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tv   Squawk Box  CNBC  November 26, 2021 6:00am-9:00am EST

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breaking news this morning, dow futures plunging more than 2% following big drops for stocks in asia and europe overnight global investors spooked as a new covid variant was found in south africa and reopening stocks getting slammed, stay at home stocks picking up steam we are going to bring you complete market coverage this morning, plus it is black friday and that means it is time to
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talk retail. but between covid concerns, labor shortages, and supply chain issues, there is so much of a big question mark surrounding the industry right now, it is november 26th, 2021, and "squawk box" begins right now. good morning, welcome to "squawk box" here on cnbc. i'm becky quick along with andrew ross sorkin joe is out today but boy, there is something to set up and pay attention to this morning. let's get to the top story, a global market selloff. u.s. equity futures if you're waking up, adjust your eyes here, dow futures indicated down by almost 800 points a drp of 2.2% the s&p off 83 points, 1.75%,
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and the nasdaq is down about 177 points, that's down more than a 1% drop. all of this comes as the world health organization has called a special meeting for today to talk about the new covid variant strain found in south africa here's the biggest issues with this, the scientists have d detde detected dozens of mutations on the protein variant. and the number of mutations could have significant implications for how well the vaccines will work or how easily the vaccine is transmitted between people it's not just vaccine immunity we're questioning, it's if you have immunity from a prior infection would be a similar story. the number of cases skyrocketing after coming out of nowhere in south africa as you expect when be at the market reaction, you are seeing the weakness in the reopening stocks, american airlines off by
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7.5%, similar at united and delta. alack a down about 6.8%. cruises similar story there. pressure across the board with declines of more than 10% for carnival and royal caribbean hotels this has been the same story. people have been so eager to get out there. if you hear new variants maybe that eases some of the thoughts about traveling quickly. marriott is down by 6.1%, wynn off 5% and the stay at home stocks those are the ones benefitting today. these are under pressure in recent weeks as it looked like we were getting out there, zoom up by almost 10% peloton up by 6.1% we should point out these are lightly traded markets this morning. this is a half day of trading markets close at 1:00. a lot could be the machines kicking in but you are seeing
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big knee jerk reactions to all of these. >> happy thanksgiving, becky. >> happy thanksgiving. you thought it was going to be a light day, come in and talk about retail not the case >> on wednesday i thought things are going to be so much better and now lots of questions. >> by the way, everybody coming from these great gatherings with their families, the first time in a long time, so a lot of optimism coming into this and this feels like the rug gets yanked back from under you. >> the flight to safety, the story in the markets this morning. treasury yields right now you're lookingat the 10 year note at 1.526. you can look at gold right now as well. we'll have to show you some bitcoin in a second but let's flip the board show you gold show you the dollar in a second. gold standing at $1,810. you're looking at the dollar you can see what's going on there in terms of about 1.12 relative to the euro but then let's put up a crypto
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board. because crypto not exactly the greatest hedge in the world right now. let's show the board again >> it's a little weird. >> we're having some potential crypto technical issues there. >> bitcoin was the biggest. >> about 54,000. >> it's down by 7%, not what you might anticipate you might have thought the cryptos were a flight to safety too with inflation here it is most of them down by more than 10% for these coins. oil prices have been another place you've seen a huge pullback with this happening wti off 6.8%, down by 7% earlier. $7 $73.07 and then brent crude down to 77 as so this shows you what happens if there's any concern about the demand outlook. >> there was a couple of people i want today talk to this morning in addition to you when
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i woke up and really appreciated the news to the extent it was. and one of those was meg tirrell joining us on the squawk phone line so much to try to dig in and understand meg, happy thanksgiving of sorts. post a day later i know you've been working it. tell us what you know and what are you thinking >> well, it's very, very early days for the variant the good news is they identified it really early and they're sending up the flag so people are aware of this. in one sense the w.h.o. pointing out this is showing the surveillance system is working really well. so south african researchers held a press conference yesterday and explained what's concerning about this. they identified an unusual constellation of mutations in the variant. it's potentially going to get a greek letter name today from the w.h.o. and what's concerning about that
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is that there are more than 30 mutations in the spike protein, and some of those are known to be associated with the potential for increased transmissability and potential to evade our immunity from vaccines or natural immunity or potentially could get around our anti-body drugs. all of this needing to be further research erred and the w.h.o. saying we learn more in the coming weeks it's very early days if you look at the case numbers in south africa right now, just seeing an uptick overall that looks small. so it is extremely early we need to learn more. but the level of alarm is higher than anything since delta. i was hearing from a lot of folks yesterday who were worried about this. >> let's talk about the sort of various permutations that this could take the transmissability issue is a big one. the danger to your own system being able to evade vaccines and
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your own defenses is a big one having said that and i don't know if this is going to sound fatalistic if it was very, very dangerous to the body in some ways that would make it less transmissible over time, right >> yeah. if you find the variant that is more deadly, doesn't spread so far, there has to be that perfect balance. we don't know anything about whether this could cause more severe or perhaps less severe disease. none of that is known because there are so few cases out there. but it looks like it can outcompete delta and that is surprising given how transmissible delta is at the same time, epidemiologists are trying to understand the underlying dynamics of where this is spreading right now. because south africa went through a terrible third wave and cases are coming down, so is it that it's outcompeting delta, is it it's taking off with less
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virus circulating. all of that needs to be better understood but you know the vaccine companies are looking at this to see if they have to update the vaccines >> how quickly can they do it? that's where i was going with this it appears to me when you talk to scientists, they say we can formulate a new vaccine in the course of 72 hours the question is, it might take six months, eight months to get it approved and in the hands of people if not longer. >> right we don't know how the regulatory systems would work for this because we haven't had to do it yet. we know the mrna technology allows them to design these quickly and then to start to make them really fast. so i think pfizer has talked about doing this within 100 days they've been able to do it i think maybe even beat their own goals for the beta variant they didn't need to update the vaccine yet. but certainly these companies
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have surveillance systems of their own, paying attention to all of this. i heard from some of them who are looking at it really closely. so if they need to update the vaccine they should be able to do it. and then it'll probably be a matter of working with the fda on using anti-body data to clear a new strain this is what we're talking about the mod of the flu you don't have to run the 30,000 person trials, you just update the strains and they understood what antibody levels they need to hit we don't have the protection in this virus yet but it is something looked at closely by >> part of the concern is if this can evade the protections that we thought we did a good job with, having people vaccinated or burning through so much of the population we thought this was going to be something that we could move
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with the other part is we've seen the new antiviral pills and treatments what's the expectation to how effective those new pills and treatments if you do get covid are, would they respond to this as well? >> yeah, i haven't seen specific research on these antivirals with the variant yet but the conversations we've had with folks albert when he came on november 5th when they got the information on the antiviral, saying it should stand up to mutations, and it would work against different coronaviruses. it was named after the hammer of thor because it, wos against multiple different kinds of viruses. so it's hoped these drugs would still hold up against this variant. the antibody drugs are more specific to sars covid 2 there was some research last night suggesting the regeneron
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antibodies one could get affected by this veers could potentially hold up better astrazeneca could potentially. so we'll need to see that borne out. undoubtedly there are researchers looking into this in addition to how well the vaccines should hold up. but public health experts are emphasizing, folks should get vaccinated, still the best protection we have, and the more we limit the spread, the fewer variants occur >> i know it's a lot to process and get through by we enknow you've been working the p phones in the meantime, lots of red arrows in europe and asia overnight. many european countries looking to impose travel bans on people coming from african countries. karen, this is a quick reaction
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as well to something we are just learning about >> becky, happy thanksgiving to you and to andrew. it's not the type of friday we had anticipated here in europe or across in asia. many traders on the side were hoping for a quite friday. but what we've got across the asian markets selling. a number of the central banks in the region had moved towards exit, south korea, new zealand, it begs the question whether that was too early at this stage if we are still dealing with a variant in this pandemic so markets selling off china an exception more contained you have to say as we look at the percentage fall but they've had a zero tolerance approach to covid anyway i want to take you to europe because this is where we've seen a lot of the pain across the course of the early trade. a knee jerk reaction setting the scene for the u.s. later today we saw selling coming into the mix, particularly for areas of the market trading in p better
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fashion. french stocks one of the outperformers of late. that market coming off, down 3.2% putting distance between the recent record highs we experienced on european markets already earlier this week we had a wobble around rising covid cases in europe, but this story adding an extra leg to the down side the spanish market down 3.7% the german board as we talked about the narrative of a faster taper in the states potentially and a rate hike on the horizon next year. we thought about it in europe as well to the point some market participants were saying would we see a rate next year, you can see we've moved deep and negative, minus 3.1 as the flight to safety moved to global bond markets sectors, similar to what ahead
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of market in the states. markets just reassessing what they thought around the margin expansion story, banks down 4.8% down the travel and leisure sector the worst performer was iag, down 20%, it claimed back some of it, down roughly 10%. oil and gas too, what a week it has been to tap strategic petroleum reserves around fears of the escalating price. so we have a pullback in energy stocks here, similar to the spot price in brent and wti health care, tells you about the refocussing around the pharmaceutical names a challenging session here delivery stocks, remote working stocks and gold are in favor today. back to you. >> karen, thank you very much. joining us right now is greg
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branch, a cnbc contributor the reaction this morning seems to be sell now, ask questions later. what's your reaction >> right and so, my reaction is that look i'm going to operate under the assumption this is more transmissible. that leads me to narrow my focus. because that posture leads me to believe that europe will experience an entrenchment, more closures, regulations and lobdowns so that will cause demand for energy as we noted and previously i liked the energy trade so i'm staying away for now. that gives me two other no fly zones essentially. one is the work from home versus stocks which at this point because the -- wow i am so sorry. technology stocks are safe for me because on the one hand,the
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inflationary pressures don't hit as much with the wage pressures very muted in that sector and the growth can sustain any demand destruction due to covid wave which we are anticipating any way. >> just obamacare looking at th, the higher yields meant people were afraid of technology. seeing lower yields today, h helping technology we were looking at the ten year thinking we were going to hit 1.7%, now we're at 1.524%. so these are quick moves that come through with it i guess, greg, the real question people are going to be thinking, is this a head fake? is this the time to buy that we've been waiting for if you were waiting to sell off and buy the dip, you've been sitting and waiting for a long time. >> as far as yields go because we're seeing a flight to safety
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and people are buying. although i think if we're seeing a tight wave it's going to be more difficult for the fed to tighten next year. but buy from places immune to inflationary pressures we're going to see workers leave the workforce and not come back as quickly we want to see things that can sustain demand through entrenchment or larger wave here looking at technology, which as we saw last year can sustain demand throughout a wave and doesn't face the inflationary pressures from wages, materials, shipping so enterprise software, lots of margin expansion last year and i think next year as well as intellectual properties with adobe, experience cloud, document cloud that gave us 45% margin that is my flight to safety at this point >> you mentioned at the top of this that you think europe is
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going to go into retrenchment on this, deal with lockdowns. this is an issue with something like south africa and some of the african nations are dealing with this. europe is the only place they're going to see a lockdown? is that because they were on the edge of a lock down before with the higher numbers >> they're around 390,000 cases a day. their previous high was 320,000 so they're already significantly above their previous pandemic peak and so, yes, the situation is certainly very delicate there. but we've already identified this virus in hong kong as well. so i think we would be remiss to think that any region could insulate itself. and if that is true, we will see destruction to manufacturing capacity, with closures and withdraw backs we will see ports close and affect that as well. >> an extension of all the supply chain issues we've been seeing could i throw one thing out. i know this is early, people get
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scared when they see headlines like this. but if you have all the treatments for covid, things like the pill that merck has submitted to the fda the one that pfizer has submitted. all of these other treatments out there at this point, maybe this is something where it's a slow down, we don't get to ope as quickly as we thought maybe a few more months before you can get to the point where all of those are readily available. it's not as bleak as the outlook before the treatments. >> yeah. of course. and so, even when we talk about the record high in infections in europe, the actual death rate is about 50% lower than we saw in that peak last year. and so, you know, that -- if there is any saving grace we're seeing the treatments are staving off the worst case scenarios for us and, you know, maybe merck and pfizer are the big winners when you look at the new antivirals they have coming out, hopefully it has eccefficacy against the strain but those are
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about 12 times what a needle pick costs and the gross margins are higher for pfizer in particular, 95% gross margins. operating margins not far behind that and they don't have to split it with the partner. they're the big winners. >> merck is indicated higher today and pfizer indicated up by about $3 from where it closed on wednesday, too so you are seeing some of those moves to take a look at the stocks, too. there you see it, a 5% gain for pfizer, merck up about 1%. and moderna up by more than 8% andrew >> look, for the past almost two years now we have effectively quote/unquote, looked through or oftentimes looked through these issues and the question is, at what point do you decide you're not going to look through the issues, you're not going to extend your time line for the quote/unquote end? do you say there is no time line
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ever how would that change your sort of thinking about all of this? >> so i've probably been an outlier i think as you guys know, thinking that cpi would hit 6% this year and pce would hit 5% this year and certainly had a few folks call me alarmist back in august so i was probably longer in duration in terms of how long these things would last. i'm now pushing that out further. at the end of the day, if this does start to affect manufacturing capacity, if this does cause further impairment at the ports with shipping, it's going to take us longer to resolve this whereas before i thought it might abate in the first quarter i'm looking now probably mid to fall so yeah, i don't think we have a choice but to elongate our expectations at this point >> greg branch always good to see you.
