of the
big questions people have. come took the drop in consumer sentiment and said it is because prices are up, it's because no one can afford anything and are experiencing sticker shock that's a different issue than a demand-sided one don't we have a consumer who is pretty flush with cash we're still going through the child tax credit payments for the next few months. >> we do and that would be a nice n narr narrative, but it's not the case when you dpig into the data what you see is actually, you know, job and employment and income sentiment fell back during last month. that's with 10 million job openings in jolts. so this is not a consumer that's feeling like this is, you know, a wonderful time it's a consumer that still has a lot of concerns. look, a lot of the concerns, kelly, may be other things it may be the political divide between republicans and democrats in the country people who, you know, want to mask children or don't want to mask children in schools we have a lot of division in the country, and that can feed through to consumer sentiment, as well. that said, i mean, it matters, and it matters for when people
decide to spend. yes, we have cash, but, look, gdp is still just up one-tenth of 1% cumulatively since the end of 2019. that is income that is production we are flat since the peak of q4 of 2019 or up 10 basis points. for all we've done and all we've added, we still -- normally we grow 2%. that's the fed's dot we missed that for six quarters. >> yeah. >> it's a lot. >> so to your point, in the sentiment survey, i think it showed that sentiment amongst republicans was at a record low. sentiment amongst democrats was holding up absolutely, there is skort of a divide that it is picking up on more so. the other trends you cite are worrisome, as well let me ask about something that could further cloud or confuse the picture. because of delta, because of the port closure and the supply chain issues that are fresh out of china right now, the price pressure situation is going to
get really bad again so i don't know exactly which ones and where, but we're about to head into a series of readings that once again show prices picking up, shortages happening. but, you know, i'm going to feed the inflationary idea. at the same time, you're describing an economy that is barely treading water. >> it is important, i think, to recognize, kelly, a lot of the inflation data the fed looks at are eflators i don't want to get too wonky and economicy on anybody, but they try to counter for the substitution effects so when something from china doesn't get here or is going up in price, we substitute out of it and get something out so the cpi is a fixed weight index, but the pc deflator and the gdp deflator are not the fed looks at those so we should be able to see the substitution effects, though they haven't been as readily apparent as many economists might have thought as of yet. >> yeah. >> i'm not so worried about a big price pickup i really am not.
this whole price story was really in the cards. it was much bigger than what many people thought, but we knew it was coming. we knew there were supply chain problems it was probably, you know, certainly, you know, more than a few tenths each month for the last three, four months. >> let me ask it a little differently, and you probably notice this. over the weekend, 50th anniversary of brent and woods you've seen the charts making the rounds u.s. gets off the gold standard, and the standard of living goes crazy. home prices are in insane year on year gains. people are experiencing the pressures we talked about. what do you say to the folks, david, who say there is no way we're not experiencing -- i don't know how you -- an affordability squeeze? their concern is if the fed continues what it is doing now, it is going to get worse make the case for why continuing the purchases at this month lipase will be better for americans than tapering. >> i think it just comes down to
the simple fact that we have a consumer which is far weaker than many people thought that's coming out in the survey data we have an economy that still needs a lot of additional stimulus to get back on a growth path, pre-covid growth path that's off by cumulatively 3% of gdp, which is an enormous number to get back. and we still have legitimately 5.8 million jobs that are missing. if you count the jobs that would have been created in a normal period over the last six quarters, we're missing close to 9 million jobs as was put out there a week and a half ago. we have missing jobs, missing gdp, a fragile consumer we're learning a little more about what's the rush? second of all, we've had ten years of inflation misses. ten years, a decade. we basically closed the gap on about five or six of the years, but we're still undershooting when looking at a lookback that's any longer than five or
five and a half years or so. so i don't know. if the fed is an average inflation targeter, what's the rush we just got really good news on the cpi, it is coming down from the 0.9s and 0.7s to 0.3 let's watch and see. the story of the '70s, and we can talk about it forever, kelly, but we don't have the time, is a completely different story. it's a story about massive increases in the labor force we had the baby boomers coming into the labor market all wanting jobs, all wanting to buy stuff, all wanting to start households we have little labor force today. we have a demographic shortage, and everybody company that have a demographic shortage in the labor force, japan, scandinavia, they have deflation, as we have the last decade. this should be welcome news, what's happening on the inflation. we should be celebrating, not being scared. >> turning the world on its head, as many are seeing and experiencing it, dave. i really appreciate it it's amazing because we know the
