tv Closing Bell CNBC December 8, 2021 3:00pm-5:01pm EST
quite know what to make of it and who the big winners are going to be. and the question is who are the big spenders going to be >> it's been fun having you here thank you for your time. >> this is great this beats work from home. >> thank you for watching "power lunch," everybody. "closing bell" starts right now. ♪ thank you. here at the new york stock exchange, the explosive rally that kicked off the week taking a bit of a breather today. though the nasdaq and small caps are outperforming. >> let's take a look at what is driving the action today got an early boost this morning after pfizer said three doses protections against the omicron variant. chip names are under pressure today in part of a bearish initiation that stock among the worst performers in the s&p 500 today.
59 minutes left to go in the trading session. nasdaq is leading apple at a record high. >> s&p still tracking for its best week since february coming up on this show today, two great voices to weigh in on the market we'll talk to hayman capital's kyle bass and liz ann sonders. plus, the ceo of kohl's will join us exclusively to talk about the consumer landscape and of course news this week of an activist pushing for a big strategy shift around e-commerce >> again so looking forward to that, right? >> second go round in a year let's focus on the big stories we're watching today mike santoli is tracking all of the market action. meg tirrell has more details on pfizer's news. mike, start us off what are you focusing on today >> we're holding the gains i think that's your main takeaway from the overall index action today s&p 500 kind of up to 1% of the all-time high. november 5th was when we got to
the 4690s, effectively the current level. right before thanksgiving, before that black friday pull-back. and now after this shakeout, it's kind of interesting we're just kind of hovering right there. a lot of the internals are saying it's a net positive day as you mentioned small caps have some traction. also what i would call the victims of the speculative stock purge of last week are starting to get a lift out there. you're seeing a lot of the zooms, the docu-signs, they're kind of getting picked up and running down 50 or 60% from their highs. so, maybe a little bit of that energy flowing through the market apple's gone almost vertical again. it doesn't seem to be necessarily particularly news-driven. although of course they did have a favorable court ruling on their kind of app store litigation we're also within striking distance we had a couple dollars really of the $3 trillion market cap mark buying stampedes, it happens in some of the favorite stocks, a
lot of the option activities are very busy. you can't necessarily extrapolate this kind of a line. but clearly when the biggest stock in the world is now outperforming the underlying index of which it's a very large piece, it's hard to have too much damage done to the index itself now, year-to-date basis, growth is now pulled ahead of value this is a dynamic that wolf research is pointing out, which is, in general, the tendency of growth to outperform value when the yield curve is compressing this is an inverted version of the yield curve. so when this line's going up, it means the spread between the 10 and the 5-year treasury yields is narrowing it suggests later cycle, it suggests the fed might be on the move pretty soon and you see here when value has outperformed, you know, going into last spring was when you had the yield curve expand so that's a dynamic to consider going into 2022, guys. >> spec rack is a new one that
resonates. >> i think i just made it up >> it's great. you're really good on your toes, as always. >> this will serve as my trademark. >> mike, thank you, we'll see you soon let's get to the covid news of the day, which initially sent stocks surging this morning. new data about the efficacy of vaccines against the omicron variant. meg tirrell joins us with all the details. meg? >> reporter: hey, sara pfizer and biontech looked at the antibody levels generated by two doses of the vaccine and three doses of the vaccine, specifically how well they can neutralize omicron there was a significant decline for people who'd only had two doses, down 25-fold. but for people who had three doses, it boosted the levels back up 25-fold so that they were similar to what two doses did against the older strain they also note, though, because of other parts of the immune system, two doses may still protect against severe disease from omicron at the same time, although this
is very positive news, they are still continuing to develop their omicron-specific vaccine, just in case it's needed and they could have it ready by march. we asked about how they will make that decision and when. >> the ultimate proof is coming from real-world data we need to see that people have received their doses, breakthrough cases, the severity of the cases by the end of the month at least we'll have enough data to see if omicron will need a third dose and monitor to see when the third dose wanes or not or if we need to go to a specific against omicron variant vaccine. >> we are expecting a lot more data by the end of the year, as he was saying real-world efficacy data. we're also expecting idea the on other vaccines, potentially vaccines because those vaccines are so similar, fauci would expect to see similar effects of a booster