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i wish the news was a little bit different this morning >> left me speechless. >> exactly. >> thank you coming up when we return, beyond this morning's big story we'll talk a little retail today because it is black friday traditionally the kickoff to the holiday shopping season. we'll talk about the issues plaguing the industry this year next interesting to see the psychology of what's happening today in the markets and covid does in terms of people going online and shopping. we are live omhefr t nasdaq market site in times square this morning. ♪ ♪ well would you look at that? ♪ ♪ jerry, you've got to see this. seen it. trust me, after 15 walks ...it gets a little old. ugh. i really should be retired by now.
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welcome back to "squawk box. if you are just wakingup, we have a global market selloff on our hands this morning you are seeing deep pressure dow futures down 770 points, and that's not the weakest numbers we've seen this morning. s&p indicated off by 75. nasdaq down by 145 this is all coming as there's the identification of a new covid variant in south africa. they've been talking about this, seen it very quickly the w.h.o. is raising some big concerns because this new variant has lots of mutations. dozens of mutations on the spike protein, that's the way it gets into the cells and that has them
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concerned this is a more quickly spreading variant and potentially a more deadly variant, one that could evade vaccine protections. lots of questions. it's too soon to know with this but already you are seeing some countries move to shutdown some passengers not allowing from south africa as a result this is what the uk is doing, singapore, germany you can see right now the biggest dow components, the biggest drags on the dow this morning led by boeing. it's travel stocks taking it on the chin this morning. boeing down by more than 6%, actually 6.5%. chevron down, drop of 4.7% because oil prices have cratered as well. j.p. morgan chase and goldman sachs down also.
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4% for both. you are seeing the 10-year yield drop significantly as well back closer to 1.5% as we thought, andrew, we were on our way to 1.7%. >> i'm just whistling in the wind at this point it's unbelievable. we're going to talk a little retail this morning because it is black friday and the industry's supply chain issues continue we want to talk to frank holland from a best buy in new jersey this morning happy thanksgiving minus the news on the supply chain front and also, of course, on the covid front right now. >> reporter: happy thanksgiving, happy holidays to you andrew and becky. recent surveys show that 75% of shoppers are worried what they want to buy will be sold out because of supply chain issues that's why i grabbed this playstation controller here at the best buy in the philadelphia area you can see there's quite a bit of instore shopping on the second black friday of the pandemic
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pretty full store right now. online shopping store increase by 16%, and other data shows it could increase by 50%. the retailers are doing all they can to keep their shelves and fulfillment centers stocked this holiday. ahead of this holiday season, according to the latest earnings report selling the inventory faster than last holiday season showing that consumer demand as we enter the shopping peak the real question is, can retailers source enough inventory to meet this demand? best buy, the chief merchandise officer said it's increased same day delivery by 400% and next day by 100%. so what you see online should be on the shelves in most issues. >> gaming consoles, obviously there are shortages, phones some
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shortages, blue tooth speakers another example of shortages you're not going to see as many discounts because there's not as much supply to meet the customer demand that would happen in total. >> reporter: demand is booming in m some categories luxury hand baggs those sales are up over 50%. furniture and footwear, sneakers, also big sellers back to you. right now we'll get a check of black friday on the ground in long island. dana telse joins us from the roosevelt field mall before the open it looks like there are already people coming into the ball behind you. >> hi, becky, yes, there are, happy holidays there are people in front of me and behind me. busier than we've seen, not 2019 levels but certainly a real pick up as frank just mentioned there's
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been a pick up in the first half of november all along with people buying, retailers marketing and the promotions are less than in years past. under 50% where in the past it was 50% plus. >> that's the thing i've been surprised we think there's going to be no discounts but i've seen plenty not only in the stores but that are there for online shopping as well is this something that is going to impact margins or are they taking the discounts just where they can afford it to lure people in and thinking they will make up for it on the volume >> i think for the most part i think the discount rate is less than it had been in the past i think they're taking it on goods where they know they'll make it up in other areas on full-price sales and i think the margins going into this have been solid. the supply chain head winds are there, labor pressures are there, but overall more goods are being sold at full price today than two years ago
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that's going to continue given the supply chain headwinds aren't going to normalize until sometime in the second half of 2022. >> we've seen there will be winners and losers big box retailers all are in good shape, they've been able to get the inventory, the labor what happens to the stores in the mall that have had a much tougher time over the last couple of years? >> i think overall we've seen the weaker stores weeded out after the pandemic it's amazing the reinvention we've seen some retailers do aber come bri and fitch coming back you take a look at american eagle with their denim jeans and frank mentioned hand baggs what the retailers have done, taken the learning from the pandemic, innovated and building loyalty. it's exciting to see what's happening to the mall-based retailers that i never expected
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two years ago. >> american eagle, there were people at the table yesterday buying the denim while we were sitting there. pretty busy day at the mall already even at this early hour. when we come back we'll have continuing coverage of the top story. covid concerns spooking investors in a big way s&p laggards including the travel stocks and oil stocks because travel concerns obviously a big deal, carnival corporation, the weakest of the s&p -- s&p companies is now down by 10.5% royal caribbean is down by 10%, norwegian, too marathon oil down by 8.57% this is coming as the demand picture for oil craters on the news from europe and africa and asia at this point mar tathon down by .5%. when we come become we'll talk
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ouabt all of this. stay tuned you're watching "squawk box" and this is cnbc.
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hey, rob, there he is. workday. the finance, hr and planning system for a changing world. welcome back to "squawk box. we are watching a market selloff this morning ahead of the open right now about 2% down on the dow amid news that a new covid variant has been found in south africa also now in israel. dow jones off about 830 points right now. meantime, bonuses on wall street expected to hit all time highs as you can see the whip saw this morning. this year as employees across
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the country have struggled to get equitable pay to their workers during the current hiring crisis joining us is lydia monahan, kate kelly. good morning tobo both of you. we are grappling with the new news, i don't know if that's going to impact bonuses or not it might impact next year. we'll see. what are we expecting to see both of the very, very high end but what i think the big distinction this year is actually going to be on the first and second year associates, right? >> yeah, wall street is expected to doll out record bonuses this year, 30 to 35% higher for investment bankers ranking from junior bankers to senior managers what this is is a supply and a demand issue so when it comes to demand this is a hot year for banks, inundated with business. an influx of spacs, i.p.o.s and
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mergers. banks like j.p. morgan are having to turn around business because they don't have the horsepower to get it done. when it comes to supply, a couple things are happening. it's a lot labor market and bankers are going where they can get the most money and you touched on this andrew, the pool of people interested in this kind of work is diminishing, particularly at the analyst and associate level. you have younger bankers looking around saying i can get a job in big tech i can work at google, better hours, good pay, there are nap pods that's not what life is like at goldman sachs. and banks recognize this and are looking to compensate accor accordingly. kate kelly, what i was going to ask you relates to the comp ratio. for so many years you get the earnings report from a big bank and look at what the comp ratio
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was, and that was a big factor in the way a lot of people thought. goldman had a higher ratio than the other banks and the ratios started to come down, are they really about to move up or is it that much more profitable in business right now >> it's hard to know because this year is so exceptional. especially relative to last year we might see that happen, andrew and again, as you said, the market changes day-to-day, including today. so stay tuned. i thought it was interesting at goldman, lydia mentioned them, too. they gave one off compensation to their top two people -- stock based compensation worth tens of millions of dollars, on top of their base salaries and compensation for last year and the coming year that's tied to performance targets and also five years of additional tenure with the firm. that tells you both at the entry level which we were just talking about and the senior level there
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are retention concerns because it is such a hot market and these are marketable skills, the things you learn as a young banker are translatable to other careers, including at the megafirms where it's predicted you'll nzebo fuss -- see bonus upticks year over year. >> what is the delta right now between working on quote traditional wall street, the big banks we've been talking about, and i'll include goldman sachs and morgan stanley and those in there, relative to how well you would do at a big private equity firm, lydia? >> it's a great question i think a lot of these private equity firms are more nimble, they can offer great pay packages to folks where as the bigger institutions have to
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offer conventional pay, at least to people starting out. >> finally, kate kelly, what do you think -- i'm just curious because i haven't gotten a chance to talk to you recently given the news today do you think that's going to affect -- the bonuses have not been dolled out yet, do you think any of that women impact anything >> i think it's highly unlikely. i think a lot of the firms have had their bonus meetings with people or will do in the coming days and weeks and as you know, these decisions are taken seriously at multiple levels at banks of b of a, the president and the person that runs banking and markets personally oversees a lot of decisions, same at other firms so to roll that back based on short term market disruption would cause revolt in the ranks and mess with the hierarchy in a different way.