way the fed works, they're just messaging the taper is about to start. it is like turning a ship. if they reverse course, it is not going to be tomorrow >> kelly, it is really important. look, we're in a politically sensitive point for the fed. we have two vice chairs and a chair that are all coming up to be reposted, effectively, by february we have rich in january, and then we have jay powell in february the politics becomes very, very complicated. they have to talk a little tough. they have to sort of, you know, lay their groundwork for being a little more traditionally central banker tough to get through the congressional gauntlet that is a difficult gauntlet to get through. so the probability of a mistake and a messaging mistake and a testimony mistake really goes up a lot here that, to me, is the only real risk for the s&p as we have it. >> when you get out, then we know it is real. >> i'm not out of that i'm loving that. >> hanging on to stocks. dave, thank you. we appreciate you all your time
today. david zerbos of jeffries before we go, tesla shares are down 5%. u.s. safety regulators opened a formal investigation into what is sometimes called autopilot, the company's driver assistance system phil lebeau is here with the latest details shares are moving lower throughout day. >> it is a significant investigation, kelly who knows what ultimately will be determined by the regulators after they investigate the crashes. here's what the investigation will be looking at we're talking about 11 tesla crashes where they crashed into emergency vehicles when they were in auto pilot or in what they basically call their driver cruise control system. 17 injuries, one fatality. the models covering this probe, the s, x, y, and 3 basically all the tesla models from 2014 through 2021 all together, there are 765,000 tesla models covered by this investigation. the crashes in focus, this is one of them.
this was in california in 2018 another in michigan. this was, eti think, last year you also have one in connecticut. in each of these cases, what the investigators are going to be focused on is did the drivers follow the system, or was the system not functioning properly, or were the drivers falsely believing the system was working? a lot of questions that need to be answered. nhtsa out with a statement today. nhtsa reminds the public that no commercially available motor vehicles today are capable of driving themselves every available vehicle requires a human driver to be in control at all times, and all state laws hold human drivers responsible for operation of their vehicles. for elon musk, he has been defending autopilot for some time critics have said, look, this is a system that tells people they can fall asleep, take hands off the wheel, do everything but pay attention. tesla is explicit in its language to drivers, saying, you must be in control of the
vehicle. you must pay attention that said, a lot of people sit there and say, look, the system sort of suggestions that you don't have to pay attention. so that's one of the questions that will have to be answered. model 3 and model y, they have cameras so they can monitor the driver and then alert the driver if they are not paying attention or if they do something crazy or stupid where they're looking away for an extended period of time. >> wow you have to wonder if tesla customers at some point are customers who don't want that surveillance for now, phil, thank you for bringing us up to speed. phil lebeau, tesla shares down 5% coming up, is social media going to cause a generation of losses amongst new retail traders? we'll look at the science of making money decisions while others are watching. plus, president biden is set to speak on afghanistan at 3:45 p.m. eastern time. ahead of those remarks, we'll speak with eurasia group about the political fallout for the u.s. as it battles with china for global influence we're back in a moment
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that's because you all have xfinity mobile with your internet. it's wireless so good, it keeps one upping itself. weapolcome back to "the exchange." social media may be fueling the markets, especially for younger investors. christina has more >> we know there is a new era of meme investing upon us the online world encouraging
each other to hold investments, regardless of their potential losses it is public nature that could be why younger retail investors are willing to take on the risk. six in ten gen-x and millennial investors are part of grown ups like reddit, and many are getting financial advvice throuh youtube and reddit a recent survey of 18 to 24-year-olds were found to be far more likely to choose riskier financial decisions when being watched by others. today, investors are constantly sharing trades on twitter and enko encouraging each other to stay long some can call it the mob mentality. behavioral researchers say this risk could stem from the interaction of community and capital. >> it's not really so much about earning profit as much as, you know, showing your fellow community members, you know, this is what i got i'm going to keep holding on for
