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tv   Closing Bell  CNBC  September 24, 2021 3:00pm-5:00pm EDT

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people went and bought toilet paper. i wanted to see if it was. lo and behold toilet paper about ten bags left there and bottled water running low. >> the people hoard the bottled water. >> they had my chicken salad. >> good supply right there. >> dom, thank you. >> whitefish salad is great. >> everything there is great. >> salmon. >> "closing bell" starts right now. we are going to costco. >> welcome to "closing bell," everyone i'm wilfred frost at new york stock exchange the major averages trading in a tighter range to finish a volatile week but the move in the treasury market getting attention. yields higher again. >> i'm courtney reagan in for sara eisen treasury yields are popping again together with the 10-year up to 1.426%
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tech underperforms energy stocks get a bid. the energy sector up 5% on the week and crypto is crushed as china ramps up the crack down on the space. all deep into the red. we have 59 minutes left to go in the wild trading week. coming up on today's show carnival near the top of the s&p 500 after results this morning and a positive outlook arnold donald will join us and the rapid rise in treasure yields and whether that will continue and then dan niles on the wild trading let's focus in on the big story that is we are watching today. meek santelli is tracking the market action for us and joining us to talk about the crack down is bradley tusk. what are you watching today
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wrapping up as wilfred referred to a wild week >> this is the day where stability and flat indexes are the news because we did have another little mini shock culminated monday afternoon. 3% rally from that monday low and another what looks like a "v" on the chart but where it stopped is a consequential start. however, certainly had enough of an oversold kind of adjustment in that low on monday to get this good bounce i want to remind people what it looked like last september 10% correction we got a 9% rally off of that. we did roll over again we don't know if this is the recovery back to the highs industrials versus software. this is a good toggle to watch for what the reaction and the
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unfluns of bonds yields are because that's dictating the rotation right here this low in software which is also when industrials are ramping when bond yields ran above 1.7% and then in may and software is recovering and industrials flattening out this is the seesaw to ride for a while and bond yields, treasuries up basically at the highs of july 1st and maybe dictates the action here finally seen the upturn in the citi surprise economic index plunging negative for a few weeks. when it turns like this this is turning up from normal lows and tends to happen with a boost for cyclicals and the two peaks were the peaks in sill call relative performance and offsetting
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currents that are driving things together. >> don't mean to put you on the spot but i know you the answer to this. i think i can remember in third quarter or maybe early fourth quarter with news from china that rattled the markets but not really enough to sort of break us from an uptrend and usually happens with fed action. is that right looking at the week this week with both of those news events moving the market >> definitely been a pattern in recent years i can go back to let's say 2015 with a little bit of a china related shock august to september. did rally through the fourth quarter and failed there you also had the fed raising rates in december of 2015. it's hard to know whether the market is essentially absorbing and using the things as a way to get battle tested or trip over into more pronounced weakness.
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look at the earnings reactions nike, fedex suggest we with respect fully prepared for the influences this quarter. >> thank you so much s&p just positive and up for half a percent for the week china intensifying the crack down on crypto calling the activities illegal bitcoin and ether tumbling on the news with coinbase and robinhood. bitcoin down 5.5%. let's bring in bradley tusk who's also an early investor in coinbase but no longer an investor thank you for joining us. >> sure. >> to what level is this crack down clamp down expected bitcoin is not that much down. >> right the actual declean, i was thinking that, too not really that bad. so look. i wasn't expecting china to wake
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up and say no more crypto but if you follow what china is doing for at least last six months with tech they have been consolidating power and if you think about what crypto is, it is a sovereignless currency meant to supercede and if anyone is afraid of the power and vacuum that could cause is china. >> interestingly, bradley, china is not a perfect example but you have one country like el salvador kind of against the dollar's dominance that embraces crypto and another that's also against the dollar's dominance that is banning it i guess that the difference is that china wants its own currency to gain traction but there's a dichotomy there. >> yeah. obviously two countries and two
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different places in life but el salvador looking for something to have more economic stability, get things going, give people confidence in a currency they use and in china looking at the u.s. and seeing people like elon musk or jeff bezos or mark zuckerberg who are wealthy and power powerful don't and don't want them to emerge their question is, are we enabling anyone to ultimately challenge our power? they concluded yes and that has to me speaks for the different currencies. >> what disoes this mean for investors in bitcoin is it too risky for the average person or the average fund to hold in a portfolio? or is it too risky not to hold
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it if this is the future epa right now we look back and say early days we didn't know anything then i wish we could have held it >> i'm a believer personally but what you have to understand is this is sort of the volatile thing. you have very little fundamentals that really determine the price. governments that could follow china's lead ban it any given moment so yeah you could still make the case that a couple years bitcoin will go from 42,000 or whatever it is to 500,000 and people believe that but today should be another reminder that like if just because bitcoin sounds cool and fun it's a very complicated asset class and should be investing in it if you are prepared to handle the volatility. >> wanted to ask you about the latest challenge that facebook is facing which of course
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focuses on a report that suggests it's a platform that's harmful to teens is that breaking news? is it significant weight behind it do you think it will damage the company ultimately >> it is not breaking in that i have a 15-year-old daughter. any parent of a teenage girl knows that instagram in many ways is very destructive platform and little stuck. if you make them drop it then they can't talk to their friends. if they keep it the harms occur. so it's not new news but i think it is what we see over and over again that facebook lost the trust of the public completely. the media and the government doesn't trust them i think they have to make a major pivot to say that the way that we handle it today with control of everything and everything is fine probably was not accurate genuinely sorry. will work with the government to
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figure out what rules should be around privacy, t telecommunications how we handle political advertising messages facebook hasinsisted so long that black is white and white is black and everything is fine that i'm not sure another report -- they don't have the credibility to undermine at this point but nonetheless it's just hardening the views. >> opens up the questions for parents to make choices for themselves thank you. >> thank you. the director of the cdc against her own agency's recommend daises on who should get booster shots. we'll speak with dr. scott gottlieb about the growing confusion next you are watching "closing bell" on cnbc.