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but that's the thing you are dependent on the conditions on the ground that's one of the things you live with when you do it as a job. i suppose a huge downdraft will make itself felt if not in year end bonuses very shortly thereafter in departures, in predictions for the coming year and so on. >> okay. lydia and kate, great to see you this morning, happy holidays and happy thanksgiving at this point. thanks. >> if you are just waking up on this friday morning, we weren't expecting this coming in today but there is a big market drop under way. dow futures indicated down by 787 points the s&p futures off by 78. nasdaq down by 158 it's because covid concerns are once again out there on the horizon. there's a new variant identified in south africa that's been found with a passenger who arrived in israel, as well there are two cases identified in hong kong there are big concerns about the variant because of all the spike protein mutations.
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it has people thinking this will be more transmissible. the question is out there whether it will be able to evade protections brought by the vaccines we'll have a live report from tel aviv when "squawk box" comes right back hey lily, i need a new wireless plan for my business, but all my employees need something different. oh, we can help with that. okay, imagine this. your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, like asap! so basically i can pick the right plan for each employee. yeah i should've just led with that. with at&t business. you can pick the best plan for each employee and get the best deals on every smart phone.
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welcome back to "squawk box. we do have breaking news this morning. global markets are selling off over covid concerns. israel is facingings it's first high strain found in africa. good morning. >> reporter: good morning, the israeli government has been very aggressive at every stage of this infection this morning is no exception they have cut off travel to south africa and several african nations in light of this new variant. as you said, there is one case confirmed here in is central in a traveler who recently returned from malawi. there are two other suspected cases. all three of those people are if
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isolation now. all three of them were fully vaccinated we shouldn't necessarily draw too much from that it's worth knowing the israeli minister will be holding a press conference in about 40 minutes time the but he has already been speaking about this. he's suggested these mutations in the spike protein likely mean this new variant will turn out to be more transmissible than the delta variant. we don't know yet and we probably won't for some time whether it is more resistant to vaccines we probably won't know for a wlielt makes them sicker him they are suggesting it is likely to be more transmissible the statement he put out this morning is designed to get people's attention rather than calm nerves. i'll read a little bit to you the. he says our overriding principle at the moment is to take quick and strong action now until the
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situation becomes clearer. when it does, we'll decide what we are doing we are currently at the thresholds of an emergency situation. i ask everyone to be prepared and to fully join in the work around the clock now, as we spike, the w.h.o. is meeting in geneva about this new variant. right now, it's known only as b11529 if the w.h.o. finds thissing to a variant of major concern, they will give it a fame from the greek alphabet likal far, like delta. the w.h.o. is advising for now that countries don't rush to impose travel restrictions in the face of this new variant but that is not advice that's being heeded right now by governments in europe, in asia and here in israel who are bringing those restrictions in now for justification of the disease. >> i have one quick question for you. we have about 30 seconds, is you
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said there are one confirmed, two others infected. you said they were fully vacc vaccinated a big question around the world what fully vaccinated means. were these people boosted or not? do you know? >> reporter: my understanding is they were boosted. in israel, the definition of fully vaccinated has moved on to three doses. our understanding is they had had the booster as well. >> okay. thank you for that report. we will, of course, keep our eyes on all of it. i imagine we will be talking to that you lot today thank you. in the meantime, the travel stocksing are getting hid hard amid fears of that new covid variant. joining us is brouett keller when we booked you, we were looking alt a different scenario everybody couldn't wait to get out there. this is very early on, it will take a few weeks to find
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anything about this new variant what are your thoughts as you wake up this morning >> it's always disconcerting to find out things with covid concerns people are trying to be as safe as possible. it's so early, it's hard to tell what we know is consumers have become more and more comfortable with traveling, even understanding many of the risks that are out in this space i think we're learning how to live with this and to continue to do the things that people need and like to do. >>r continuing to do the things people like and do i would say anybody living through this is ready to get out there there is a weariness from locking down, not getting to see family or go places. i think so many people were happy to travel to see their families once again and sit around the table i guess this is a reminder of how quickly some of those things can change we don't know a lot about this variant.
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but the authorities in israel speaking bluntly about this and the stockmarket reaction has been pretty blunt as well. it's a slow trading day. we are hearing, though, that the uk and germany and singapore and other nations are saying that they're going to not allow travelers coming from south africa at this point it's a quick reavenlgs how do you react? what do you see in the bookings? how quickly do things like this change >> well, clearly, countries are trying to be extremely cautious with this virus. but, you know, if we look at what's happened historically when there are news reports that come out, serious concerns about new variants or turns in the virus, we've seen people continue to look materialally at the domestic side. this may shut down some international travel between the two countries at first really what will happen is people continue to tuned ways to travel locally and certainly through the holidays, we have seen more families, more
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children and others traveling to be with family and friend as you know i want. in fact, this has been one of the busiest travel weeks we have seen since february of last year, which is compelling, considering many of the concerns and thoughts people have about how to travel safely with the virus. >> about 70% of your business involves last-minute bookings, you have a pretty good finger on the pulse out there. we appreciate your time. we appreciate you being here good to see you. >> absolutely. thank you. coming up, a lot more on all of it. we have today's market sell-off. we will show you the sectors getting hit the hardest. macy's ceo will join us live stay tuned for two very good hours ahead. we are live at market site in time's square.
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dow futures plunging more than 2% after stocks in asia and europe overnight investors spooked as a new variant was found in south africa we'll get you up to speed on what's happening this morning. plus, dr. patel about this new variant and how to stay safe during the holiday season.
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speaking of the holiday season it is time to shop we will hear from the chairman jeff gennett the second hour of "squawk box" begins right now [ music playing good morning, welcome back to "squawk box," right here on cnbc we are live from the nasdaq site in time's square joe is you a i hope you all had a great thanksgiving, though, it's good to say the holiday, that moment seems to be overite now. u.s. equity futures at this hour are plunging the dow off 800 points, nasdaq off 161 points s&p 500 off 80 points. all of this as a result of this new covid variant, which is appearing to be much more
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transmissible and lots of folks starting to think about what it all means. >> it's still very early in what's happening here. the authorities who have identified this and talking about it are showing huge amounts of concern that variant again in south african identified it's now being looked into by the w.h.o. we've heard about two cases picked up in hong kong as well another case in israel with two potential cases around that. mech tirrell has been kind of working the phones and doing this for the last couple of days you told us earlier, this was something you haven't seen this level of concern since delta what's the early read? >> yeah, so this new variant has been identified by south african researchers. it just had so many mutations in the spike protein in particular that are of concern. the ones that are known could potentially be associated with increased transmissibility and the potential to invade vaccines or prior infection or anti-body
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drugs. you can see, the technology is up and some suggest it could hold up better than others astrazeneca could hold up better i want to show you research from yesterday at a briefing that shows why they are so concerned about this you can see they look at the spread of different variants so if you look there, the red that's delta in south africa the blue that you see spiking up there on the right, that's this new variant 3.1.1.59 we haven't seen any other variant successfully what is important is we should look at the overall cases in south africa right now what they're concerned about is they are potentially entering their fourth wave here and starting to see the exponential growth in cases. look at that right now, it is so
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early. we are talking about thattiny uptick right now it's early days. they've identified this early by great science and surveillance obviously, we will see how this plays out. to put this into context there, the third wave was the delta wave they're concerned about a fourth wave they're worried about pressure open their healthcare system they wanted to put the flag up early. the w.h.o. is expected to be meeting today. we'll hear more how concerned they should be guys >> i think the question quickly turns to what happens and how this is going to react to people who have been vaccinated, fully vaccinated i think one of the things we were concerned hearing that the person who has arrived in israeli, who has been identified with this variant is fully vaccinated, meaning they probably have gotten their booster shot, too, that's what israeli considers fully
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vaccinated the same with two likely suspected cases. that's a big question, how long will it take to figure out the science behind this, if you are vaccinated, how long that immunity lasts or if it can stand up against this. >> yeah, scientists are certainly working on this now to understand how well the protections from our vaccines will work against this we seen this do this against any variant that emerges we will see in a few weeks, how quickly the work can be done but we know that the companies are surveilling the new emeshgents of variants all the -- emergents of variants all the time to develop a new vaccine targeted towards a particular variant. i think they've beaten that before, which they needed up ending to do the companies are paying close
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attention to this, the vaccine makers, and can update quickly still, it is such early days we are trying to get a handle of how much of a concern this will be. >> meg, we want to thank you i am sure we will be checking in with you through the story from the very beginning, following the latest moving piece as well. right now, we will get onto the biggest stock movers of the morning on this covid news dom chu has been watching the move >> it's crazy, investors maybe understand what's going on with the current movers in the market to andrew's, to meg's point right now, we may be in the early stages of this possible new variant in south african but investors have seen this story play out before and they're taking the same math, the same blue print with regard to how they're expressing those views in the market. the first thing we'll show you is from a macropicture kind of things and tell you about the stocks moving as a result of those things first of all, there is a bit of
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safe haven asset like treasury bonds and notes in the u.s. that's pushing those prices higher and the yield yields lower to about 1.25% as we see those interest rates fall, we tend to see sometimes some of the bank stocks and financials fall along side with them they're more economic sensitive and tend not to benefit much when interest rates are heading into that down weird trajectory. jpmorgan chase you've and bank of america and citigroup as well and that's the one thing checking out what's happening with oil as well because we got u.s. benchmark and world benchmark prices falling. you see wti crew down between $75. $73 for wgi. many of the energy stocks
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obviously moving on the heels of oil prices to the downside, apa corps, occidental, exxon mobile. some of the decliners. that's another thing to watch. then we have to look at divergence we talked about the work-at-home stocks that benefit from the pandemic and some of the resulting kind of economic situation that have resulted well, we talk about the vaccine-makers, like moderna and pfizer, maybe no surprise they are spiking higher zoom video is up 9%. pell lotop has been a laggard as people go back to gyms d docusign, people have more limited movements, those stocks are benefiting pacoima, all of those stocks a part of the reopening trade, travel and leisure, live event, they are all declining carnival corporation from cruise lines down 10% expedia is down 7% on booking,
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marriott international down 4% live nation down 4 percent as well if you look at the opening trades, that will be a thing to watch. i'm running out of breath, there are so many things to watch. over to you. >> if you think crypto will be the safe place we will look at crypto in an hour before bitcoin was down more than 7%. it was the best performing coin. all the others were down double digits >> becky, to your point, remember most of the repeat narrative around crypto is it has been an inflation hedge. if you have a situation where economies around the world will be perhaps slowing down again, very early stages, but slowing down again, is that inflationary threat going to be as big as it was before more for that reason, those crypto prices are a driver >> we should point out it's a thinly pointed day this is a holiday day a. lot of