you guys, for the rest of my community. you saw a lot of that with gamestop >> social media and social interaction are a big part of why robin hood and reddit are so popular. for example, wall street bets on reddit is sky jb rocketing, including 10.7 million people. of course, journalists, as well. the propensity to gamble grows when everyone can see your stock pickings online. there is an upside finding others with similar interest and a rise in market participation, kelly. >> it's the blessing and the curse. you have a herd, but then, you know, you're encouraging each other. what about spax? i was reading about how this investment vehicle is leaving some newer, younger investors feeling burned. >> the credit goes to institutional investment for this story there was a piece about investors who lost millions on bill akman's spax. many didn't know what they were
buying into, but it didn't stop them from rushing into this new financial vehicle. a-rod, cierra, many are posting their own spax bill ackman fan pages. the sec lost the spax, and retail investors lost big. many wanted on the action, increasing risk by borrowing on margin or buying cheap, risky call options didn't always result in stellar returns returns. in this piece, one guy said trading stock options is as addictive as cocaine there is risk involved when you group a community like this. it's a matter of being aware of it. >> appreciate it gen-z may be hunting for growth stocks, but my guest says people should be be thing on va - betting. dan, welcome i don't know if you heard our earlier discussion with dave zerbos, concerned about the
economy's fragility, but you seem unconcerned going with the value trade that bets on growth, gdp growth, and a healthier expansion,right? >> that's right, kelly i think you have to look at the fact that they're not going to shut this economy down again with the delta variant, various things that are going to maybe slow some of the re-entry and re-entry trade and the restart, they're not going to shut it down there's so much liquidity that's in this market right now we have to realize the fed injected $4 trillion over the last year and a half even if they do nothing else, there's going to be another $1 trillion of liquidity that's going to come into this market so the fact is, if they start to taper to some degree, that's a very positive sign i mean, they're really telling us that they see that the economy is not going to take a major reversal it is going to continue to grow. it may be at a slower rate, but that's going to be something that will show they're looking forward. they're seeing even some tapering, not taking money off the table.
they just would slightly slow some of the buying they would see, you know, the economy is going to grow, and it'll be goodfor earnings and growth it is all going to vie in favor of closing the gap again between value and growth. >> maybe the way to play it, even your own strategy, is more about stock picking than it is about doing the factors or styles or value and growth for investors, it's sort of like you can be right for the right reasons or right for any reasons. often, if you stick with the right stocks, you can navigate through these times, whether they do pursue the taper, whether they have to throw the plan in the trash can chevron, general electric, you think investors can own it no matter the climate? >> i think so. it is picking individual stocks as this market really starts to, you know, probably starts to mitigate with regards to its overall growth expansion is tough one of the things we like about bristol-myers. it is clearly the best value in
the health care space. it is trading at an 8 pe you get a strong almost 3% dividend while you wait. we think it is radically undervalued from the standpoint that people are worried about patent expiration on the back end, which is true and it's a important. what they're dramatically underestimating is the eight new drugs coming online are going to generate $20 billion, we feel, in new business. that's double what the street is expecting. that's strong. when you look at, again, a chevron, i mean, this is a company that has one of the purest plays to the commodity which continues to advance driving miles are back up to what they were pre-pandemic. airlines off a little bit but only marginally. you're looking at a stock that has the best lev ranerage and se of the highest margins, no royalties in the basin you have 5.2% while you wait at a 14 pe. so these are companies that, in their own right, standalone as
very strong values for people to get some nice appreciation. >> you say even ge you like what culp is doing. few companies are poised to see such strong profit growth in the next few years hope dan, we appreciate it. thank you. >> you bet. >> dan gentry. coming up, retail earnings are the best they've ever been are we in for a nasty holiday surprise, the way covid is shutting parts of china down again? we'll explore that. only shares are hanging on to a small gain. actually, they've gone negative on the session mixed quarterly results, but they're forecasting a big revenue surge for the year we'll talk about the latest at the oat company in a bit stay with us
welcome back to "the exchange." markets are all affected by the major developments of the day, whether it is afghanistan, the taper talk we've been hearing from the fed as it relates to reporting from our steve leesman at the "wall street journal. take a look. a week after it moved 44 points for the week, we're in a pretty cl placid situation with the dow down ten, s&p down eight, and nasdaq down two-thirds of 1%, that's where the major action is in moves of the movers, material stocks are lower nucor and albemarle, cf industries leading the declines again, these are a lot of materials names key to the global economy, as well. a couple different things to keep in mind semiconductors are doing better. n vid i can't down