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president biden making another plea to americans to get vaccinated saying the unvaccinated are costing us and putting the economy at risk. it is a somewhat confusing week on the booster front cdc director this morning endorsed boosters for those over 65 and with underlying medical conditions and cited with the fda and against a cdc panel for those recommending a booster in those on a high risk job joining us is dr. scott gottlieb
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and his new book is available now. i guess the question is, what's if right answer? where do you stand on the recommendations? who should be getting these booster shots? >> i think there's clear evidence for people over 16. you can make an argument for over 50 there's declining efficacy over time from the israeli data set seeing rising incidents of greater infection and some evidence pointing to severe infections in that population and clear evidence that they can be benefits from boosters. where public health officials are split is below age of 50 generally agreement people at risk of covid with underlying health conditions can benefit from boosters and the question the director weighed in is people younger and healthier but at significant risk because of occupations. the cdc director decision was a
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repudiation from the advisory committee. the committee was split on the question vote 6-9 and the dialogue split and the director gets a vote and aligned with where the fda came out in terms of offering broader eligibility for boosters for occupational exposure. where the cdc came out is with a frame work that's easier to implement and maintain an eye to what can be implemented and with overly complex regimen it will create obstacles to access >> i guess when you look at the science and the data and if it shows that immunity wanes over time doesn't it wane for 30-year-olds like for
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65-year-olds are there not enough vaccines for anyone that wants one to get a booster? >> i don't think there's a question of supply a lot of public health officials want to see the evidence that's translating into worsening health outcomes. you could postulate that the immunity is declining in an older population and won't see the pronounced decline and the immunity even if there's a decline across the age the residual immunity to maintain is more protective value than in an older individual and that's why there's debate around the question the challenge is that you have two agencies, fda and cdc, with distinct mandates and that's why you see this divergence. it is often the case that fda
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will have a broader authorization around vaccines and cdc will narrow it the role is in providing for recommendations and the childhood immunization schedule and you want it to be a dlib rattive arguably slow process. if we mandate a vaccine for children you want it to be deliberative a process that's designed to have divergence with the nature of the structure of the process super imposing that process on trying to make recommend daises around a vaccine in a pandemic providing for adult vaccinations that are discretionary may not be the best process for that we may have been better to design a different approach and having a seamless process rather than this disjointed approach with fda and cdc with different
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verdicts especially to inspire public motivation that's going to get exploited by people that want to sow doubt. >> the good news, the best headline from you this week which we saw in the daily mail online because i guess you're tracked by them as a big celebrity and the headline said you feel delta will be the peak and past the worst of this. >> i think delta will be the last major surge of infection at least in the united states barring another mutation on the back end of this delta wave and it's not done sweeping the united states. that's driven by sharp declines in the south leading the epidemic in the united states. you see the midwest cases and the northeast didn't have the delta wave yet
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we may escape it i'm skeptical but on the back end of the wave prevalence levels will decline and expect something on 20 to 30 cases per 100,000 people a day and not the raging infection in the out is at 120 of 100,000 a day on the peak and not the period of june and july down to about 5 cases per 100,000 per day and not another major wave of infection. if we have more variants which we will there's 20 variations of delta and any variants likely to escape the immunity but we can re-engineer the vaccines if we do there's a good chance to use the delta variant as the backbone for future vaccines and could afford higher degree of
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protection against any varniant that comes along. >> thank you. >> thank you. still to come here on "closing bell" the nasdaq could turn in a positive week after the wild moves since monday. we'll ask dan niles about the volatility plus yesterday on this show we asked the ceo of u.p.s. how long supply chain issues could last. >> i'm afraid this is going to last for a while these issues have been a long time in coming and tacks us working together to clear the blockages. >> we'll explain in dollar terms how those supply chain issues could hit consumers in the wallets.
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♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪
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christmas! three months away. but many retailers are urging consumers to start shopping early. might be the message every year but this time not to grab the
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early sales. shortages will be real and prices higher from the congestion in the global supply chain. courtney probably the only person at cnbc that loves christmas more than i do and got a breakdown of the examples that we could be looking at. >> i wore christmas tree guillen in case we did this story today. you might have noticed emptier shelves and demand is expected to gt worse. there's a shoe example for cnbc to explain why it takes 78% longer for a shanghai-made shoe to get to the store and why utd costs 36% more now than before the pandemic pre-pandemic took about one to two days to process the shoes at the port shanghai and now seven to 16 day just the cost out container is up 300% or more. to make up the lost time ocean
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transit is sped up from 11 to 14 days and that was from 10 to 12 days but that adds $1. 7 to the transportation cost for the pair of shoes once the shoes ariver at the port of l.a. it is dwelling five days to unload two times normal so that is now taking eight to 14 days and that's up 2 to 5 days pre-pandemic the shoes are transported over a short distance up to four days answer costing 8 cents more than before the pandemic to do that same thing our shoes are moved but truck to a distribution center or store now two to six days and adding 46 cents more. getting the shoes to a store or a distribution center takes 22
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to 58 diaws that have 17 to 28 days and then the total cost is $8.32 instead of $6.13 so you can imagine what then the further mark-up is paying the retail price >> it's crazy. the incremental costs are staggering and great, very insightful break down. thank you. >> thank you. carnival ceo arnold donald breaks down the earnings report and seeing in terms of cruise demand. plus double line's jeff sherman will join us speaking of yields, a check in on bonds today up to about 1.46 on the 10-year. significant move higher in the last couple of days.
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let's check the individual market movers. wells fargo downgrading ro cue saying expectations for revenue growth are too high after an upgrade yesterday to buy shares are down about 4%. jeffries upgrading cheesecake factory and dave & buster's stocks up 4% each, court. it is time for a news update with frank holland >> hi there.