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people out there could be machines acting at this point. these are concerning props, something to make you sit up and pay attention. we'll check in, in a bit, thank you. joining us is joe terranova, a cnbc contributor joe, we have seen this play out time and time again throughout the last couple of years through the pandemic you see good news, everybody starts to feel better. then all of a sudden something happens. this is early on the south african authorities saying they want the world to be aware of this. what we heard from the authorities and their concern levels, countries are moving quicker. they'll wait and see what plays out. have you the uk, you have singapore not allowing people in from south africa the eu will most likely follow suit. people will move first and ask questions later. i wonder with this sell-off, is
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this something you jump in and buy the dip or are you more concerned? >> well, good morning to you, becky, happy thanksgiving. i think we will already be repricing risk it began on monday with the dramatic reversal and the s&p and the nasdaq a lot of growth-oriented stocks throughout this week have been correct. this kind of accelerates the process where i think investors and speculate rors are analyzing what the risk will be. so i think the answer to your question, it's dependent upon how levered are you into the market, what is your ability to assume risk and take advantage of potentially some black friday opportunities in the stockmarket, but as it relates to the headlines surrounding the new healthcare concerns, they're not going to go away any time soon so you will be going into an environment where probability is going to accelerate further here in the coming weeks. again, it goes back to do you want to look at a lot of the
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names this morning like zoom, peloton and the cruiseships and see that as an opportunity myself, personally, i don't want to do that, becky. i think you are stepping out a little further into that risk pro fall that you want to. i think you do want to come back there are some names you want to look at. but they're more lower beta type of exposure. >> like what, what names >> well, i think if you are sitting at home right now, first of all, you see netflix is up 2% do i want to go there? yes, netflix has seen an improvement in the balance sheet. do i want to lean into door dash i don't want to do that i this i the healthcare names up significantly. you got pfizer up 5% there has been a dramatic increase for that stock since the end of october it was below $45 tant at that point. you want to look at a pfizer, a merck, an eli lilly. personally, i think today you
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take one stock you've wanted to buy and take advantage of a black friday discount in the stockmarket. i'm going to look at the exchanges. whether it's the nasdaq, interactive brokers or charles schwab i said volatility will increase over the coming weeks. those three will be beneficiaries of that. so one of those names, i'll begin a small purchase in that financial services, one of those financial services companies today. so i think that itself the right way to approach it again, it goes back to risk. becky, i think that overall, we extended the leverage, our risk assumption really was something that was beyond where the comfort levels should be in the wake of the s&p earnings in october. it's a repricing now. >> joe, i can understand your hesitancy when you look at some of the reopening stocks that are move sock drastically today, maybe not being able to jump with some of the travel stocks, you don't know what the outlook s. don't you look at the
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financials, j.p. morgan stack, goldman sachs, those are big movers down significantly. yields are under pressure, too, do you think that's a weird moment in time that will undo itself and go back to normal >> opportunity i'm already long morgan stanley and long bank of america i don't think this changes the course as it relates to the federal reserve. i do believe they are going to taper and you will see tightening in 2022 this is actually that i don't think, becky this has a deflationary effect on economies. this actually might create more of an inflationary outcome because you are potentially going to see the bottlenecks that exist i look at financials, jp morgue isn't a name, i don't know >> just to go back great to see you the issue with the fed, though, is interesting, if you are j. powell and sitting here thinking about this, you will deal with a
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supply chain issue at the same time, depending on how severe this is, you could deal with an even greater unemployment issue and how hend up weighing those things i think it will be fascinating >> i think it is going to be fascinating. also, let's introduce to that the fiscal conversation. i think the opportunity to maybe reach some form of a resolution and actual legislation on a social spending bill that opportunity now becomes a little bit easier. the cost there is some sense of a priority to get that done given the potential healthcare head winds that we're going to be facing here in the coming months so i think there is a lot of complexity on the policy side here but if you are an investor, i don't think you want to deviate from what your prior expectation was coming into thanksgiving, where you knew that the federal reserve was going to remove some of the liquidity you also have to look at the fiscal side and understand that
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there is less of a head wind that will result from that social spending package. you will not see the negative fact consequence so i think that kind of balances it out, andrew and i believe that if you have the playbook in place prior to thanksgiving but was focusing on quality, low beta exposure then i think you'll be okay in the long run >> okay. >> thank you very much, joe. we won't be able to talk this through with you come back and see us really soon, okay >> will do, becky. meantime, as we go to a break, news from biontech pfizer, it's saying it should have data on the new covid variant within two weeks and will then determine if an adjustment in the vaccine is needed that's coming up, after we come back from this break, macy's chairman and ceo jeff gennette will be joining us after the break to talk about retail,
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black friday rush. as we head to break, let's take a quick check at the markets the dow off 750 points, a little better than we were an hour ago. the nasdaq off 120 points, s&p 500 off 72 points. how much is humans making those trades versusal go right ralral-- versus algorithms. a good question when we come back after this.
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check this out futures under some significant pressure this morning. the dow is down 656 poichts. the incomes down by 120 on concerns about a new variant that's out there we don't know a lot about it yet. but it is enough to spook investors at this point. even though it's red friday when you look at the markets, it's black friday for the retailers courtney reagan joins us with a special guest. good morning >> thank you very much i am joined my macy's ceo jeff gennette live from the new york store. we all saw you yesterday at the parade, congratulations for getting that back to normal. i guess the first big question is what were the crowds like around the country as you moved those door busters back to black friday today >> good morning, courtney, it's great to be with you
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the black friday started at the end of october we had a big rush yesterday online strong rep responsibility to a lot of our values. today we opened at 6:00 a.m., in all of our stores. the crowd size from 2020 is up the first hour of business was quite strong we're really encouraged by the track we're seeing it will be a good black friday >> you expect it to really see sales pick up here as the weekend continues. we got if you data, and they say they're seeing a 52% increase of searches for beauty actually topping anything electrical this black friday what are you seeing when it comes to beauty for macy's shoppers this year >> certainly beauty when you look at yesterday's business, which was only online. the beauty and fragrance gift sets were some of the best
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sellers. fragrances has been bulletproof. so is treatment. color is coming back now the feel are returning to normal life. and so it's not surprising yes, beauty is one of the standouts this holiday season. >> jeff, of course, availability and instock or out of stock inventory is a big topic of conversation across many dinner tables and, of course, television studios around the country. how is macy's availability looking here today so far for those door busters especially >> yes, so we're in great shape. we started early at the beginning of the pandemic with our supply chain and worked with our overseas suppliers we diversified the ports we were into, we weren't as reliant on los angeles and looked at smaller ports, we're in great shape as i said in the third quarter earnings the inventory is up 20% from 2020 that looks to be up in the mid-20 in sales that we
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anticipate for the fourth quarter. so we're not going to disappoint customers. we will have all the gifts they expect from macy's online and in stores when you look at the last mile, we will have a later ship dawn online than last year and those last-minute procrastinators, we will have lots of stock in our stores ready for those last-minute gifts. i feel strong about the supply chain at macy's inc. >> i was going to ask you about the delivery that customers should expect or earlier planning it's not all up to you you certainly work with carrier partners to get us many of these packages if ha consumer is not coming to the store as to pick it up, for instance. >> clearly, this is a big opportunity for holiday this year our partner is ups, we're working closely with them to insure we don't disappoint customers. i look great when i look at our unit demand, we're in great shape. so customers will confidence can
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shop with us and know it will be under the tree at the appropriate time for everybody on their gift list >> we talked about macy's having a good value and there is discussion about inflation levels and president emotional levels not being as deep as they were in years past what is your strategy at macy's, what can shoppers expect for the black friday weekend, are the promotions less deep than they were in years past >> let me talk about inflation more broadly we certainly have been through those cycles before. as a fashion retailer, this is something we're quite practiced at but this time we have two big things in our arsenal that are going to help us combat inflation so we don't disappoint customers. the first one is we work with our overseas suppliers and ensure we have the best value are createling, working with fewer suppliers. that's keeping our costs down. then when you get here, we got a
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lot of data analytics we are putting through our pricing signs. instead of doing the broad based promotions, we're doing that for all our personalization strategies then when we do have with a lot of fashion goods, that we mark down, we're doing that at an item and store level so that will maximize mar jens so we're testing every day hundreds of items in terms of how are customers responding when we have a higher ticket we're satisfied that our strategy will take us through 0 2022 >> i don't think many of us seen the markets selling off, watching the shutdowns that 23 are already hearing from places like the uk and germany and singapore saying they're not going to let flights in anymore from south africa. this is not a place any of us you wanted to go back to, to what it could potentially mean for the supply chairperson what is your reaction this morning? >> the reactions we are
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watching, what we got, we went through alpha, we went through delta, now we got if you variants and reading the news like you are reporting so, health and safety is the number one priority for us with our colleagues as well as obviously our customers. we have been playing with this for the past almost 20 months. so we're well practiced at this. we're going to make sure we're ready. obviously, we got a big engine online where our customers feel safe in shopping with us we have a big engine in curbside pickup we want to make sure however and wherever the customer is in shopping, we got the strategies to support them. it's alltoo familiar for us with what we're going through right now. we will be ready for the next wave, whatever that is >> it's a busy day for you keep us updated as you go through today and the weekend. thank you for joining us andrew, back over to you. >> thank you, courtney, a busy day for you as well. we look forward to following your coverage throughout the day. meantime, a lot more on the
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market sell-off. take a look at futures right now, the dow off 783 points right now. nasdaq down about 140 points the s&p 500 off 76 points. as we head to that break take a look at some of the leading stocks that are taking the dow be a bit lower crypto is down as well you are looking at boeing, chevron, j.p. morgan, merck, verizon, leading lower ju aawk" will return in st moment as we try to break down owl of this news this morning. -! -i love my gold jacket, but that aflac blue feels so right. when you feel right, you coach right. i know that's right! prime never believed in double coverage, but health insurance and aflac...is money. ♪ must be the money ♪ and i know how coach prime feels about money. -aflaaaac. -♪ aaahhhh ♪ now that is what this jacket needs. ♪ must be the money ♪ get help with the expenses health insurance doesn't cover. at aaflac.com
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as we focus on the new covid variant this morning, some encouraging news out on less than encouraging news on that merck therapies. they say the covid-19 pill reduced the risks of hospitalization and death in a late-stage study merck shares have been up higher they have been positive. on this news, they turned around and are down by 3.5% the earlier study on this showed earlier numbers, the efficacy was close to 50%, this lower
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efficacy rate is something that's a concern by the way, the pfizer pill had a higher efficacy in its initial trials we'll wait to see what happens with that, too you can see the pressure and how they were trading in positive territory before this news came out. andrew >> thanks, becky meantime, still to come, shoppers will be hitting the stores we will see, there will be one thing missing in the aisles this year, that is workers. we will take a close look at the labor shortage how it can impact results this holiday season reports that new covid variant found in south africa against travel stocks getting hit and hit hard, royal caribbean down 10%. dell that a little over 7% expedia and airbnb as well, meantime here are some of the stay-at-home stock names that seem to be higher. some up 8% peloton up 5%.