a. amd down about 3%. china down 4%. jd.com, baidu, allibaba. china's shopping growth slowed to 4% in july. last month's figure is far below the average of 21% growth for chinese ecommerce for the past five years for more on what it means for china and the world's economy, head to cnbc.com let's get our news update. hi, kelly. hello, everyone. this is your news update at this hour satellite images show the thousands of people at the kabul airport seeking to escape afghanistan. forces are working to clear the airport so evacuation flights can resume haiti, survivors near the epicenter of the massive earthquake are finding shelter in makeshift tents on a soccer field. rescue efforts continue around the region as the death toll remains slightly less than 1 1,300. tropical storm grace expected to
hit haiti tonight with up to 15 inches of rain in some areas. on thenews, desperate efforts to find survivors in hay t haiti and getting ready for another tropical storm georgia's new voting law is said to impose voting restrictions that discriminate against millions of people, especially people of color in new york city, proof of vaccination will be needed to dine indoors, go to a gym, or attend an indoor performance mayor de blasio announcing the rules go into effect tomorrow but enforcement won't begin until september 13th kelly, as you know, it is creating a bit of confusion and perhaps a bit of controversy. >> oh, yeah. >> some of the restaurant owners. >> for sure. thank you. we appreciate it still ahead, uk prime minister boris johnson announcing his intention to hold a g7 meeting on afghanistan. with the u.s. facing harsh criticism over the troop
withdrawal, the fallout for america on the global stage is next on "thexcng ehae. what happens if you ever need to miss work for a long period of time? why would i miss work? i don't know. you could sprain your ankle, throw out your back... get hit by a school bus. or a regular bus. get kicked by a horse. fall off a ladder. bathtub mishap. polio. boating accident. stuck by a fork. rabies. wolves. scurvy. talk to us about disability income insurance today.
dow down 4 points. nasdaq down 94 even though we saw some big losses this morning with futures down as much as 170 points, we have recouped that and we'll keep an eye on it. we have to navigate the biden press conference around 3:45 p.m. that will begin before the market close there is an intraday chart of the dow. steady march upward. strong demand, low inventory sounds great for retailers but it could be derailed ahead of the key back to school season. what about the holidays? we're going to tell you what to listen for in the earnings reports that are coming out this week, next right here on "e chge."th from our entire line of vehicles at the lexus golden opportunity sales event. lease the 2021 is 300 for $379 a month for 36 months. experience amazing at your lexus dealer. if your money is working toward the same goals, why keep it in different places? sofi is a one-stop shop for your finances designed to work better together. spend with sofi and get cash back rewards that automatically go toward your goals.
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growing up in a little red house, on the edge of a forest in norway, there were three things my family encouraged: kindness, honesty and hard work. over time, i've come to add a fourth: be curious. be curious about the world around us, and then go. go with an open heart and you will find inspiration anew. viking. exploring the world in comfort. welcome back president biden is set to speak about two hours from now about the deadly crisis in afghanistan. these will be his first public remarks in about a week. the decision to withdrawal u.s. troops sending the country into free fall, as the taliban has taken control of the government. it captured kabul yesterday. we've all been seeing these dramatic images of locals
chasing down departing planes. critics warn american adversaries like kchina stand to benefit, where china already says they'll found friendship with the taliban joining me is president of eurasia group. ian, good to have you. boris johnson announcing he wants the g-7 to meet virtually in the coming days what are they possibly going to do >> well, it is a little late for that i mean, part of the issue here is so little coordination between the united states and the allies that we've been fighting side by side with for 20 years now the decision to withdraw was made unilaterally by the biden administration the time jline as well as coordinating humanitarian aid, refugees, dealing with the planning for the evacuation. i mean, actually, the united states ambassador, acting ambassador, fled the country this weekend british ambassador is still there, trying to help refs get
out. there is the absence of coordination the united states under the trump administration, there was a lot of the u.s. is unilateral, america first. the europeans really didn't expect that under biden. they're quite angry about it you heard the uk defense minister coming out yesterday with really choice words in how they felt like there was not coordination with the americans. >> so there's so many different questions. i want to throw in here, as well, this news that we have the publisher of the "washington post" pleading with the white house to help remove 200 journalists and related people out of the kabul airport at afghanistan and back home to the u.s. actually, the head of the afghanistan central bank has been on twitter sharing his own story where he was caught totally off-guard by the developments, tried to make it out in an aircraft himself and couldn't this was all as they're watching the elites and politics flee on private jets okay, let's roll back the clock five days. what should have happened?