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here's what's happening. three cdc sturdies find school districts with mask mandates more likely to have an outbreak. a report on arizona schools said the outbreak tripled for consumes that didn't require face coverings in tennessee the order to opt out of mandates is put on hold by a sec federal judge. two districts will be allowed to continue the mask mandates while the cases move through the courts. prosecutors say r. kelly is a sexual predator. defense attorneys say he is the victim of a false okay saixs. united airlines fined by $2 million. the department of transportation said it is the largest fine of its kind covering 25 flights over 5 years that impacted 3200 passengers that's the latest. back to you. >> thank you so much. we have got 27 minutes or
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so left. here's where we stand. just higher on the dow the s&p just gained ground in the last 20 minutes and higher by 0.2%. nasdaq is flat. doubleline's deputy chief investment officer jeffrey sherman will weigh in and why there should be sensitivity of portfolios and carnival seeing bookings for second half of 2022 ahead of pre-pandemic levels we'll talk to the ceo later in the show 'cause you're only a man ♪ ♪ and a man's gotta learn to take it ♪ ♪ try to believe though the going gets rough ♪ ♪ that you gotta hang tough to make it ♪ ♪ you're the best! around! ♪ ♪ nothing's gonna ever keep you down ♪ [triumphantly yells] ♪ you're the best! around! ♪ [ding]
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flexshares etfs are built with advanced modeling. to fill portfolio gaps and target specific goals. strengthening client confidence in you. before investing consider the fund's investment objectives, risks, charges and expenses. go to for a prospectus containing this information. read it carefully. at usaa, we've been called too exclusive. because we only serve those who honorably served. all ranks, all branches, and their families. are we still exclusive? absolutely. and that's exactly why you should join. welcome back yields rising this week. 10-year back near levels not
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seen in three months this as the fed updated the policy saying it may be pulling back on monthly bond buying. for more let's bring in jeffrey sherman. great to see you interesting that this move came over the last 36 hours and not tuesday, wednesday in the fed meeting. is the driving force the bank of england and not the fed? >> i think it's the fed. when you think about what chairman powell said he kind of let the cat out of the bag and he has this propensity to do so if you look back to autopilot and that was a very quick reaction to the bond market and people realize once they die jersed the fed is the rapid pace to which the fed expects to get out of their bond purchasing is what i think caught the bond
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market by surprise and took time to suggest and he said that he expects to be done by mid-2022 and so if you think about the pace with which the last tapering was done it was ten months or so, so they're likely to announce in november but tal talking six to eighth months and reducing monthly the purchases at the surface that doesn't sound like a lot like but if you think about who's the buyer in the market it's the fed. that's a large discrepancy and not shocking to see here we are. back to the levels of the second quarter. >> assuming that is how it all plays out and we don't need to see or actually see a rate hike until 2023, where do you expect
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long yields to be by the end of that tapering process mid or third quarter of next year >> you're at a critical level today. here's the long bond at 1. 99. we haven't seen 2% for a period of time now and so it's brief at these levels but the 10-year is breaking out of the range. 1.38 is something we couldn't breach for about three months. but ultimately thinking about where bond yields should be they should probably be 100 basis points higher at least so thinking about the 10-year the models internally at doubleline based on the fundamentals with nominal gdp and where the real yield environment should be today, it signals between like a 2.50 to a 3% 10-year
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there's depression with the fed buying and i think you see if you lock at the signals from the front end of the curve is a five-year rate and then people think about the fed's willingness to move rates up and think about the last two speeches chairman powell gave you. he's telling you they have achieved the inflation mandate and not out there professing transitory inflation and continues to rely on the labor market as a reason to keep rates lower and continue bond buying but changing the dynamic and it is time for the fed to move on and see the rest of the mark likes a reprice. >> that goes to the question that i was going to ask you as you look at inflation maybe it is transitory and maybe not. do you think rates are too low >> i think rates are way too low and if you asked many
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strategists, even ourselves that you were going to see a five handle cpi print this year where would the 10-year people would have said 3.46 so the transitory nature, there's pieces of cpi will will be transitory and seen this in airline prices you are seeing it in like hotel assets but continuing to see pressure this used cars. it may not continue to accelerate is that transitory further than that is you haven't seen pressure from wages i don't see wage pressure and labor start to gain an upward hand here. this is likely to put pressure on inflation and i'd be reticent
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if we haven't talked about the housing market when you look at the ownership and the price but look at represents now coming in at high single digit gains year over year but look at the cpo component and see equivalent rent is calculated like 2.5% so there's a big disconnect and what that means is as policy stays where it is at it has upward pressure on cpi so i think that you're going to see a higher level of plinflati for 12 to 24 months. we think you see a mid 3% hype of cpi and that says that bond yields are way too low in today's environment. >> thank you very much for
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joining us thank you. >> thank you nike sings after cutting the guidance those orsties and more next in "the market zone." you sure you want to leave that all behind? yeah. stay restless with the rx. crafted by lexus. experience amazing at your lexus dealer. in 2016, i was working at the amazon warehouse when my brother passed away. and a couple of years later, my mother passed away. after taking care of them, i knew that i really wanted to become a nurse. amazon helped me with training and tuition. today, i'm a medical assistant and i'm studying to become a registered nurse. in filipino: you'll always be in my heart.