dose there but a lot more to come on this guys >> at least for the moment great news, meg, thank you let's get more on the broader market it's good to see you again welcome to the "closing bell." >> it's good to see you as well. >> man, i feel like this interview could be so different if it was just a week ago. and we're only ten points away from a new closing high on the s&p. are you a believer >> yeah. i mean, i think it's easy to see that with 40% more broad money in the u.s. system than was here two years ago, i'm a monitorist at heart there sure is a lot of money chasing any dip. >> so that just trumps everything i mean, so then we overreacted to the omicron news and maybe to the chairman powell as well on the hill he seemed to scare a lot of people into thinking that rate hikes and tapering were going to come much faster than people had expected >> yeah. they may try to do that. but i think, look, you already see 20-year and 30-year rates
inverted and if you go back and re-read bernancke's famous helicopter speech, he said we should avoid the lower bound at all costs and if you do somehow end up with a zero lower bound, you need to leave it as quickly as possible we clearly didn't follow any of that advice. my view is that it's not the absolute change in rates that matters. it's the percentage change from where you start. so, i believe the fed will be able to move rates 50, 75 basis points, and the curve will flatten and potentially even invert so, i think we're stuck with negative real rates for a very long time. and i think that's just a natural consequence. >> and the stock market over the next few years during that time does what? >> yeah. i think if you look at periods of time whether you're looking at stagflation or whether you're looking at inflationary periods of time, the stocks keep up with about 80% of the, call it,
negative real rate effect. so, i think that people need to be focused more on hard assets and more on hard productive assets and maybe even using some leverage to acquire those assets when i think about defending myself from, call it low double-digit inflation and 0% yields, i.e., 10% negative plus real rates today's investors haven't had to really think about that. but i think you and i and everyone else that has to go spend money on what we spend money on, whether it's food or fuel or travel or accommodations, you see that the purchasing power of our capital has depreciated massively in the last few years and it's only going to worsen from here. >> by and large, as the predictions filter out, what kind of return do you think is reasonable for the s&p 500,
let's say, when people ask you that question, how do you answer it >> yeah. i mean, what you would need it to do to keep up with the negative real rates is at least get to that negative real rate, i.e., the amount of inflation that's really hitting you. if you remember the fed chain weights inflation. if you're buying a car today, they don't compare it to the actual car price 10 or 20 years ago. they say, well, your car today doesn't have roll-down windows and it has a very digital dashboard. if you were to replace it with an analog dashboard and the roll-down windows it'd be a heck of a lot cheaper so a lot of the inflation that the fed measures is actually not in the number. so i think the s&p's got to do 10 to 12% a year from here just to break even. >> so what kind of hard assets are you looking to invest in right now? and i know you're also paying close attention to bitcoin with the hearing going on today >> yeah. i think it's important to note -- so those are two
questions. the first one is i think owning -- again, i think owning hard assets, owning real estate, owning real estate in areas where you see the high tax, high-cost jurisdictions of our country sending the population and the companies to low tax, high business efficacy jurisdictions. when you think about tennessee, texas, and florida, they're the net beneficiaries of the mismanagement of the northeast and the west coast and i think that is a secular trend that's here to stay for the next 10, 20 years. so, i think you should invest in front of that, call it nonlinear population movement. and that's actually what we're spending a lot of time doing in our firm we just launched a new private equity firm just to focus on that opportunity called conservation equity management but it's important to note on the currency side, you say we're focused on private crypto. i think the world focuses on private crypto, but i think the
world should be focused on the central bank of china rolling out its own digital currency next year. so you have private crypto, which is decentralized, not controlled by a sovereign government and then you have the centralized version like china's going to roll out next year, which i think is the largest risk to u.s. national security that we've had in the last several decades. so, i think the market is focused in the wrong areas, but i think as we roll into 2022, it will refocus >> since we're talking about china, let me ask you finally. when you look outside the u.s., do you see more opportunity outside than in? and i say that because, again, as these predictions come out, i hear emerging markets, i hear europe, india, and just other places rather than the u.s. coming into 2022 how do you see that? >> yeah. i don't buy that in an environment that's inflationary, i think it's very negative, per se, for emerging markets that don't, call it