>> well, i have to say, first of all, i understand andbasely al -- basically aligned with ending the american presence in afghanistan. republicans and democrats were all aligned pretty much. how to do it is a different story. five days ago, the biden administration still believed the afghan defense forces that the united states has spent some $88 billion training over the last 20 years would be able to continue to fight against the taliban while the americans were withdrawing. not just our system but those who supported the united states over the course of the last decade plus, and that the taliban would have targeted. that was completely wrong. not only was the intelligence failure there, but also there
was really no planning for what if we're wrong i mean, this was a combination of bad intelligence and hope you've watched that fall apart whether you're a biden supporter or a biden detractor, it's impossible not to recognize the failure of execution on foreign policy that is truly staggering. i mean, beyond that of anything i have seen from a u.s. administration since the beginning of this war. >> although, you know, there's plenty of blame to go around. >> yes. >> if we're kind of rewinding the clock. to think back to the fact that the original taliban regime fell a couple months after the 9/11 ray tacks. afghanistan had democratic elections by 2014. the situation was stabilizing in the ensuing decade there wasn't any attack like 9/ 9/11 now, we're all witness to what happens after this the president is speaking in two hours' time. should this be a primetime message?
>> it's good that he is doing this today earlier today, they were talking about in the coming days, and i think they were losing control of messaging really, really fast biden not being in the white house, talking on national security by zoom and not having his key advisers there with him personally is not the right message. so it is good that he is doing that i mean, the basics of the message will be pretty clear in the sense that biden has argued, and i think correctly, that the status quo he was handed when he took over his president was not sustainable. there was already a significant drawdown of u.s. troops, and the taliban had gotten significantly stronger the assessment internally by the biden administration was that you couldn't maintain that status quo you would lose to the taliban over the course of his administration so you had to either increase forces, which no one wanted to
do in the biden administration it would have been unpopular in the u.s. or you needed to leave so i think he'll make that point, and he'll make that point strongly you saw that in his statement over the weekend. >> yeah. >> but he has to take responsibility for the failures on the ground. the coordination failure, the intelligence failure, the planning failure, the communications failure we need to see how much of that he does and what the leadership of the united states will look like going forward this is a true crisis for him right now. >> you know, you say it is a true crisis, but the interesting thing about this is that as much of a debacle as it is, those who still supported the u.s. leaving afghanistan are often pointing to this as evidence as to why there was no sustainable way for the u.s. presence to stay. so in a curious way, it is almost as if the rest of the world is seizing this opportunity to kind of point to, you know, america's, you know, inability to lead on this key issue, while the americans themselves, you know, by and large, leaving afghanistan up
until a couple days ago remained a very popular policy. >> it is, by the way i want to be clear that i think the impact this is going to have for u.s. relations with allies is greater than it will have for biden domestically right now having said that, let's be clear that the situation on the ground in afghanistan is very fluid there are a lot of american citizens that are still there. and so, i mean, if you ask me, if they're able to get through this with no americans getting killed on the ground, then i think you still get your $3.5 trillion in infrastructure done, and i don't think a lot of people are voting on the basis of afghanistan policy come n midterms or 20214 elections. on the other hand, if this becomes a hostage situation, if there are fire fights, american journalists, other citizens on the ground that are captured, killed by the taliban, this becomes an ongoing headline for
weeks or months, this destroys biden's presidency and i don't think there is a 50/50 chance of that happening, but it's not 1%. it's a real possibility. that never should have been plausible. so i just want to be clear that talking to you right now, i wish i could respond as confidently to your question as i would like to, as you would like me to. >> no, and it's a good point, that this is not history right now. we're all waiting to see, for the next several days, what happens. you know, the reporting is that top level u.s. officials have met face-to-face with the taliban, more or less npleading to let journalists and others out. of course, the chinese are already seizing on this as mockery. ian, thanks. we appreciate it we'll leave it right there we'll hear from the president himself very soon. ian bremmer with the eurasia group with the latest on afghanistan. crypto market topped $2 trillion for the first time in three months as bitcoin rallies. we'll get a check on the health