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well shannon, the broader markets, the stocks muted despite monday's big drop. the s&p is on track to snap a two-week losing streak we are higher by 0.3 prts on the s&p and 0.7 on the week. mike, nice intraday recovery today and an intraweek recovery. >> for sure. a takeaway was going into monday's low and we have talked about this but many parts of the mark on a deep slide before that with hindsight it's clear that that was in a very short term a culmination with that concentrated attention on the evergrande issue credit markets didn't break or really bend on the news so you have the makings for another point on the chart looking like a mini scare, went down 5%
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intraday is this yet another recovery to an all-time high could be the market tends to surprise to the upside this year and aware that we are still in this seasonal period and sounds like on the one hand, on the other hand you can respect the action and say the market took advantage of the slightly oversold condition. >> shannon, what do you hear of what we are hearing out of china not just on today on cryptocurrency exchanges but do you think the markets are just getting used to this this is just a more closed off china and shrugging it off >> i actually think the markets are a bit hesitant to actually believe that we're at this inflection point with chinese policy if you look at what's happening
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next year and the things on the horizon for china we need to be careful that this could be a longer term push into the congress next year, that could indicate that there is a different sheriff in town if you will from the chinese communist party and what investors are doing is looking at it in terms of will this actually slow the economic growth that we have experienced this year and anticipate into next year? is this something to insulate the portfolios against and even if we wanted to where else are we going there's a bit of complacency relates to some of the additional crack downs that could on certain industries and again we are not getting transparency, we never do but it feels -- i think there is a level of anxiety amongst those that have invested in emerging
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markets in particular that we are not sure what's next and i don't know that's fully priced in to the potential catalyst for downside move over three months. >> fair. shares of nike slammed today following the earn last nigh missed on revenue and cut the guidance due to covid in the factories and there's the ten weeks of production lost in vietnam since mid-july and phased reopenings in november and elevated transit times i know this was a disappointment to investors that look at nike as a strong company often able to overcome the challenges this time maybe they have to deal with what everybody is and asks me if nike is oversold here isn't this the first of beginning of the company's commentaries to deal with the
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same issues? >> i do think that it looked as if the stock had backed off a fair bit and now reached huge heights in valuation i think that's an issue here nike with a very small group of other consumer favorites given a superpremium i don't think this is an abandon. of the nike story. clearly the most analysts out defending it today but the idea that nike's not immune and had many times in the past of the vague china or asia related pr production issues and it's been given too much credit for being us lated. >> aside from the nike stock price move factoring in the comments from dhl and u.p.s.,
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does it suggest the fed is behind the curve and might get a surprise when they have to tighten more than the market expected >> i think that there's evidence that we could see this -- parts of the inflation story be more persistent than transz fire. i think from an investor perspective this is an opportunity to understand the companies that should be afforded a premium for execution and those that continue to mitigate the impact of higher costs or pass them through to the consumer a thing that could happen is that we could see a softer cycle of consumer demand in china and that could spread globally to help us insulate a bit from the inflation factors but there's a situation whereby the fed has to get a bit more aggressive and that certainly would be
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disruptive for equity and fixed income investors in the seconds half of 2022. >> china ratcheting up the crack down on crypto today calling the activities illegal bitcoin selling off on the news. ether also falling today down by about 8% both off the session lows. we discussed this earlier. you might have expected a much bigger move. we have been expecting the reaction like this from china but the potential risk that other governments the follow suit or impose strict regulation to only fall 6% is a relative win for crypto investors. >> probably also helped by the fact that this is not a new posture that chinese government is taking. clearly never liked the idea of crypto so it feels familiar opposed to
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a new shock to the market. the only thing that's really going to eat away at the value of crypto is something that causes the core of true believers to say actually it doesn't have utility, it is not the future of money and therefore i sell it down at these levels and that's clearly we don't know what that threshold is make that core back away from it trading today mostly today on cross border remittances and levels of xhoers done and china said no more then i think you would have a big effect but it's a trading asset, acting like digital gold and heart to understood cut it in the near term. >> that's good points here and we know that it doesn't often have fundamentals that it trades on technical reasons. we don't know why we see the big spikes but as we were discussing
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previously and just now a selloff of 6% doesn't actually seem that severe with the news that a very big superpower of an economic country like china says any kind of dealing in cryptocurrency is illegal. what do you make of how investors should read that head lean out of a major economic superpower like china? >> i don't disagree with mike. we are looking at something that's aspirational at best. and so if we look at it over five to ten years you can continue to hear that drum beat that it is -- you have to be in early to understand what the transformative effect of the growth of crypto will be and so i think that the volatility in crypto has been obviously very well evaluated and investors are willing to take on more volatility over the
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next couple of years because they think it's what you have to accept in an early stage disruptive force as we get additional color from the bank of england and the ecb and here in the united states we can see more of an impact but again this is a known stance and it's not been that effective in cracking down on crypto within china and need to see the outcome to see if there's actually some effect from this new stance. >> airline stock outperforming the market today up by more than 2% deutsch with a buy call on united the firm believes will start seeing demand pick up this year. hope that's right. not all of wall street is bullish on the outlook for travel delta downgraded yesterday given the daeltd variant concerns.
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as you watch sort of a ebb and flows as the delta variant ebbs and flows how in the world is an investor supposed to decide the right time to enter the stocks to try to get ahead of when the business demand comes back >> this always was the case more so now kind of tactical with airline stocks meaning they just kind of whipsaw. they run based on fast moving factors. you have the realtime data from tsa and anticipate the quick turns, fuel prices but the market is itchy to again anticipate this sort of post-delta wave return to something like normal. the higher treasury yields tell you the market is positioning that way of course, the loosening by the biden administration of the international travel
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restrictions did give a lift i don't know if you have to be sure that business travel is coming back in a big way to catch a wave but it would sure help to underline the fundamentals next year. >> energy did well this week up about 5% other factors applying to them mike, two minutes left internals? >> the internals have been pr pr pretty firm most of the day. looking at the equal weight it is performing. new york stock exchange there is lagging a little bit 1.3 advancing. 1.6 on the downside with the market down most of the day has been unable to kind of come back from that exactly. look at the dow transports airlines versus utilities see the big outperformance by the -- that's a one week up until today we did see -- there i don't go