manufacturer, make their own food or don't have their ecosystem, where they're short energy or they're short basic materials or things like that. i think that the u.s., with our architecture structure rule of law, is so much a better place to invest. china's just proven to all of the people that thought you were getting paid an extra return to invest in china, that now you have xi jinping risk and you also have the risk that none of the chinese firms are audited by covered audits in the west i can't imagine that any of those foreign markets are going to outperform the u.s. here's a great case in point. the last ten years the shanghai composite has annualized like a 3% return. and the s&p 500 has annualized like an 18% return so, i don't know where blackrock thinks we're getting additional compensation for taking those additional risks but i would say that she's gravely mistaken >> the chinese currency, though, is at the strongest level since
2018 kyle, we're out of time. >> okay. >> final really quickly, do you have a really quick comment on that >> yeah. i mean, china still has a closed capital account. and they've got all of the passive flows from the msci indices and the bloomberg aggregate bond index they've got so many dollars flowing in that blood flow to grow the tumor that at some point in time the united states is going to realize that we shouldn't be funding the chinese communist party's genocidal actions and their actions against u.s. investors >> kyle bass, thank you very much we appreciate it campbell's soup reporting earnings this morning before the bell beating on the bottom line, missing on revenues. we'll ask the ceo how inflation and labor challenges specifically factored into these results. the stock is up slightly you're watching "closing bell" on cnbc. dow, s&p, nasdaq all higher for a third day in a row
♪♪ this flag isn't backwards. it's facing this way because it's moving forward. ♪♪ just like the men and women who wear it on their uniforms and the country it represents. they're all only meant to move one direction which is why we fly it this way on the flanks of the all-new grand wagoneer. moving boldly and unstoppably forward.
small businesses like yours make gift-giving possible. now, comcast business has an exclusive gift for you. introducing the gift of savings sale. for a limited time, ask how to get a great deal for your business. and get up to a $500 prepaid card with select bundles when you switch to the network that can deliver gig speeds to the most businesses. or get started with internet and voice for $64.99 per month with a 2-year price guarantee. give your business the gift of savings today. comcast business. powering possibilities. 43 minutes left of trading shares of campbell soup higher today after beating earnings estimates. organic revenue growth came in a little lighter than expected i spoke to their ceo this afternoon about their overall sales picture. here's how he characterizes it >> we felt good about the quarter. we had anticipated that we were
getting fairly significant replenishment from a year ago. at that time our meals and beverage business was up 11% soup was up 21%. so we were lapping some pretty tough comps. i think along with that, though, a little bit of headwinds relative to supply primarily related to labor and we're doing a really good job of working through that. but a little bit of short-term pressure in the quarter. but, overall, very aligned with our expectations and i think it was paired with a very good delivery on the other financial metrics. a tough environment for sure, but i think navigating it well >> talk to us more about what you're experiencing on the labor side of things how tough is it, and how are you fighting that issue? >> yeah, great question. in q1, our labor -- so as a percent of vacancies within our network, was about 13% we average usually around 4 or 5% so it was almost two to three times what a normal vacancy rate
would be but we did jump on it with a lot of activities. and we're kind of approaching it through kind of three levels first is the acquisition then the conversion or the hiring and then retention and really all three of those are important. and what we found is that it's really a combination of tools that are getting the job done. whether that's sign-on bonuses and wages, some of the financial elements that you would kind of expect but also really important is the support we're putting around new employees especially, whether it's the training and development that we're providing or the management or resources or even the scheduling, which has proven to be a big factor. so the good news is in the last month, that vacancy rate that we had in the first quarter's come down by 30%. so we're making great progress i do expect as we turn the calendar year to be in a more normalized position as we get into january and february. and then, with that, i would expect to see supply and
inventory levels on the specific places where we're a bit challenged now to recovery fully. so we're looking forward to that but a lot of progress here in the last 30 days >> so on the pricing front, a lot of analysts were looking for you to pass on those higher prices to consumers. we saw that in this report a little bit i wouldn't say to a greater extent are higher prices -- how much more room is there for that? and are higher prices going to keep going up? >> yeah. i mean, we said today that in the quarter we saw inflation rates that were around 6%, and that we expect a full year to be in the high single digits, which implies some increase in inflation as we go forward that is expected we understood that so, what we have planned is a second round of pricing that we've already communicated to retailers, it will take effect in january it'll bring for the full year our pricing level to around