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netflix up 2%. doorshda 3%. talking about all of it when "squawk alley" returns after this
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welcome back to "squawk box" this morning
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with shopping bags backing up, retailers are dealing with a hiring shortage. we are joined with more on that, good morning. >> reporter: good morning. so you wouldn't really know from this mall here that markets are tanking. we came to find out if there is less staff members in stores just lastmonth alone, 940,000 seasonal job postings were available in october however, even though it's the highest amount in decade, they're seeing a decline in seasonal hirings down 9% compared to last year when it was low. you have free iphones, all kind of perks companies are picking up yet, even in this mall, there are hiring sale or signs all across the mall. for example, macy's is offering a $3500 referral and nordstrom offering $600 bucks as incentive pay for new customers.
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however, it seems the workers just aren't there or they're not searching. the share of holiday-related searches per million on employment site indeed was down 21% compared to 2019 pre-pandemic child care is just one of many hurdles. >> that also it's been extended and enhanced unemployment benefits, which have expired but gave people the ability to fought have to go into some of these potentially dangerous jobs for a period of time then we've seen a lot of baby boomers decide to retire. >> reporter: as we talked about, becky, andrew, we no ethe labor crunch means the ball is in the employee's court according to experts we spoke to, retailers will have to offer higher pay or be extremely flexible in order to insure we have the wonderful, positive, holiday shopping experience we're used to. and this mall is jammed.
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it opened at 6:00 a.m., back to you, guys. >> christina, that was going to be my question we have all been wondering, especially as we have been reading about this new variant and you see the sell-off in terms of markets, whether people will wake up, look at the tv screen, and say to themselves, maybe i'm not going to the shopping malls maybe i will order online that doesn't seem to be the case just yet. >> that is definitely not the case here. andrew, there are lines still outside some stores. apple hasn't opened yet. it opens at 8:00 a.m i would say the majority of people here are very young you got a lot of teams here. the team stores are having blockbuster sales today. they're picking up stuff at forever 21 behind me as an example. yes, the mall is packed. there are still lines outside stores i think a lot of younger folks may not be paying attention to what's going on with the dow down 780 points. >> christina, happy
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thanksgiving appreciate it. >> reporter: you as well, thanks when we come back, a if you covid variant found in south african. the future itself much lower this morning on that news and the shutdowns that you are hearing from places in europe where they will not accept travellers from there anymore. we will talk about the sell-off right after the break. then we will be speaking to former white house dr. kavita patel, about the delta variant and much more. "squawk box" will be right back. so it takes less fuel to bring people together... ...and make faraway places feel a little closer... ...with engines that power planes more efficiently. because seeing a better-connected world isn't far in the future. we're building it... now. ge. building a world that works.
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more than 2% a. drop of 800 points right now this comes after big stocks for asia and europe overnight let's bring in kevin simpson, portfolio manager and a.j. owen investment strategy at investor solutions. gentleman, the question this morning is what's happening with this new covid variant, how big of a concern is it kevin, do you think this is a market reaction. overreact, a knee-jerk reaction? would you buy the dip? >> i certainly would, with respect to futures trading red, we seen this playbook before unfortunately, we have to learn
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to live with the covid, just like we live with the flu. there so many mutations, variants this pullback i think is an opportunity to add to your position >> a.j., what do you think >> i have to agree with kevin. i think ultimately this is a buying opportunity we have to look at friday is the day after thanksgiving, simply probably not a many traders on the desk, with an early close today. so potentially lower liquidity is causing some of the pullback. what the reaction we are seeing is a buying opportunity for investors. we have to think long term covid will be with us. we are seeing a pullback in tech, which is becoming the safe haven in situations like this. what i would still tell investors to do is invest in large cap quality, growth names that have the potential to navigate through potential inflationary pressures and have the buying power and staying power to move throughout situations such as this.
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>> so that's interesting you are saying you would buy the dip. not necessarily some of the stocks that have sold off the most, if you look at the travel stocks, the learnier stocks, you are talking technology names and other big well-known companies that maybe aren't as directly impacted by the pandemic >> yeah. i think with the travel names or so, there is a bit of caution there overall, business travel hasn't come back to the level we saw pre-pandemic we will see changes in the way companies operate for the most part even if we look at the early stages of the pandemic, ecommerce and big box retailers have the ability to leverage our ecommerce platforms more those are the ones that perform better i think when we think about consisted of going forward, for short term, we have to think about how we navigate with it through our environment. i think investors have to think about companies that have to adapt and change whether it's a hybrid model using technology to their advantage. to my point, large cap quality
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had the ability to withstand some of the turbulence we'll see, whether they're supply chain issue inflation or the headwind that covid is showing itself to be right now >> kevin, there are so many areas, sectors under pressure this morning oil prices down significantly. as a result the oil stocks have been under some pressure, too. that's because people are thinking, okay, if there is less demand that this is not a place you want to be right now the other areas we seen hit crypto and the financials as treasury yields have come under pressure the financials have been down significantly this morning, too if you were a buyer of the dip, where would you pick your places >> i mean, these names you have up here are perfect, becky if you look at oil, chevron is down big this morning. we will be adding to it. you mentioned fms, both j.p. morgan chase and goldman sax will be adding to it if you look at the strong retailers, big box chains had amazing targets, amazon, target,
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home depot it's not a sale of all stocks doing well it's have and have nots. we saw nordstrom do poorly this is an opportunity for investors to take a look at high quality names. i would not be afraid to buy the dips here. i wouldn't go all in like anything else, it's a gradual situation. we're getting used to this covid mutation as i said earlier, just like the flu, we will have to live with it forever at this point if you have high quality names you take advantage of it when you can >> you mentioned the big box retailers. they had great results last week the surprising thing is some of the stocks sold off anyway as they talk about reinvesting or spending more money to make sure their stores are able to continue like meet up to expectations that didn't give some pause to some investors especially if you are talking walmart or target. that would be the option for you, you'd jump in >> yeah, absolutely him when they have numbers like that, they blow it off the charts. you are look at the home depot
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and lowes as well, christina's segment, a minute ago, the malls were pack. there was young people thinking the, hey, it is black friday when i was in college i don't know if it was sociology or economics. i don't know if when you were at rutgers. we coined the term conspicuous consumption. i pension that debate, it's so important. consume werism is rampant. like we've never seen before even despite what's happening with covid, higher prices, supply chains. everyone is consuming. we're buying, buying, buying, it's telling me what happens with covid, what happens with the economy is not something that's going to put the consumer at per im. if anything, they're putting the economy on their back. so i want to be buyers of these big names. i want to own companies that will invest in themselves. and i think when you are talking about quality, just like aj said, these are opportunities for us to be buyers not sellers. >> kevin, aj, thank you both
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>> meantime for more on this new covid variant, we are joined by dr. kavita patel, the former white house policy director. doctor, good morning to you. let's start with when you heard the news, what had you been thinking >> yes so, look, i actually agree with the previous segment about how to kind of take this into context. having said that i always have my concern heightened a bit when i hear things like 30 point mutations on the spike protein compared to two or three on delta and some of the other strains that we were concerned about, the new variant so i do think the world health organization is assembling an emergency meeting here in the uk taking precautionary measures are the right thing to do. it remind me about our lack of, we're doing genetic surveillance in the united states, predominantly delta. it remind me to make sure we understand a spike in the protein in the variant that we are seeing here and that we have some of those things protected
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against. so, but all in all, i'm going to remain to reserve caution, reserve concern and be kaucautis with an immune escape phenomenon does our current regimen protect us against this new strain i am hopeful it will. >> doctor, the news 23 heard this morning is one confirmed one case in israeli and two suspected people were people fully vaccinate, not by the definition in the united states but the definition in israel, which is boosted. >> yeah. we know they use mrn rah vaccines so, obviously, that concerning, but it is one case i'm not trying to diminish it. i do think until we see we had that case and several cases in south africa that are quite concerning in vaccinated individuals and we're watching that the uk has their kind of heightened awareness because of their own patterns of migrations
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from african countries we also note, i want to point context. we have the south african before the greek naming system. we had variants present and we seen spikes, not vaccinated individual entirely but spikes of cases so we can't wait until the data is in to take precautions, which is why i'm saying that i think at least in the united states i wouldn't start, you know, putting in broad policy and lockdowns and getting out ahead of ourselves but i would just say, number one, the urgency of getting everyone vaccinated. you have to imagine, it feels like the virus has a lottery ticket and it will win with dell that it felt like it won. we have to see before we start thinking but it also does, it reminded me, i tested a couple manufacturing frpd, started to think about tailoring our vaccines for these variants does not feel like a bad idea right now. >> doctor, from a policy
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perspective, though, at what point and is there a point you think the u.s. should say, no flights in, no flight out, that kind -- at what point do those types of things start to happen or at least get on the radar >> i think they're already on the radar. there is autopsylways every tim talk about recent coronavirus threats, we always talk about travel restrictions. however, i will say the administration january deadline for incoming passengers from other countries, the u.s. to be fully vaccinated according to w.h.o. vaccines is the best step so i don't expect any travel lockdowns in advance of that unless we see uk data confirmatory remember patterns have a lot more to do with k50i7d of the gl -- kind ohrt f the global from europe, primarily we're hoping they don't have a surge of what i think will eventual will be called the new
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variant, w.h.o. meetings, eu taking action and thinking about the u.s., i don't anticipate policy on top of that incoming vaccination unless we see threats that this is an immune escape variant, which, of course, is probably everyone keeping me up at night and others up at night too soon better to have everyone get up to date on immunizations and to think about broader policies such as even domestic vaccine requirements advancing what is controversially discussed at osha >> hey, dr. patel. we know south africa is coming out early saying they don't know how contagious this is or how deadly it might be there is enough to concern them to raise these alarm bells and make people take a look at it. my question, is you mentioned we're doing testing here how good is that testing we weren't great at that early on would we know if this was here on our shores?