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transports and they despite the fedex drop in the dow transport shows they want a cyclical yield and selling utilities. going according to script. the vix, volatility index. trending back down toward what's become normal levels we have the nice spike usually market stabilizing with that grind that we got used to see if that's the case going into next week. >> a minute left of the session. higher on the s&p 500 by .2 prsz dow less than that and the nasdaq is flat but all three if we close where we are are higher for the week as a whole and you would not have expected this time on monday energy best performing sector today and the week today nearly up 5% as a whole for the week the dollar slipping today but essentially flat over the week and the big story of the last
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couple of trading days is 10-year up 1.46. 30-year just shy of 2% as we round out the week [ bell sounding we end the week with all three major averages higher for the week as a whole. ♪ welcome to "closing bell." as wilfred said we managed to close higher for the dow jones industrials. the s&p 500 also hanging on by a hair to green. the nasdaq did ultimately close down just a touch. about 4.5 points with the russell 2000 also closing in the
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red. carnival however a winner today after the cruise line operator reported a better than expected cash burn. ceo arnold donald breaks down the numbers and how the delta covid concerns impact bookings shannon is still with us and rebecca patterson joins the conversation mike, first comment to you we did end up ending the -- i should say the week and the day on friday higher for several major averages a surprise after this week. >> yeah. for sure late monday it looked like we would have to dig out of a bigger trench. the big story probably in terms of incremental moves is what happened in the 10-year treasury back up to 1.46. if you were to make a list a week ago of things to be concerned about coming into the week it was the fed is probably going to handicap the taper. it did so. yields backed up on the news
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you will have earnings from fedex and nike they did tell you tough things about supply chain the market handled it reasonably well is there progress on the debt ceiling? there wasn't and the market held serve. probably an underlying resilience and could tell you more shoes to drop with more information from companies and how they deal with this choppy period but i think flat for the week is a win in this case. >> rebecca, have you been surprised by the extent of the move in yields >> we have been looking for yields to rise for sometime so the direction of the move not surprising the speed maybe a little bit but i think broadly or equities what's important to note is we have seen a shift. equity markets are sensitive to liquidity conditions as the fed moving to tapering
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and rate hikes and the liquidity goes down that is something for things like tech that's going to be more of a head wind than it has been going forward. >> looking at the economic growth indicators they seem to weaken or maybe it just seems that way how would you view where we are in the cycle right now are we towards the end of the rebound or taking pause and more growth to accelerate in the future >> we have sign a moderation i think largely tied to the delta variant. the delta variant, how it flowed through to the supply chains and labor markets a weight on growth at the margin but there's still incredibly strong. consumers still have a tremendous amount of wealth. companies have cash on the balance sheets so hopefully as
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we get through delta and continue with reopenings we think that's a support for growth inventory rebuilds as the supply chains get better is another support for growth and the base case even though the politics is messy is that we are going to get fiscal package in the u.s. before year end and all things we think should support growth heading into next year. >> shannon, do you feel like the clients have got more bearish or cautious over the summer that gives you optimism that there isn't a huge amount of bullishness to come out of positioning? >> i think that as you start to look at the year over year numbers to be fair on the economic side and then from a returns perspective it would seem that perhaps bearishness is not the right word but a desire to be critical in terms of is it the right time to rebalance but we are weighing that with the
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acknowledgement that the expected returns in fixed income seeing rates higher over the course of time takes time to get the resettlement and see sol deterioration in pricing on bonds and has to be a conversation to have in terms of the long-term goal and thinking about the needs for liquidity near term is important as we could see a reset especially seeing corporate taxes move higher we saw what happened with pes after 2007 tax cut and jobs act and we could see that again. >> if inflation is not transitory and things like wages and the cost of goods, you mentioned all the congestion in the supply chain, are there areas of the mark to pay closer attention to >> yeah. our view is that the risks are biassed and inflation is a bit more persistent than the market's pricing in.
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it is interesting. break evens suggest pre-pandemic levels of inflation within 12, 18 months. we think the risked are biassed higher due to wages and rent and are just starting to filter through. what do you pay attention to we did a huge study of the 1970s and not saying a repeat but when we looked at that period and the sort of variables that told you which stocks to be most resilient you want to be looking at industries where you don't have as much competition or companies. be looking at companies that aren't going to have a lot of inputs that are inflation sensitive, look at companies where the demand is inelastic. in the '70s consumer staples did fairly well. autos prices rose and the inputts rose more so the margins were hit and look for companies to preserve the margins and pass through the costs and not too
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much competition on the way. >> is the conclusion of the week that u.s. equity investors don't think that china matters for them or got comfortable that china sorts out the problems >> probably both or the turmoil in china, the stress happening in the credit markets over there, the losses rolling for months have not bumped up against the things that immediately contribute to how our markets are priced probably the safe way to say it. seeing what's going on with the credit markets there and evergrande, all you had to do is monitor the performance of riskier debt over here look at the things that would be inputts but also what really would you big discounting? not as if chinese domestic demand is a huge driver of earnings for our companies
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and there's disconnect that it was safe to say it's not the thing that swung the markets lower. >> we have to leave its there for today. thank you. >> thank you. >> apple's -- sorry. court? over to you. >> that's okay the highly anticipated iphone 13 hitting the shelves today. could this be a much needed catalyst for the stock let's bring in our guest i understand a haiku that talks to us about the apple iphone thank you for joining us, collin what do you make of the demand to tell for this new iphone 13 >> imagine being able to ship every single new phone that you have made the day before your fiscal quarter and year ends that has to be nice. billions of dollarings flowing
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in on to the revenue for the september quarter. basically sold every single iphone 13 they can make. >> are they able to make enough 13s to match the demand with everything that we heard about and talk about with both the supply chain congestion and going on for chips >> yeah. right. definitely when we are cognizant of supply chain but if there's one thing tim cook is good at is he is a fantastic operations manager. the chips tend to be the premium chips and those are the chips that the suppliers want to make because that's where the profit is going to be just like the june quarter to mitigate some of the chip irses and the supply chain issues i expect the same thing. tim cook is a fantastic operations officer and so look for apple to be able to again be