mid-single digits. and then when we pair that with our productivity and some of our cost savings initiatives as we get into the back half of the year we expect to fully offset inflation with a combination of those tools in q2, we'll see a little bit of tension between that rising inflation and as pricing comes into effect. but by the time we're in the back half of the year we're feeling very good about our position and our ability to mitigate that inflation in the second half. and with that i think you'll see momentum and acceleration of our performance through the second half and heading into '23. >> so, from your perspective, overall food inflation peaks some time early next year? >> yeah. i think it depends a little bit as you're watching kind of the ups and downs over the last couple months, there are some places that you're starting to get some early signs of recovery and some costs that are going down but there's other places where i expect it to stay with us for a while. one of the things that's affecting our back half in
particular is packaging prices where a lot of those contracts are more on the calendar year than our fiscal year and, so, as we get to that january time frame, we'll see a little bit of a bump up. but i think overall this inflation falls into a mix of some things that are generally cyclic in nature and i think will recover over time, and then i think some things that are a little more structural when you think about wages and labor costs willing with some of the transportation costs, i expect those to stay with us and, so, we're working appropriately on the right things for productivity and price pack architecture, and other tools we've got to minimize the amount of impact the consumers have to experience in price but i don't think we should anticipate inflation leaving any time soon. >> really pushing back against the whole transitory argument, especially on the wage front they are dealing with some tough labor pressures, scott consumer staples are the worst-performing sector in the s&p this year. still higher but, of those, campbell soup is one of the worst-performing
stocks it's down 13%, and one of the biggest questions investors have is, is this company in a better position coming out of the crisis we know during covid people just stocked up on things like soup and snacks and what clouse said to me is they are seeing some growth over 2019 levels. and the biggest source of growth are younger consumers where they're working some days and they're home some days the baking trend and cooking trend he said is really sticking >> i don't think anybody thinks that the wage inflation is transitory, right? but maybe the cost of the can, for example, aluminum prices or whatever those have already rolled over and come down. so, i hear you on the wage side. and that's going to be an issue going forward. >> the fed's going to have to pay attention to it. all right, the head of instagram testifying right now on capitol hill about the app's impact on younger users. up next, we're going to bring you the highgh of atlitsth hearing so far we'll be right back.
tomorrow, investing club members can talk to cramer live. >> that's right. i'll answer questions from club members as i reveal my game plan for 2022 you'll know the moves i make before i make them scan this qr code and become a member of the cnbc investing club, today. >> jim cramer's game plan for 2022, tomorrow 12:30 eastern
the head of instagram testifying this hour front of a senate subcommittee talking about protecting kids online our julia boorstin has the highlights so far. hi, julia. >> well, adam mosseri, head of instagram, is talking right now. and he kicked off his testimony saying that he believes that instagram can be a force for good, saying that he wants an industry body to set standards and regulations to protect kids, not just on instagram. he pointed a finger at some other platforms. >> but the reality is that keeping people safe is not just about any one company. an external survey just last month suggested that more teens are using tiktok and youtube than instagram this is an industry-wide challenge and requires industry-wide solutions and industry-wide standards. >> richard blumenthal and marsha blackburn kicked off the hearing with prepared remarks. they said they thought
instagram's recent product updates are insufficient >> two months ago the global head of public safety for fbi w for facebook was put on notice by this subcommittee nothing has changed. and in the meantime more lives have been broken >> blumenthal just now pushing mosseri on whether he thinks instagram should restrict addictive signs. mosseri saying that the algorithm is not addictive he also pushed mosseri to agree to make the pause on instagram for kids permanent, and mosseri would not agree to that. he said that kids are going to be on these platforms. they might as well make a version that is safe for them. i'm going to continue listening to this. it seems like things are getting heated between senator klobuchar and mosseri. >> keep us posted, julia boorstin, thank you. tomorrow on this show we will talk to senators marsha blackburn and richard blumenthal
they will join us for a first-on-cnbc interview. still ahead, liz ann sonders from charles schwab tells us what she's watching into the new year plus, meme favorite gamestop earnings stock is getting hit a little bit in anticipation. and a quick check for you on bonds. the 10-year yield goes back above 1.5% a little pressure coming off the 2-year we'll be right back.