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>> we are doing more genetic surveillance early on we were taking pcrs less than approximately 2-to-3% of the samples in doing genetic surveillance the addition of lab core and quest where the majority off our pcr samples are being run through in that process, not limiting it becky to academic labs, which is what we had done prior to fall 2020 is critical having said that, we now know there are a lot more home tests. the three of us have been talking about home test was. we hope people that get a positive home test get a confirmatory pcr, we should be doing a better job if i send in a pcr at my clinic, that i do often. i should be able to tag that as a vaccinated individual. because those are cases that need to be elevated and escalated and always genetically sampled. we are doing 10-to-12% of the pcr tests getting genetically
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sampled. we seen delta dominate having all of this remind us we cannot rest on what we assumed and that's i think where we have to do more and pcr tests, by the way, it will be, we will now know post-holiday thanksgiving, we're already seeing a request for more pcr testing we will know if that storage recrates too much de3457bd. >> how quickly can you gather we will know one way or another how severe this new covid case new variant is >> yeah. so now that all countries and especially with the w.h.o. i expect putting out some advisories for countries to do some more surveillance than we're doing now. i do think that it usually takes a cycle, andrew, of two-to-four weeks to better understand is this a more infection version of the virus, which we would expect or is it something that you are pointing out with some of these small numbers of cases that are
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evading our current mrna-based immunity, which we know has higher ev efficacy >> we were talking about merck, the anti-viral, it showed reduced hospitalizationings and deaths by 30%. that sound good. the earlier study suggested 48 percent. so not as good as we thought earlier on not as good as the earlier results from the pfizer pill what is your take on that? >> so a couple of things i this i that, oh, boy, i got a thanksgiving crowd i think with merck pills it seems as they love "squawk box. we got some young "squawk box" fans i think with the earlier studies, we knew that we were unvaccinated individuals we can now see the replenishing as the full data set they love both of you. >> hi. >> we seen the whole set it's not surprising. to get vaccinated. it's not shocking we are seeing
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a reduction in the effect. but i will tell you, even with this kind of -- i don'tcall it disappointing news i think it's level studying. at the end of the day, vaccines, number one, the anti-virals will be help. i suspect what we will see given the different chem stris and properties between merck and pfizer anti-viral pills, we will see different use cases and applications that's what i'm more interested in seeing the subset segment of patients in which this data might be more effective. for example, people of a certain age with certain chronic conditions we know with the freezer antiviral pill, which is a unique chemistry combined with an anti-viral type of drug, we know that will likely prove to be a more efficient way of giving people who were recently diagnosed outpatient medicines that's easier to take. it's higher likely pfizer will have more demand, like all
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medicines when there is a reduced efficacy that we find use cases for which that patient find it more efficiently used within >> hey, dr. patel, two things. first of all, i want to say, we all feel like families given the time we spend. there are no apologies whatsoever i hope the audience feels this way. the thing i was going to ask you, you seem to have an optimism the vaccine we currently have will be able to deem with this new variant i was curious where that optimism came from i hope you are right i ask only because it appears there are so many different mutations to this new variant and given what we are seeing in israel and elsewhere, that it's raising at least at a machine m -- minimum and worse genuine concerns >> yes, it has more to do with this is a reminder to myself,
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honestly, with the mrna technology for decades, we have been trying to figure out to make the mrnaing thenology more stable to deliver a vaccine this is not our first run. we tried with with versus v 1. it has been successful in cancer i am hoping the monoclonal response will be effective against most of our strains. but i fail to say, now we can take that same technology and tweak it for different variants in a much more rapid fashion that's why i'm optimistic. >> dr. patel, thanks so much we'll let you get back to everybody and we'll see you again soon >> thank you when we come back, it is one of the biggest days of the year for shopping we will look at how blikd is faring for the retailers amid the labor shortages. that's next. plus, much more on today's big sell-off how it might impact you and your money. take a look at the biggest losers on the nasdaq you got a lot of other names,
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travel-related names under pressure today trip.com down by 6.8%. marriott off 5.6% in booking holdings, down by 4.2% stay tuned you are watching "squawk b." iss bcox today, your customers want it all. you have to deal with higher expectations and you have to lower wait times. with ibm, you can do both. your business can unify apps and data across your clouds. so you can address supply chain issues in real time, before they impact your bottom line. predicting and managing operational issues that's why so many businesses work with ibm.
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good morning, wall street and main street waking up to breaking news today a. new covid variant was found in south africa questions swirling about whether vaccines will work against it and how easily it might pass from person to person. global marks spooked by the news, we got complete team coverage as the final hour of "squawk box" begins right now. >> good morning, welcome to "squawk box," right here on cnbc i'm becky quick along with andrew ross sorkin joe is off today but on this black friday, it's a pretty red day for the markets you can take a look at the u.s. equities the dow is down almost 800
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points we watch bigger declines there s&p right now indicated down about 80 points. the nasdaq indicated off by 173. it's not just equities that are moving just about every one of the major investable categories are moving one direction or another. treasury yields have been under significant pressure the ten year note is yielding 1.45%. on wednesday of this week, tuesday of this week, we were thinking we were headed back towards 1.7% as yields have come under pressure on the expectation maybe the fed won't raise rates as quickly as expected or taper as quickly and ferociously as expected. that's been a lack of the financial stocks they have been under pressure, too, then you check out oil prices, you will see right now wti is down 63%. what the threat to release oil from the strategic petroleum reserve could not do, the idea of a hit to demand is hit
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significant lip. brent crude is down 5.6% the travel stocks are taking it on the chin, some of the biggest decliners we've seen have been in this aery na. united off 8.8%. southwest and alaska air down, too. by the way, this is happening 07b the same weekend we are seeing the heaviest travel we've seen back to pre-pandemic levels stay-at-home stocks have been picking up this morning. pretty significantly in some situations zoom up better than 8% it had great earnings last week. people taking a look to figure out what's happening with it this morning, peloton and net 36 and docusign all significantly higher. >> we have complete coverage of this story dom chu is watching the tape we want to begin with meg tirrell and what we know about this new variant meg. >> reporter: hey, andrew, the main concerns with this new
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variant are the number of mutations on the spike protein more than 30 identified there. some of which could potentially be associated with increased transmissibility others potentially with the ability to evade vaccine protection now, i was speaking with moderna ceo this morning about how quickly they could ramp up a new vaccine construct potentially here he noted they have been able to do this before within 60 days. he said the question of the timing there is the regulatory process from that point. you can use anti-body data to clear a new variant vaccine or do you need to run more studies and wait perhaps two months there? he said the manufacturing on top of that would take a couple months but the companies can do the quickly w. rehearing from biontech they expect within two weeks to get laboratory tests on how well antibodies neutralize this variant they say pfizer and biontech have been able to adapt the vaccine within six weeks within 100 days in the event of an
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escaped variant. so they've begun clinical trials with other specific vaccines to alpha and delta to collect tollerably data. guys, what we're showing you is data from south african researchers. we were showing the blue section there, how quickly this variant has grown in prevalence in south african. looking like it could potentially compete against delta. what is really important to remember is that this is just very early days. there are not many cases of this, although, they are increasing quickly south africa is worried about a potential fourth wave, other countries worried about it as well guys >> in terms of therapeutics, obviously, we have the merck drug being a little less efficacious if you will than originally expected. do we think that those therapeutics would work against this new strain? >> the expectation is that they
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should you know, the antiviral drugs, pfizer's got to be a pan coronavirus druchlg it's not the different variant of this coronavirus. we haven't heard about that. it will take time to definitively say things as well, merck is acting to the expectation is it shouldn't be adopted by mutations like this but we will be needing to see the data those shouldn't be affect ltd. it's the anti-body drugs folks are worried about. specifically regeneron there is some thought that astrazenecas could hold up better with the variant because of the way they're constructed to target the spike protein. but, of course, we'll be waiting for lab data on that as well >> meg, thank you very much. let's go over to dom chu he has a look at the stocks moving the most this morning it's not just stocks, dom, so many asset classes that are moving here. safe havens that are taking
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awful. others that are really getting knocked around. >> there is a chicken and egg argument of what is delightful what is it the individual moves driving the macro-markettors other way around we'll start with the picture and a funnel approach. on the macro-level, some of the markets are moving because of the fears that this might be one of those situations where global economies start to stall out a bit and take a leg lower given what's happened with this new possible south african strain of delta or the consisted of variant. the ten-year note yield, as you pointed out earlier in the top of the show here had been closer to 1.62/ .63%. buying up samps, like the treasury pushing those lowers. gold is up 1806. safe haven bid meanwhile, are you seeing the dollar lose value against safe haven currencies, like the yen, the swiss frank.
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yet in a swiss franc, crude oil down just on fears the economy might be slowing down. if you take those and translate them into the stock-specific moves that we are seeing, the reopening trade, those that are based on economic sick lic cyclicality. post-covid trip adviser down 9% wynn resorts, down 5%. theme park operators six flags down and darden restaurants down 4.5% as well during last wave in covid the stay-at hmm home stocks, netflix one of the biggest gainers up 2.20% roku up 2% teladoc up 5%. doordash up to.89%
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etsy higher, 1.97% one thing to watch for, among the pre-market sea of red, specifically like clorox one of the biggest gainers up 1.5%. clorox remember during the first kind of lockdown wave of covid was a massive gainer and sense then as we've recovered has been a sharp mover to the downside. this is not in anyway shape or form going to get us close to where we were at those higher levels still, watch consumer staple names like clorox. it's up big in the pre-market trade. >> ma'amiar movers maybe we should talk about bitcoin. inflation, we have been talking about bitcoin being an inflation play instead of going to gold, a lot of investors were going to crypto it's not a safe haven today. so this entire category once again sort of evading any
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definition of what it is and why investors like it. >> to kind of put a finer point on that as well, becky one of the things up pointed out that's very true so far in the last hour and so far today as well, if you look at bitcoin prices down 8% it's a dramatic move it's not as big as some of the smaller coins or tone tokens out there like etherium, solana, cardano, others like that. when we talk about the relative performance of crypto currency, it seems bitcoin is yes down if value, not nearly as much as the smaller coins and tokens in that entire crypto currency ecosystem. the question becomes whether or not the massive gains we've seen in some of the these alt coins so to speak over the last six months maybe a year to this point, get some crypto traders who thrive on volatility to leg into long positions, that's one
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thing i will be watching for, some of the inter-day action like eherrium and others joining us is the founder of sky bridge capital anthony scaramucci happy thanksgiving to you. but we are waking town some concerning news, i am curious how you are thinking about that news and considering what's going on in the marketplace this morning? >> well, the health and safety leave the lead to the scientists the market stuff i would tell you, andrew, it's black friday things are on seam you have to take a step back one, will the fed tighten and taper as aggressively as they were thinking about. the answer to that is no number two, are stocks on sale obviously, they are. if the fed is not tapering, this is a buying opportunity and then the third piece would be related to crypto. what dom is basically saying i'vealways looked at it as an
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early technology asset related to value, related to crypto currency in the sense it's currency but it hasn't fully adapted yet. are you talking 3% saturation. if you and i were on this conversation a year ago, bitcoin had 100 million wallets. glass note is saying there is 240 million today. that's great growth. i think there are buying opportunities all around have you to if you don't have leverage on, this is a good day for you as an investor >> the question i'd ask, though, is on a day like today, given what bitcoin, for example, is supposed to represent as a hedge against inflation, why is it -- by the way, doing, not even as well as the airlines >> well, you know, i don't think it's a hedge against inflation at this moment in time i think long term, if you got to a billion wallets, 2 billion wallets and bitcoin was in what i would call a stable zone,