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able to meet the demand. i think the reason the phone is sold out is not because of supply but demand. >> maybe operations is a biggest strength and pretty good all around, colin. i wanted to ask about apple tv plus and we have seen pressures in subscription numbers elsewhere. netflix and disney plus. do you think that apple plus is gaining market share or the entire market might be seeing pressure >> i think the entire market is seeing pressure. tim cook has done a fantastic job -- a good job as a ceo and his true core excellence is in operations so we can have faith in him in that regard. regarding subscription, content, apple is nowhere to be found there and not material to the company. this is still very much the
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iphone company right? even though ipads and wearables are a huge component it is 41 billion on iphone revenue, up close to 55% year over year. close to 50 million iphones shipped in the september quarter so these are the numbers to move the needle on the stock to get it to lift or drop. >> i don't want to diminish any innovation of the company because they continue to impress but it seems as if every iteration of the iphone with a new capability but maybe not as big of a leap as it once was does the iphone 13 have fancy bling to convince someone to buy a new one and do the upgrade >> so the iphone 13 has a perfect mix of being able to have the same form factor as the 12 it is an s mod el
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but that allows the company to expand gross margins and 5g demands is a consumer demand and the fact that iphone is fashion. you want to be seen with the new form factor. you don't want to be stuck being seen with an older iphone. look for the demand cycle to continue throughout this year. >> i'm not sure that is the case as much. the numbers and the demand for 13 may prove me as the outlier why i don't know what model i have this year. >> should i be embarrassed >> it's covered. >> maybe. >> we are out of time. thank you so much. >> thank you. up next, carnival ceo breaks down the company's latest results and whether bookings are impacted by delta. dan niles on the market and the big cap tech name he thinks is undervalued right now
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we're back in a couple minutes ok, let's talk about those changes to your financial plan. bill, mary? hey... it's our former broker carl. carl, say hi to nina, our schwab financial consultant. hm... i know how difficult these calls can be. not with schwab. nina made it easier to set up our financial plan. we can check in on it anytime. it changes when our goals change. planning can't be that easy. actually, it can be, carl. look forward to planning with schwab. schwab! ♪♪
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welcome back shares of carnival closing in the green after reported a narrower than expected loss and said the voyages cash flow positive joining us is carnival ceo arnold donald. welcome back. >> good to see you and hello, courtney. >> i wanted to touch first of all on your guidance that you're still hopeful of a full program of sailing by next spring. were you worried you would have to push that back off delta and how confident are you that you will hit that? >> the delta variant of course impacted consumer confidence and then saw a dip in august right around the time of peak in the news but we don't see it at this
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time as affecting the ultimate plans as you pointed out to have the full fleet hopefully operational before next summer we sailed 500,000 guests to date safely with the best interests of public health in mind and we feel good and excited to have people back sailing again. >> so the delta effect was what? just a brief dip in bookings in august and now that's already in the rear-view mirror as quickly as that? >> it is hard to tell. we had to change protocols so many dynamics around the world but no question that the delta variant caused a broad consumer confidence around travel and social activities having said that it does seem to have been mitigated and bookings are starting to ramp back up
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again. we have very successful sailings occupancies have been very good. so we don't see a direct measurable impact that we can isolate to delta and things are trending very positive. >> arnold, you are putting out expectations that are ahead of what the street expected coming to returning to cash flow positive operation how will you do that when you still posted a net loss? >> we are still experiencing a loss because most of the fleet is still paused. while we are excited to have carried 500,000 guests to date, over, we are averaging on a daily basis 50,000 now we have to get back up to the fleet operationally with 35% capacity. individually the voyages are cash positive. we need more of the fleet
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sailing and higher occupancies on the ships that sail because of constrained occupancy across the global fleet at this time. >> as time goes on do you find people more or less content to deal with the restrictions clearly that have been imposed on you not by choice that you place on them when they board your boats because it is kind of interests to tend to hear stories of stories on flights from passengers but not on the boats. >> our network promoter scores have never been higher seeing unprecedented guest satisfaction scores and the experience on board thanks to the dedication of the crew and the good spoirted attitude of the guest has been sky high. the energy on board is great guests are having a great time, great experience of sailing so we haven't felt that
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same time even before vaccines were available we were sailing in europe successfully and safely and then sailed in the u.s. florida and texas when the rates of cases was probably at higher than anywhere else in the word in community spread but woerp we were able to do that safely, too we are hopeful that the cdc and around the world will allow us to sail freely as we continue to stay focussed on safety and public health as we always have. >> i am curious about the composition of the passengers that are sailing would you say that you see more repeat customers why are they spending more on board this summer than pre-covid? >> fist of all, we see a lot of new to brand 'new cruisers on
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brand and we were counting on the cruise that understanding how safe it is to be first on board and, peerpsed a good proportion of new cruisers already certainly in the bookings going forward we see that in terms of onboard spend i think because guests having a great time, also been some great management on the part of the marketing and sales people that have bundled some items and then once people on board they have money to spend so there's just a positive energy and on board revenues are up we have seen significant increases across the fleet. >> looking further afield clearly you have given us guidance of cash flow positive by early next year add a year on to that. what will be your plans with the
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balance sheet? pay down debt. what's your thought process back to normal? >> given the transactions to do to provide liquidity to get us safely to full restart we have to focus on cash maximumization for a time we extend maturities to balance out the balance sheet better we have reduced the interest expense with two refinancings. on two refinances we have done while extending maturities and we have to for a period of time focus on mash maximumization to get back to the stellar credit rating that we had prior to the pandemic and that will create real value >> it's been quite the ride, arnold, for you. we hope it continues to improve
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and thank you for joining us. >> it is great and we welcome everybody back on board. thank you. >> arnold donald, the ceo of carnival joining us there. the stock closing up 3% plus today. we have news on the debt limit. ylan mui has that for us. >> there's money left before the debt ceiling new data showed that treasury authorized $304 billion of extraordinary measures and exhausted $234 billion leaving $70 billion of flexibility and had about $174 billion in cash to spend it's unclear exactly how long the money will last but the bipartisan policy center updated the forecast to between october 15 and november 4th to hit the ceiling and the senate is slated
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to extend a date to keep the government funded this year and republicans are threatening to block that saying the democrats can do this on their own but clearly time to end the standoff is running out as treasury predicted $244 billion in cash and extraordinary measures left to spend guys >> interesting update. thank you bitcoin under pressure. so founder dan niles think the troubles for crypto could be starting mortgage rates above 3% this week zillow's president on whether e rates could hurt the housing market -wel alright, let's see what we can adjust. ♪♪ we'd be closer to the twins. change in plans.