of the space in a moment the dow briefly turned positive. amazing for all we are discussing markets shaking it off we have home depot, merck all trying to move to the upside you can catch this show by following the chgeodstexan pca we're back in a moment but if you're a kid with diabetes, it's more. it's the simple act of enjoying time with friends, knowing you understand your glucose levels. ♪♪
welcome back to "the exchange." busy week for retail earnings. target, walmart, lowe's, and home depot, some of the names we'll be hearing from. while they'll been enjoying a golden moment, there's questions about the rest of the year bob pisani joins us with more. hi, bob. >> hello, kelly. this is a golden moment for the retailers. consider this. the consumer is flush with cash. higher costs are being mostly passed on. demand is high supply is low. inventories are low. there's very little on sale. delta variant is the problem here delta variant is the wild card retailers are holding on to gains made earlier in the year on the narrative the economy is going to keep opening up but the delta variant means consumer behavior could change quickly. the key test now is back to school that's what everyone is watching strong back to school showing usually is good for retailers, and it usually implies good
holiday sales. apparel and department stores have held on to gains from earlier in the year. a lot of this is sideways, but the variant has some doubt on the theory for example, is everybody refreshing the wardrobe for back to school? everyone going back to social activities delta made everyone less certain about work plans and social plans alike. here's the bottom line there was a lot of apt michl in the -- optimism in the first quarter from the retail ceos the comments will likely be tempered with a more cautious tone as companies tie to the reopening. the clothing, department, beauty stores hedge bets around the delta variant. interesting to hear what they have to say. >> thank you, bob. the total value of the crypto market topping $2 trillion for the first time in nearly three months. bitcoin continues its rally. since dipping below 30k on july 20th, it's surged 50%.
topped $48,000 for the first time this weekend before pulling back somewhat. it is off the all-time high of 64,000 and change. what is driving the moves? chief content aufofficer at coi desk, michael casey. >> hi, kelly. >> obvious question, even the specialists, let's call them, in the bitcoin community, there are high-profile bears and people saying, you know, this is sort of a dead cap bounce, what accounts for the rebound we're experiencing >> i think the whole host of factors. you know, it is actually something of a return to the narrative that we were seeing earlier in the year. i don't think we're seeing anywhere near the same level of institutional interest we were talking about back then. last time i was on the show, actually we are seeing evidence that bigger players are entering the market, right? this is, i think, in some respects, driven around the broad narrative that there is a lot of uncertainty in the world. the direction of -- you were just talking with bob pisani
about, you know, what is the outlook for the delta variant? these things, i think, feed back into this ongoing concern of uncertainty around monetary polity, expectation the fed is going to keep going. all is supportive of bitcoin for various reasons. for those reasons, as well, family offices and a whole host of other institutions are -- we're seeing big err wh transactions come through which is a sign that these bigger players are there. and then there's just like -- a lot of what we call fudd in this entry, the fear and uncertainty, is actually being mitigated a little bit like you know, the chinese news, the concerns around elon musk badmouthing it, all these things that's died down a bit we're removing some of those headwinds. and you know, a chance it will be able to accumulate. >> so also we've had this infrastructure bill with this amendment that would possibly classify basically coders as brokers or what have you for crypto purposes. is that language still in there? do you think it's going to get past at this point
are people coming to terms with it >> i just read a column last week saying one of these rare occasions when a loss is actually a victory for the crypto industry. because you know the story one single senator, an 87-year-old man with an interest in something, defense building, blocked a reasonable amendment to that law that would have removed some of that ambiguity and really ultimately unenforceable language that's in there in a way that really underscored 99 senators were on board with this. the 1 percenters, the image that held us back here. it was a show of support i think for how much clout the crypto industry has, how relevant it now is in this space as it goes to the house, yes, there will be yet another battle through this but look, this language i think will ultimately have to get corrected. everybody seems to understand and recognize that it was flawed and i think that fact that that recognition is there is probably most important thing yet another thing that helps underscore the positive factor one other thing i forgot to
mention. ethereum has done really quite well and there's been this significant london hard fork upgrade. now in the parlance of what they use in this space, they're burning tokens as part of the actual issuance function and how miners are awarded and that actually creates a scarcity function which starts to look a little bit more like bitcoin. there is now a supply function that looks more deflationary all that supports crypto at the same time it supports ether. the same time that nfts and defi, the sort of surge of activity in nfts is just driving more and more activity through those protocols. >> no, it is and we talked a little bit about the lull in nft volumes earlier in late spring but those numbers have really picked up again. i sort of see what's happening with the bitcoin space et ethereum, nfts what the heck is litecoin? >> litecoin was considered the