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think of amazon, 20-plus years of amazon. this is amazon in the year 2000. so this comes with some volatility it comes with a lot of fear and uncertainty. so that's the reason why it's down however, you know, in the research that we've done, it doesn't necessarily track the nasdaq either. i think this is a risk-off situation right now. bitcoin and other crypto currency is being volatile it's washing out some of the leverage which i think sets up a pretty nice first quarter, andrew so i would love to deba it to people that think that bitcoin is inflation hedge at this stage in bitcoin's evolution i don't see that as being the case. >> anthony, you were talking about the fed earlier. how do you handicap what this does to this bill in washington right now? to the extent it has any impact on that debate >> well, i think the sides are locked in. so i don't think necessarily think it has a big impact and i also would remind people we have
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these anti-viral medications coming out from merck and pfizer they will be able to adapt the vax. so we could be sitting here a month from now recognizing that this is a problem. but it's not the problem that we had back in march of 2020. so i don't think the politicians are going to be move one way or another by this. it's a scare there is a lot of leverage in the market there is a lot of over valuation and extension in the market. and so this is trading this air pocket right now i would recommend to people that don't have leverage on, look at this as a massive buying opportunity. especially for bitcoin and etherium, frankly. you get a chance to buy this before christmas at a 7/8% discount if you believe in the long-term fundamental also as we do this is a time to be buying if you get old enough, andrew, like me, you don't panic you run towards situations and look for the opportunity so it's sort of a mini march of 2020 if you will >> i think that's a pretty good
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assessment of what we are seeing this morning this idea that the grand reopening and the freedom that so many people thought they were on the verge of could get put off for months this is early days we don't know what will happen with this south african variant. but oil prices i think have been particularly interesting today two big macro-things here. what is the demand for oil and the stocks that relate back to that what is the fed going to do are they going to raise as quickly or taper or does this put that on hold i think all of the major moves you see stem from those two issues, if you look at it from that perspective, would you buy the financials today would you buy any of the energy stocks >> so we would and i guess what i would say to you, becky, think of the cultural implications as well, the globe suffered this 20-month lockdown. you got lots of people vaccinated they're mosque around now. i made a trip to the middle east
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i just got back from europe. i don't necessarily think we will have this stringent marshall-like lockdown i don't think the citizens of the industrial nations want that or are prepared for it so if we get some scientific be right back i break through here reamed to adopting the vaccine, people look back at this and say this was a huge buying opportunity. now, if i'm wrong and we're going into totally different direction, you know, obviously, i'm, you know, this would be, you know, high prices would be buying i don't think so, becky. you know, the fed is going to continue to pump the luck widity you got the scientists working on this thing to create an adaptive therapy and i like the odds there sky bridge likes the odds there. our economic team, we're ding and buying some as soon as this thing opposite. >> anthony, so we're looking at a wall of stocks that are down a. wall of stocks that are up. you are looking at the zooms of
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the world, for example the pelotons powering higher you are saying that doesn't make sense? >> no, you know, it makes sense for mr. market you and i are old enough now we know the market has that schizophrenia and manic depression it makes sense in the short term let's look out to june of 2022 is that going to make sense? what is the landscape going to look like over the next three months the market was looking for some information to cause a correction and a sell-off. they got it with this new variant. but, andrew, just think about all the macro-factors of fed engagement the reappointment of jerome powell the notion we le have some infrastructure spending and possibly this larger spending bill come through. you know, i think we're going to be just fine i think overreacting here would be consequential to your portfolio long term. we could have an intellectual discussion about leverage, by the by a a. lot of people are levered up
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wildly bullish they have never been smacked in the face like i have over 30 years of market par tis makes. i would tell them, run the thing about leverage you look across sky bridge's portfolios, we have no leverage in any asset, the crypto currency portfolios, our crpt. etf for the sky bridge core fund series g i will tell people, knock off the leverage, particularly against late stage in the senator jo >> anthony, you can tell from this we have been asking this question all morning, how much of the trading we are seeing and some of the results, this is obviously pre mark, is a function of human beings who are awake and trading and how much of this are algorithms and how much that matters? >> well, i don't think it matters. and i can only guess at that it's probably the preponderance is algorithms. the preponderance is stop losses that further engage stop losses,
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of course, you got the leverage players. they have to get out they have to meet market calls you have people waking up overstuffed with food and looking at their bloomberg opportunity saying this is sort of black friday in the markets there might be a sale at macy's, there is also a sale going on here in the stockmarket and crypto currency markets. what am i going to do to position myself to take advantage of it. if you don't have leverage on it, this is a very good bet. >> happy thanksgiving. >> happy thanksgiving to you guys >> appreciate it thanks when we come back this morning's other big story, retail. we're going to talk to a top toy ceo right after this first, though, as we head to a brake, check out some of the biggest dow movers today we have been talking about is this, this morning boeing is the biggest declineer. it's down as all the travel stocks out there, it's down by 6 and a third percent. chevron down three and three-quarters percent on the
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weakness we seen on ti american express, goldman sachs, each down by more than 3%. procter & gamble down by 1%. stay tuned you are watching "ua bsqwkox," this is cnbc this is cnbc >>invest in invesco qqq, a fund that ess to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq
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. welcome back to "squawk box. take a look at the futures we are in the red. nasdaq off 55 points s&p 500 off 76 points. all of this a function of a new
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covid variant that has been found in south african now some found at least one confirmed case in israel as well, stay-at-home stocks. let's show you what's happening on the 14 side right now zoom video up about 10%. peloton powering up 6-and-a-half percent. teledoc health up 7% so lots of things moving this morning, becky >> thanks, andrew. supply chain bottlenecks may have finally been easing, will that new variant in south african hurt the retailers again? joining us is isaac larian that makes little tikes toys and others, isaac, we spoke with the ceo of target last week. we talked about how their toy sales were up 20% after being up 30% for that same quarter. we know this has been a huge arena when parents can't travel
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and go out and do things, they buy toys for their kids. so it's been an incredible time. how are you prepared for the huge demand you are probably expecting this holiday season? >> good morning, becky, thank you for having me on this show yes, there is a major, major demand for toys, but due to the supply chain bottlenecks that we have seen throughout the year, unfortunately, there is going to be a lot of empty shelves, a lot of toys are not going to be as available come a couple weeks before christmas and that's going to be a problem. mga has toys, dolls that sell for $10 all the way to $200 and omg took us the price house. we are only able to meet about 60-to-70% of the demand. there is a problem. >> you talked with us in the
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past how you don't think inflation is going to be transitory and you all have even had to open new factories in mexico to try to find workers for some of these things what do you think when you hear the news this morning that there is this new variant out there? it's early but raising some alarm bells in the scientific community around the world >> yes, becky, i haven't slept i have been doing toy business for 43 years i have never seen something before the little tikes is the largest standing after the toy fact ory. we cannot get enough laborers to work on the factory floor. so we opened a site in mexico. basically, we took the work to the jobs, the jobs are available to meet the demand but it is really challenging you talk about inflation our charts are off 23% just in
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manufacturing. the transportation costs are up 300% so, out of this figure, go through the pricing and end up paying for it. >> you say you can only meet about 60-to-70% of the demand for your toys right now. we heard a lot of people saying they think things are improving. we seen the worst of the problems in the supply chain is is that what you think? >> it is too late. easing, too late to live in. because about 30 days left to christmas. are you not going to get that merchandise on the floors of target, walmart or amazon, et cetera, in time for christmas. there will be a lot of merchandise of january, because they didn't make it to the throws of these retailers before christmas. so, when you hear that things are getting better, well, it's too late the patient is dying
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>> so, if the toys get there too late and there is an inventory glut come january, does that mean that we should anticipate seeing some big sales come january if the retailers now have all this merchandise after the holiday? >> i believe there is going to be a major sell on inventory coming the first half of next year with discounts, et cetera it also means it is not going to be opened to buy it will not be ordered for the factories or toy companies, only good companies that make product. and with inflation, and also lack of demand, we're going to get into a recession in my opinion. >> oh, gosh. what are you doing to brace yourself for that? >> go too the gym. doing yoga so i don't have the stress level. >> maybe some meditation, too. >> yes.
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>> i know that this is such an incredibly busy time of the year we appreciate your time today and hope to have you back as we get to the other side of this and maybe see some more. isaac is the ceo of mga entertainment, the toy company, thank you. when we come back after this we will have a lot more on this morning's global sell-off. we will talk some mark wtests. weill do it right after the break. stay tuned
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. do you futures plunging more than 2% after big drops for stocks if asia and europe overnight because of that new variant for covid that's been discovered in south african and some of the south african nations. right now, dow futures off by 815 points barry knapp of ironside's macroeconomic is here. so is davis wright, decatur capital founder and ceo and cnbc contributor, let's start walking through when you see this, when
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you wake up, we weren't expecting. what was your first reaction >> well, i picked up on it last night after watching first seasonal viewing of christmas vacation and popped in and looked and saw this was down all this much. listen, i really think that the variants various ebbs and flows of the waves that we've gotten haven't affected economic activity as much as people think. certainly the markets will react to it. even if you looked at the gdp numbers last week, you saw gross domestic income, which cap cures business cycles better than gross domestic product, adding up the income of households and corporations, actually expanded by 6.7% in thatthird quarter at this point unless there is something far more severe here, i don't think it will have that much impact on economic activity so my inclination is i'm probably not as bullish this morning as the mucc is
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i'd be inclined to for sure buy energy and some numbers as well. >> because they have been steep reactions in oil prices and watching the ten-year yield, financials reacting to that. that's where you would be jumping in first >> right it looks to me like we have serious uptrend going on in yields because the economic activity is getting better, because the fed is liking to accelerate the taper a. whole myriad of reasons why rates ought to go higher that's good news nor financials. more than that, they're benefiting from increased credit demand the credit cycle has certainly been a positive for them you got valuation on your side it's the cheapest sector energy has positive revisions. the release of the spr to us is i don't know i'm trying to catch my word here, it's less than two
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days it's not a significant event inventories are tightening unless you really bring economic activity to a halt, the energy mark will get tighter and tighter. policies in your favor for being long energy stocks as well so those two sectors stand out to me. those are the ones getting he it the worse. so that would be where i would be inclined to try to take advantage of what is probably an overreaction >> how about you, what do you do to this in >> you know, i agree, because what we're looking at is the if you have to determine if you are a long-term investor or short-term investor. if are you a short-term investor, you may have leverage on so this is where the activity is probably happening this morning. if people woke up this morning and saw what was happening, they had leverage, they had shorts on, that i have to cover those but if you are a long-term investor, this is an opportunity to look at your portfolio, i started watching "squawk box," i
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started asking myself, how much was i inveseyed in the trade and what is that the thesis. as i looked at my portfolios the trade was not a driver for the purchases that i have been making it's more looking at purchasing power and those stocks that we have been buying have been stocks that have higher demand, have no substitutes or very few substitutes and high vary of entry. if you stay in those companies, will you do well so this could be a buying opportunity. >> barry, one thing i'd point out if you look at it as a buying opportunity and buy the dip, you are not getting much of a discount if you by averages. you are talking a decline of maybe 1 and a quarter percent for the s&p, 2% off the dow. that's not off all-time highs here >> no, that's right, becky the way i would think about that is, it's very atypical for the market to come unglued in the fourth quarter we have to be going into a recession or in recession.