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stocks making a big comeback from the monday selloff. however all three major averages on pace to close lower for the month. for where he sees opportunity let's bring in dan niles of tori fund and joins us in an exclusive. thank you for joining us. >> my pleasure. >> what did you make as the
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trigger for the selloff on monday are you surprised to see the speed with which we're back for the week as a whole? >> yeah. i'm not surprised to see it go down a lot on monday and rally at the end of the day the liquidity is still there the fed balance sheet hit a record high this last week the up 20 prs year over year but the key here in my mind is fed told you they'll start tapering in november and extra unemployment benefits ended in the beginning of september so you already started this process of dialing back some of that extraordinary stimulus you put into market and what i'm focused on between now and year end and how that impacts things. >> what is your latest feeling on that seeing the week where the 30-year up to 2% or so is this the crunch point to
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weigh on richly valued stocks? >> it is a combination of everything main thing being really the fed and to put it in perspective since the global financial crisis the federal reserve expanded the balance sheet over 11 1/2 years but when the pandemic started they expanded the balance sheet by 4.3 trillion in a year and a half so you look at the stock market last year, the pandemic started, up 16% pandemic continuing this year, up 19% either a pandemic is good for the world or something else is driving it, stimulus when that is dialed back you will have a big problem so that's the framework through which we judge thinss and then on top of it growth the slowing and heard that from fedex. nike's forecast got cut. there's supply chain pressures
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down there you have the not great come by nation of slowing growth, high inflation and high valuations at the same time. >> dan, earlier this month you talked about apple as a larger long position to a larger short position into the iphone 13 launch are you still largely short apple and because of the technical pattern you see around the product launches rather than a fundamental analysis here? >> yeah. apple is comply kated. in the short term as we wrote back in an interview a couple weeks ago with becky quick it was technical. the stock outperforms three quarters of the time in the month leading up to the launch and then the day they launch the stock goes down and covered the apple short on monday. but if you look at the
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intramediate term of september quarter they launched all four new iphones in september a year ago because of the supply chain disruptions they launched in october and november. september quarter should be good but if you look at further than that iphone revenues down is 11% from 2015 through 2020 the stock looking at total revenues grew so this company doesn't grow fast at all the stock did fantastically well the multiple has gone up we are not big fans of apple because smartphone growth down four years before this latest surge driven by the pandemic 4 billion people on the world already with smartphones the replace.
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cycles lengthening out last year with 5g and this year incremental improvements they're starting to pay back the pandemic benefits by missing and you will see that with smartphones towards the december quarter. probably disappointment in december lapping the comparisons. >> but not currently short apple having covered that earlier this week dan youmentioned netflix and disney missing sub numbers are those richly priced stocks that you are short at the moment >> yeah. we're long viacom and so the way i would think about it is this right? netflix missed the last two subscriber number nsz a row. disney told you this week they're missing the subscriber numbers. viacom we believe is beating
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their numbers and streaming numbers up 90% year over year for almost 20% of the business and buy it at a 10 pe. paying 50 times for disney and netflix so we're about risk to reward we can be short with names with issues richly priced and then add to the viacom position this pa week quite a bit and with discrepancy and room for things to kind of coa les. >> what did you make of the china clamp down on crypto today? is a 6% decline or wherever bitcoin ended up today quite a small mover in light of the clamp down >> yeah, no. you are right. it is a small move in the scheme of things. for us what's interesting is the chart pattern where extra
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unemployment benefits ended september. when you look at amc or gamestop they peaked. my view is it's an asset class just like art or nonfungible tokens but it is not a currency. so that gets influenced by liquidity because it is not a stable storer of value and continue into walmart and buy products with bitcoin and not freely exchangeable into goods and services and think of it as an asset and not a currency. >> not yet you're making moves in sports betting and video games. why are these the right moves to
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make >> i think it is a timing thing. the nfl season just started up viewership is amazing right now and you have to remember there's more states legal, about two dozen states that legalized gambling and a last big market in my opinion to move online through the internet and shoumd see huge numbers from this space and allowing in-game advertising of the sports betting books so we think that's also going to drive up engagement there we like a lot with activision, that was a top pick last year down 19% this year we think video game sales will be incredibly strong this fourth quarter because last year you
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couldn't get the new playstation 5. i got mine two to three maches after the holidays this year you have plenty to buy. have an engaged customer base. and the stock's got an incredibly low valuation relative to history compared to other names short in tech. >> dan, great to see you thank you for joining us. >> my pleasure. we have got news on investor michael berry. kate rooney has that story hi, kate. >> michael tweeting out that his firm has been issued a subpoenaed by the s.e.c. over gamestop according to a tweet. he says we know who got an s.e.c. subpoena over gamestop. he says i know who he puts a screen shot of a
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letter from the s.e.c. dated september 21 we have reached out to gamestop, the s.e.c. and others. but the hedge fund manager famous for contrarian short positions highlighted in the book "the big short. he has been a gamestop investor and unclear on exactly the details of the subpoena and will let you know when we have more. >> keeps on giving thank you. still ahead netflix taking a page from disney's play book coming up find out how it could help the growth strategy help the that'h strategy yeah, it's kind of our thing. huh, that's a great deal... what if i'm new to at&t? cam, can you...? hey...but what about for existing customers? same deal.
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time for a cnbc news update with frank holland. >> here's a news update for this hour president biden will not invoke executive privilege to shield president trump's records from a
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congressional probe into the january 6 insurrection the white house saying it would not be appropriate to assert privilege in this situation. in texas officials say the migrant camp is now empty. last weekend nearly 15,000 people were there seeking asylum in the u.s homeland security officials say about 2,000 haitians have been expelled from the country and others are staying allowed to make the cases before jrchs place say a 29-year-old was a gunman in a mass shooting at a kroger supermarket saying as a sven dosh for the store and a total of 15 people shot. one killed no specific target. a look at the life of the woman killed and the search for the shooter's motive. back over to you. >> thank you. new home sales last month
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falling compared to last august. zillow's president discussing whether that's a red plaque for the housing market later on "closing bell. 16 times in a in , most awarded for network quality, 27 times in a row. proving once again that nobody builds networks like verizon. that's why we're building 5g right, that's why there's only one best network. ♪ limu emu & doug ♪ got a couple of bogeys on your six, limu. they need customized car insurance from liberty mutual so they only pay for what they need. what do you say we see what this bird can do? woooooooooooooo... we are not getting you a helicopter.
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equity indexes this is e emergencying markets index excludeing china and then this is a proxy for the domestic chinese equity marks and able to create a firewall between what's going on in china. on the credit side that's the locus of the recent concern of china with the real estate market if you look at the spreads, high yield spreads on chinese debt, chinese that racing higher 14 percentage points is the spread is the rest of the world, investors everywhere else whistling back the graveyard or properly suggest what's happening in china doesn't have tremendous spillover effect? it seems look the latter we have to stay tuned. >> particularly if the economy in china is affected and
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nobody's base case thank you. up next, pulse check on the real estate market a beat for new home sales earlier today so we will be discussing whether or not there's more room to run for that sector or if we've hit the peak with the president of zillow after this break. the best things america makes are the things america makes out here. the history she writes in her clear blue skies. the legends she births on home town fields. and the future she promises. when we made grand wagoneer, proudly assembled in america, we knew no object would ever rank with the best things in this country. but we believed we could make something worthy of their spirit.