silver to bitcoin's gold it was -- you could have it as an alternative you could have a few different functionalities that made it a little more appealing. at the end of the day, though, it really is -- it's just another coin it doesn't have -- i don't think it has quite the same community as dogecoin around it. but it's a bitcoin hard fork >> we had jack mallers on last week from strike and he's throwing some shade at coindesk for having for example dogecoin on its platform. you know, the industry is maturing, let's call it, and there are some that are emerging as these legitimate institutional investors backing and that kind of thing and others that feel it could fall by the wayside do you think that's right or no? do you think the rising tide will continue to lift all boats? >> no doubt there will have to be some consolidation here we're constantly barraged. as people writing about this space with crazy pictures all the time
bots that are pitching this or that new coin with an offensive name in it and so forth. but i think the dogecoin phenomenon is worth looking at for what it represents in terms of the community aspect of it. clearly if you have a believer there's only going to be one dominant cryptocurrency you're going to laugh dogecoin out of here but we're interested in covering the phenomenon we are journalists, we cover whatever is going on and dogecoin is an interesting phenomenon for what it says about the market, the social media phenomenon behind it and all of that. and money is about community ultimately, right? it's how people come together and agree on the same medium of exchange and if there is a mechanism by which you build community around it it's certainly worth reporting on i don't know that i would sort of recommend anybody necessarily buy it but -- >> put your life savings in it >> well, mallers was just talking about coinbase, just to clarify. but it is a great point whether it's dogecoin or lite or otherwise. it's good to see you
>> you as well thanks for having me >> michael casey, former colleague at the "wall street journal," now of coindesk. this earning season has given oat milk loving starbucks customers two reasons to celebrate. after they experienced shortages over theast pfew months the latest on oatly is right after this this isn't just a walk up the stairs. when you have an irregular heartbeat, it's more. it's dignity. the freedom to go where you want, knowing your doctor can watch over your heart. ♪♪
welcome back shares of oatly are higher today. they've pared those gains. i think they were negative a minute ago a dip happened in just the past hour, down .4 of 1% now. all this after posting a bigger than expected second quarter loss and missing on revenue. but kate rogers joins me with more on what's behind these moves. kate >> reporter: hey, kelly. this morning's move higher seemed to be all about capacity. the company said it was able to overcome both covid and manufacturing-related headwinds during the quarter in its first report since going public. its supply chain, though, was impacted earlier in the quarter for major partners like starbucks in recent months the company says june and july, though, were its strongest consecutive production months in its history. oatly announced this morning
also an increase in its oat base capacity in the americas at its utah facility to support an increase in consumer demand. it'll also open a facility in fort worth, texas in 2023. this combined with its emia manufacturing facility and two in asia will create a 200% increase in its production outbut the pi the end of 2022 compared to the end of 2020. the company also noting it has experienced freight cost increases due to the pandemic and it also added its localization of production to may help to curb some of those costs. it's also guiding full year revenue to exceed $690 million that is slightly higher than anticipated. oatly of course facing accusations last month from short seller spruce point capital that it misled investors in its prospectus and argues the company will never achieve profit profitability. it also accused oatly of greenwashing or overstating its green yesterday entials.
oatly rejected those accusations at the time and underscored the stance today >> spruce point also says sunopta is going to vie it w. it for oat milk creation. i think oatly shares were down on that last week. >> yeah, that's right. and oatly's ceo today underscored that oatly is still the exclusive partner for starbucks. i think that other company was just making up for some of the shortfall in the period there but that moving ahead they are the exclusive partner once again for starbucks. >> i think it was sunopta. kate rogers. that does it for "the exchange," everybody. but "power lunch" starts right now. and kelly, thank you very much welcome, everybody, to "power lunch. here's what's ahead this hour. a september to remember. the fed may be moving up its taper timeline possibly to next month. can the central bank avoid a taper tantrum? and which stocks could benefit from this major market shift and inflation nation we kick off a week-long series looking at how different sectors
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