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even in 2018, we were going into a global trade or manufacturing recession. if you are just buying the averages here, you may be picking up nickels in front of a steam roller in the sense that if this passes, it's likely the fed would accelerate the taper we could have a bit of a pullback to begin 2022 i wouldn't be so inclined to say, hey, this is an opportunity to buy spies, s&p or certainly not buy tech but the sectors as i said, energy and financials in particular that you got valuation on your side, economic momentum on your side. you got a good, solid story that will work in 2022. that's where you can got more of a discount, it would be a decent ep try point. >> i don't know if you heard our last interview we were talking to the ceo of a toy company saying he thinks we will have a toy glut in the first quarter of next year, eventually, we will head into a recession based on this, a lot of the stuff out there will not get there in time.
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you will be past the holiday itself i'm trying to figure out if that is a recession that is simply for some category some retailers who are particularly kind of aligned to the fourth quarter sales and the christmas holiday or if this is a bigger issue, the inventory, i did start hearing people talk about inventory gluts next year. watt your thought? >> my thought on that is i don't see a recession out. i agree with you i think this is very transitory in nature. we're going to get through the bottlenecks that we're having 57d ultimately, we're going to get away from some of the inflationary source we are seeing i don't see a recession. once again, this is more of a long-term look at the market this gives us opportunity. i think boarry pointed out you have portions of the market that you want to start buying such as in energy. there is even some of the casinos like mgm that has a light asset model that they're
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focusing more on gaming. so if there is portions of the market that you can invest in, single names that will do well going into 2022. >> gentleman, thank you both for getting ul early with us trying to make sense with the big moves in the markets today >> thanks. >> thank you >> okay. coming up, a closer look at crypto and the big drop we are seeing this morning. plus, we will talk tech stocks as we head to a break. check out the biggest nasdaq losers in pre-market right now stay tuned you are watching "squawk box." we are live from thnasdaq markee if time' time'sin time's square >>
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welcome back to "squawk" this morning crypto currencies plunging right now. kate rooney joins us with more on this move lower, what is driving it and how it relates to this new covid variant that we're hearing about. kate >> yeah, it's related. it's a macro-driven sell-off the crypt countercy dropping near $53,000 that's the largest level since october. bitcoin is off 20% from that all-time high of 60,000. that move officially putting it in bear market territories january, though, is still up by more than 80%. bitcoin is holding up better than some of those other coins, ether, solana, xrp , all of thoe
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names, with news of that covid variant, bitcoin seen as that riskier asset. the inflation and safe haven narratives really not sticking quite yet. analysts are telling me there are moral go -- more algorithms. there is a 2.8 billion option that could be adding to some of the volatilityand short-term buyers have been the drivers lately of this price action in bitcoin. according to data fromglasnost,% has a cost basis above $57,000 so there is new buyers they might be more responsive to the price fluctuations based on where they got in and have less of a proven conviction in bitcoin, so they might be quicker to sell, andrew. >> okay, kate, you don't think this relates at all to what we
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are seeing in the broader market in terms of this variant >> no, i do think it's a macro-driven story are you seeing knee-jerk reaction sell-off in tapping into the higher growth assets him people are selling bitcoin as a result they need liquidity. the liquid market look to bitcoin sell-off and it's a very global market. you see overnight stocks gone up in asia. bitcoin tend to do the same. >> real quick, in terms of resistance, you know, there are some traders saying 53,000 is sort of the next stop on the train where there might be resistance what do you think? >> that's the open question is this a new fair market we seen crypto before where the price drops by as much as 70 or 80%. others are saying this is a higher low it looks to be finding a bottom here around 53,000 but that's still an open question >> kate, happy thanksgiving. >> happy thanksgiving. meantime, we will continue to talk tech names and how this new variant could affect the
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sectors. a senior analyst is here good morning to you. we have been asking the question all morning, given this variant, how should we think about tech how should we think about growth >> i think we are looking at it similarly to how we were earlier this week and last month and throughout the year. which is we are focused on the innovation we are focused on these company's ability to execute on their product cycles so if we look at a company like apple. we see strong growth driven by innovative products. silicon, nvidia are an enabler of extraordinary development in areas like artificial intelligence if you look at a name like qualcomm, they have very attractive growth by the internet of things i'll round it out with google or alpha bet, the core search is healthy. youtube growth is very strong. we see a lot of opportunity with
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the google cloud platform. a lot to like here with today's sell-off that's a longer term out view. >> in terms of today's sell-off, meanwhile, we should say there are some stay-at-home stocks, you can see them, peloton, zoom and the like moving much higher. does that make sense to you? >> in the very short term, i understand why they're higher. clearly amazon we appreciate ecommerce. it has become even more important. what is key for us if we look at the advancement, the healthcare community, the technology community, that is helping us to find a way out of this, the pandemic so while spikes and variants are going to be a part of the dynamic really the social fabric, everything around us for the foreseeable future, we still see opportunity. it's driven by innovation. it's driven by investment and by companies that are looking out beyond some of this.
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and if those companies could do that, there is shareholder value to be created. >> in terms of pricing, though, one of the big other questions is what j. powell will do come 2022 and potentially if you are concerned about this new variant, how that might impact them >> there's clearly a little bit more inflation we would expect interest rates to move higher over time if things got a lot worse, could the fed push back the time line? that's certainly possible. i think fwha will matter for a lot of these companies, even were interest rates to be on the 10% to be 2-and-a-half or 3 or 4% i think, andrew, it's going to come down to the innovation. historically, these interest rate are still very, very low. what we are seeing is that the tools, the shift to the cloud, mobile, this buildout of the digital infrastructure, that will be very strong in the next five or ten years. i think that will matter more than the level of interest rates
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and perhaps a shift on the taper time line or not >> dan, i want to wish you a happy thanksgiving thank you for joining us this morning. appreciate it. >> thank you mike santoli will be joining us in a few minutes to talk about more of these big moves in the market today remember, it's a shortened die of trading on top of everything else, the declines in the free market, marks close at 1:00 p.m. eastern. take a look at casino stocks, wynn resorts off 7.4%. so is los vegas sands and penn national and mgm resort itself off by more than 4%. treasury market we are paying attention to today, all questions of whether the fed will be able to taper's two days ago. the ten-year note, down, dow futures indicated off by 815 points s&p futures down 79. the nasdaq off 168 it's a thinly-traded day
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it's early in the morning. so we'll see what's going to happen as we get closer to the opening bell we'll talk to mike santoli in just a people. moment this is the new world of work. each day looks different than the last. but whatever work becomes...
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the do you futures pointing to an 800 point drop he open joining us is mike santoli, cnbc's senior commentator a. lot of people pay attention when they see a drop of 800 points like this. my guess is you were a little
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more as toic you've seen it before. >> it is understandable why 800 points in the pre-open for the dow is a little bit jarring. which is it's been so calm at least on the index level. the market has been ratcheting higher or flattening out as opposed to making these dramatic moves. it's it's an understandable textbook response with something that's so potential -- this is the s&p 500 exchange traded fund this shows the premarket move. we are essentially undoing a lot of the november rally. this traded here on november 1st as low as under 460, so a bit of net progress, and a lot of folks would be looking for that type of level to hold, to see if this is anything more than just a bit of a gut check and switch back to levels from back in the fall. small-cap stocks, we've had this
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kind of possibility in the last week or so this index was going to escape this long flat run a lot of energy, a lot of financials, a lot of things tied to a sense that the global economy is going to be accelerating, and that's obviously not happening. so this is deflateing this is based on options that give you protection against downside typically in the s&p 500 it's the market's best guess for how volatile the s&p will be in the next 30 days what is interesting here is not just this spike higher which would get us up to where we were in december, is the fact that we actually have been creeping higher for a few days. i don't believe at all that the markets were sniffing out something on the covid front for
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something that would make the markets more volatile, but there was in erratic action in the market massive selloffs in the growth and work from home names that positioned everybody exactly wrong for today's news, which is let's get back from the cyclicals. that's probably exaggerating the moves on the fact that on a net basis investors were leaning in the exactly opposite direction so maybe that means we get of an overshoot reaction today again, nobody knows whether this is something that will be economically consequentially yet. >> all of the spr release couldn't do, these headlines are doing, the impact on crude oil taking things down pretty substantially. >> it's always the things that you weren't so worried about that all of a sudden takes the
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market by surprise. mike, thank you. we'll see you in just a little bit. more market voices equity markets will be closed at 1:00 p.m. eastern time we'll be back in a moment. what does the future of strength look like?
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welcome back to "squawk box. stocks are under appreciate with a new covid variant that's emerged. ryan dietrich from lp health, and ryan, a lot of questions this morning about how to play this, and how to thing about it. >> yeah, first up, happiably friday coming down 2%. we haven't had a 1% drop since october 4th, we haven't had a 1r% move up or down in the trading sessions so the news today is especially concerning at the same time it's been a
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long time without a lot of volatility i am encouraged, look at cele, copper, industrials -- if it was a true risk-off, we think copper would be down a lot more. >> are you suggesting everything is on sale and it's a buying opportunity or are you saying you've got to wait and see >> we think it could be on sale. historically, up 20% for the year those are higher eight of the last nine times. we know all the news that's out there, but we're not blindly saying, hey, this is a bull market we think it's an opportunity and in the midst of still a growing overall economy here >> huma, what do you think it means? >> exactly as ryan mentioned,
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right? this is the sale for us in the markets. at the end of the day, we are still seeing a lot of strength in that consumer, as we go into the holiday shopping season, as well as into next year that lays a great foundation for this economic recovery when we seed they sell first and ask questions later kind of days, it provides a great opportunity, especially for long-term investors. at centersquare we're focused on understanding long-term metrics. >> so you think the market sees through this, even if it's as bad as perhaps the most pessimistic people would suggest? >> you know, we've been dealing with covid at this point for 20-plus months we have kind of learned to live with it. really our focus is what's coming next, as we think about black friday as a shopping day,
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e-commerce is one of the big thematics that will shape what's coming down the pike for the next 5, 10, 15 years down the road that's what we need to focus on on days like this appeared use it as an opportunity >> ryan, you know, there's a couple stocks that are moving higher, the pelotons and zooms of the world i imagine that doesn't make sense to you then. >> in the near term, i guess you could say the risk off is just a blip, but regional banks are coming off the -- we want to stick with the cyclicals that are on sale. we think those will lead the bull market and we'll stick with those groups. >> uma, ten seconds left everybody on this show has been so bullish today i wonder if that's a bearish sign >> it's always a great question,
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right? if you're part of that majority, what does that mean for the market long term we are seeing a lot of strength in that consumer. today and a lot of really great good drivers, that should drive this market forward. thank you, both. >> thank you. >> thank you well, what a black friday or what a way to wake everyone up make sure you join us next week. right now it's time for "squawk on the street. good friday morning. welcome to "squawk on the street." i'm david faber along with morgan brennan and mike santoli. jim and carl have the morning off. let's look at the futures on a shortened trading day, and today is typically about retail, but not so much. that market action is being pushed by renewed fears of covid. in fact a ne

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