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. wish i'd invested when i had the chance... to the moon! [thud] [clunk] ugh... unbelievable. unbelievable. [ding] tonight, new data on how pfizer's vaccine stacks up against omicron. plus, the labor movement hits starbucks hits starbucks inside the effort to (soft music) hey dad, i'm about to leave. don't forget your hat .
28 or so minutes left of trading. let's check in on some individual market movers a street high of 1580. the firm expects the fourth quarter to be another strong beat for that company. and tesla continues its rebound up almost 2% deutsche bank upgrading goodyear the tire company is a large beneficiary of the industry's shift to electric vehicles that stock up 3 almost a half percent. and tomorrow jim will share his outlook for 2022 you can still become a member. go to cnbc/investingclub and you'll get the link to attend jim's event in that newsletter or just point your phone at the screen and the qr code will take you there >> which is so easy to do. all right. it's time now for a cnbc news update with rahel solomon.
>> here's what's happening at this hour. the defense has rested in the fraud trial of theranos founder elizabeth holmes the government has chosen not to call any rebuttal witnesses. the judge expects closing arguments to start at the end of next week at the earliest. nearly 17 years after being sentenced to die, scot peterson has been resentenced to life in prison without the chance of parole peterson was found guilty of killing his pregnant wife in 2002 last year the california supreme court threw out his death sentence employees at activision blizzard slamming the company for allegedly ignoring sexual assault complaints they're demanding an apology from the company and more money for alleged victims. activision blizzard says that it's implementing significant changes to address employee concerns and the international space station now has a japanese billionaire on board e-commerce tycoon mazawa, he will be joined by a producer who will film his visit. they're believed to be the first paying tourists to visit the space station in more than a
decade you're now up to date. sara, i'll send it back to you >> rahel, thank you. ceos of big crypto companies testifying today up next, we'll talk to a blockchain investor about the currency's regulation and why he says we're entering the golden age of crypto. still dow higher, actually pushing higher s&p up a third of 1% tv: mount everest, the tallest mountain on the face of the earth. keep dreaming. [coins clinking in jar] ♪ you can get it if you really want it, by jimmy cliff ♪ ♪ [suitcase closing] [gusts of wind] [gusts of wind] [ding]
fifteen minutes until we board. oh yeah, we gotta take off. you downloaded the td ameritrade mobile app so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard before we board. excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position. you two are all set. have a great flight. thanks. we'll see ya. ah, they're getting so smart. choose the app that fits your investing style. ♪♪ 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. tomorrow, investing club members can talk to cramer live. >> it's exclusive access for my best ideas for the new year. scan this qr code and become a member of the cnbc investing club today >> tomorrow, 12:30 eastern bitcoin staying cloels to the 50,000 mark after last weekend's plunge and it's a big way for crypto in washington ceos of crypto companies all
testifying today joining us now is blockchain investor and entrepreneur, chairman of block and the founding partner of tally capital which includes coinbase and binance. welcome. it's good to see you >> hey, scott, thanks for having me >> what's your take away from today, presuming you watched, which i assume you did >> i caught a large piece of it. i was honored to testify at the house in 2016. so almost five years ago and a lot of the scenes back then were about innovation and jobs and investment into this sector, but it was overshadowed by a lot of education for members of congress. i still think we have a long way to go in educating members of congress, and these agencies on what crypto can do for american competitiveness, innovation, and really fixing the plumbing of
wall street and beyond >> what kind of regulation do you expect >> fundamentally, there are a lot of agencies focused on crypto regulation. and i think investors all are looking for clarity. right now there's a lack of clarity. there's probably a ton of money sitting on the sidelines waiting for that clarity that being said, the agencies at play, ftc, treasury, et cetera, all have this at the top of their whiteboard to try and figure out my goal for the u.s. would be -- and it's much like going to any crypto institution today, meaning like paypal and square and visa, et cetera. those ceos are leaning into crypto and it's amazing to watch those thought leaders. i would like to see the same