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to protect every device on it— all backed by a dedicated team, 24/7. every day in business is a big day. we'll keep you ready for what's next. comcast business powering possibilities. new home sales rising 1.5% in august. year over year new home sales down nearly 25%. for more on the housing front bring in zil row president susan daimler. thank you for being here i understand that you see some signs of getting to more healthy housing market what do you mean by that >> yes thank you for having me. great to be here we are what the data is showing is moving from what was this white hot market to a red hot market and you said some of the signs we are seeing inventory rise
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month over month for four months see home price appreciation cool down a little bit and good things these are signs that there's this healthy rebalancing coming. basically making the market more sustainable and giving optimism to buyers and much-needed relief but the red hot market is still there. total home sales in 2021 will be more than 2020 in 2020 they were 15 times higher than in the past. >> i'm sure that you are aware that zillow's eye buying service to buy homes from sellers has come under controversy with some accusing zillow of artificially increasing the market rate for homes and then in turn making more money as more homes sell at the accelerated value. what is your response?
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>> the whole goal of zillows offers is to buy homes at market rate and then sell them and sell them quickly at market rate and the business is the profit margin is based off of a fee we make from the sellers who sell us the homes and usually about 5% so we as a business are highly incentive to get that pricing right because if we price homes too high, then if we go to sell them, we won't be able to, certainly not quickly. and if we price them too low, home sellers won't be interested in our service so we have every reason to get that pricing right, and we are really seeing an incredible demand for this service as we innovate for customers who just love the certainty, the ease and speed to be able to sell your home in this new way. >> i totally get that, susan i have two followup questions or thoughts though.
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the first is, is it very clearly marked when somebody is buying a house from you or selling to you as opposed as just using your website as a broker and moment of exchange? and do you think it was clear and where less potential conflicts back before you also became a buyer and seller and you were just a few broker of sorts? >> we offer a lot of products and services and our whole platform is meant to highlight those for the customer even if customers don't want to sell their home to us, we want to connect them to an agent. we want to make sure customers know all of the products and services we offer and be able to get them to that product and service to the best and clearest and transparent way we can that transparency and choice for customers is something we prided ourselves on and will continue to. >> as you look forward to the balance of this year, and maybe even next year, i will ask you
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to look at your crystal ball, what do you think we will see when it comes to demand and subsequent pricing for homes here in the united states? >> i think -- and our economists believe -- that the market is going to continue to be strong here for the rest of the year and well into 2022 we have really strong tailwinds that are going to make it so, which is millennials, we talked about them a lot, huge generation of folks who are starting just to buy their homes and starting to move we have low mortgage rates, and then we also have remote work, which is really a big foundational block of moving and we think there's a lot of pent-up demand in that right now. we just did a survey where 80% of workers are telling us we want to work remotely at least part of the time, 44% are telling us we want to work remotely all of the time but 40% are selling us their employers have not told them what the future holds for their work. we think as employers continue to get crisper, that these
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employees are going to either get up and move or adjust so there will be some pent-up demands there as well and that the rebalancing will also continue to make it a good space for both buyers and sellers. >> susan, you guys obviously get a good pulse check on markets outside the u.s. too do you get a feeling that primary markets are still being zriven by the post covid world, that they're on the way down or still on the way up or other factors are the driving force again and individual markets and economies and things like that are driving the property market once again >> yes, it definitely feels like we're moving a little away from the pandemic and those factors and moving into these other pieces the rental market is great example of that. rents are higher than ever in a few of the cities, we are seeing like tampa, phoenix and the sun
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belt and just they are strong and opening up and people are starting to understand they need to move and live and do all of that stuff will keep it going. >> susan, thank you so much for joining us good to see you. >> thanks for having me. up next -- netflix taking a page out of dieysn's book and holding its first ever event tomorrow a preview what to expect
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recognize that sound netflix is hosting its first of ever global event tomorrow and there's a tie-in with the chime. hopefully more coming than just that chime on repeat, julia? >> that sound or chime, if you call it, is ta-dum that's what their calling the name of the event tomorrow, the sound you hear at the beginning of all netflix shows three hours of live event of clips and previews of stars and creators from 70 different netflix series and films netflix is taking this event off
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its own platform to youtube and twitch as it looks to build its fan base to lock in subscribers and build new ones this is the latest brand move since acquiring "chocolate and the chocolate factory" and rest of the catalog where netflix spending $17 billion on content this year, steve-o raised his price target, saying it will attract new subscribers. got to love anything named after a sound. >> and i'm also thinking about how disney will be there, obviously, but there's so many netflix documentaries about murderers or political documentaries, on one level you think what type of characters do you even want to go hang out with there
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>> look, you have to remember, will said netflix has over 200 million subscribers so there's a shot like "stranger things," and there are fans' merchandise, and show passes and there are shows in the second and fifth season that they're starting to get a really devoted fan base. the idea is they will keep the fans connected, even if it might be a long time between seasons. >> julia, thanks so much. mike, we have less than a minute left until we move on to "fast money. what should investors be looking at the at the start of next week after the choppy week that just passed >> yeah, market got its feet back under it to some degree here we're sitting 2% below the record highs essentially on the s&p. i think what's interesting is we had this big move in treasury yields but so far it hasn't dented the big nasdaq stock. so maybe see if that changes the
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dynamic. also, next thursday, friday, no jobs numbers if we get inflation numbers coming out, we will see if that changes the whole bond market path as well. >> fascinating such a big move in yields but both equities and dollar kind of ending the week flat and reversing its initial move that's where we stand with the ten-year at 145 to close out "closing bell. "fast money" starts now. overlooking new york city's times square, this is "fas money. i'm melissa lee. brian kelly, peter najarian, co-founder of market tonight -- crypto crackdown as china bans all cryptocurrency transactions we will tell you why our own crypto baller, b.k., is calling this great news. and where he sees yields headed next. and how this epic drop for on


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