thing happening from the top here in the u.s., which is the white house and joe biden using crypto and this new technology frontier as a key conduit for american competitiveness and tech adoption going forward. it is as important as the internet in terms of how this technology's going to transform money and everything beyond. so, ultimately, there's going to be a lot of friction and a lot of discussion around what these agencies are going to do but, ultimately, we need a national action plan for crypto in this country, much like 25 years ago we had for the internet it's that important, i think, for u.s. competitiveness >> so that does sound exactly what the top republican on the committee congressman mchenry said he said it serves america's competitive interests, we don't want to be at a global disadvantage, basically everything you just said are you finding republicans are
friendlier to the crypto industry than democrats? or is it lawmaker-specific >> i think it's lawmaker-specific. and they're all going through their seven phases of understanding crypto, what it is, what it isn't. there's a lot of headlines on hacks and ransomware and that sometimes seeps in the wrong way. but if you zoom out, the picture is much greater in terms of financial inclusion, greater opportunity, and, again, fixing a lot of the plumbing of both enterprise and wall street as it pertains to moving value right now moving value in the current system isn't sustainable. and the crypto rails for payments, movements of money, trading, et cetera, are 2.0'ing wall street and well beyond. >> what do you make of the recent volatility in bitcoin specifically and how much does that -- maybe not hurt the case is the right way of saying it, but you get the idea -- of trying to portray this as a legitimate asset
class. when you can have the kind of crash that you did over the weekend, how much does that hurt your cause, so to speak? >> yeah. and i think it's a great question, and a lot of people ask about the volatility of bitcoin. it is volatile if you look back over the shoulder of the last ten years, bitcoin's been the best performing asset on the planet but it has volatility to it. whf i testified in front of congress in 2016, bitcoin was around $400 a bitcoin. and the whole market cap of crypto was close to 8 billion as opposed to today, it's about 2.5 trillion so, it is volatile there is still price discovery, and it's still, what i would say, a baby asset class. but it's punched through a trillion dollars in value. i think any time something punches through a trillion dollars, it's got, especially in the case of bitcoin, it's got this bottoms-up community and
holders that are going to sustain it going forward now what we're seeing is every institution on the planet is trying to develop their bitcoin strategy and how to adopt it and then what to do with it. we are entering, in my mind, a golden age of crypto, much like the 1849 gold rush or the roaring 20s. i've never seen this level of engineering development and talent coming into the space it kind of reminds me of the early days of the internet and then juxtapose that with the capital and with that talent it's pretty incredible but at this point -- >> sorry to interrupt you. does it remind you all, since you're talking about the internet, does it remind you of '99 at all just a kind of speculative fervor because it reminds a lot of people of that, in some respects >> yeah, no. and, look, new technology rails -- so think telephony,
railroads, internet, it goes through effervescent cycles. and the amount of capital that goes into it is what creates these new rails out the other end. and you can say, oh, it can be done much more effectively with less capital, less hype and effervescense. but at this point companies can't, you know, avoid this. every company on the planet needs a crypto strategy, much like 20 years ago an internet strategy the key in that is finding good partners i was inspired to see visa building a crypto advisory practice and i think that thought leadership should resonate with other financial services companies because that's really important. >> matt, we got to run i appreciate your time up next, a bearish call on chips and how the omicron
variant could impact the fed's time line. we'll break it all down, next. oh, my gosh, the "market zone" is next. we love our new home. lots of windows, great light- but the birds. they're back. yes, i hear them. uh-oh. why are these birds so angry?! at least geico makes bundling our home and car insurance easy. we save a lot.
you're a one-man stitchwork master. but your staffing plan needs to go up a size. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire power e*trade gives you an award-winning mobile app with powerful, easy-to-use tools, and interactive charts to give you an edge, 24/7 support when you need it the most.
plus, zero-dollar commissions for online u.s. listed stocks. [ding] get e*trade and start trading today. never settle with power e*trade. it has powerful, easy-to-use tools to help you find opportunities, 24/7 support when you need answers, plus some of the lowest options in futures contract prices around. get e*trade [ding] and start trading today. the "market zone" is sponsored by e-trade trade commission-free today with no account minimums. welcome back dow's up 40 points we've got a huge lineup coming up in the second hour of "closing bell. we'll talk exclusively with kohl's ceo, liz ann sonders from charles schwab shares her latest views on the market. we'll talk about the cannabis company's just-announced acquisition. and we will get earnings results from gamestop, rh, and rent the runway but first we've got just over ten minutes left in the trading day.
are you ready, scott >> i am ready. >> we are now in the "closing bell" "market zone." mike santoli is here to break down these crucial moments and today we've got josh brown from ritholtz wealth management. it expects a full global recovery in the end of the pandemic and a return to normal economic and market conditions next year. josh, do you agree with that call >> uh, yeah, for the most part i tend to just try to focus more on weekly market action. this is like a mirror image of last week, what we've been seeing so far. so, i think that's a bigger positive than anything looking out further on the horizon and the one thing i wanted to make sure i mentioned today, the follow-through in small caps is really like nice to see. that's just been a tough area to
be but the russell is having a much better day than the s&p or the dow. i like when we see that kind of action this time of year i think it bodes well overall. >> mike, we were due for a pause right after a big burst. i would suggest this is pretty positive still >> no doubt about it it would make all the sense in the world to be just digesting two-day gains of more than 3% in the s&p. all day you've had more stocks up and down, to josh's point you have traction in some of the more smaller cap and cyclical areas. 4702 on the s&p. we've only closed above 4700 four times, but only within a few points of it >> on the jp morgan call, the market and the recovery return to normal. what comes with normal is tighter fiscal and monetary policy, which is the bearish case >> which is why there's not a lot of upside projected from that call. he's only saying single-digit returns for the s&p 500. i don't think he's necessarily saying now is the start of
something big and great for the equity market, just this is going to be more of a normal functioning economy. it becomes more of a push-pull >> you're only three points away from a new closing high on the s&p 500 and who a week ago thought we'd be having this kind of a conversation today? and also the news about the vaccine -- >> i did >> well, you can comment on that, josh because, in fairness to you on twitter last week you said buy them >> listen, we've already, to some extent -- i'm not going to tell you every tightening next year is priced in. i'm not going to go there. but, to some extent, we have already been in a normalizing mindset 100% plus of the gains this year, not just for the u.s. stock market but in many stock markets around the world, have come in the form of earnings growth so, in other words, we've had multiple compression that started really in december so this is not a market where
it's all about stimulus and multiple expansion and people are paying up for everything that's the opposite of what's really happening multiples have been contracting. now, that's not to say they won't contract further they absolutely can and should if we're seriously going to get liftoff for rates in the second half of next year. but that's fine, we can live with that. the economy is growing corporate earnings are growing buybacks are going nuts again. all of this is perfectly normal. so i like the word normalization. and zonki don't think we got the benefit of, like, crazy stimulus this year. people are already starting to price in the fact that we're going into taper mode, and it's perfectly fine that they are >> on that note, pfizer says its covid booster shot provides a high level of protection against the omicron variant. steve liesman looks at what that could mean for the fed ahead of next week's meeting. steve? >> yeah, scott
markets are now reading new vaccine developments and comments to suggest that almost whatever happens with the virus, that is within some exceptions, the fed is going to hike news today from pfizer the third boost works against omicron raised probability for fed hikes. the second hike coming in september. and even a third hike being priced in for december the probability of quicker rate hike had already been on the rise after the fed chair jay powell last week said he would view it as inflationary. so hikes coming with both good and bad virus news the yield on the 2-year began rising, hitting fresh pandemic highs most days since then it surged above 70 today before easing back towards the 67, 68 level. notably, the sharply repriced fed outlook comes with not much negative reaction in equities, unless there's a drastic economic slowdown resulting from the virus. that could give the fed greater confidence to go faster.
mike >> yeah, we're -- i mean, we're back where we were before the news of omicron when it was the telegraph taper, where we all said december is going to happen, and the market was cool with that because it was so telegraphed. >> and i think that makes a lot of sense it's gotten to the point where the market is effectively asking for the taper. just let's get it over with, then we can figure things out. look, it probably makes for a somewhat narrower path higher for markets because if you do get little shocks, you don't believe that the fed is going to be as quick to go easy that's why it became, becomes a little more of a two-sided market, not something that is somehow going to be the waterloo for the bull market. >> chip stocks are pulling back today after it had its best day since march. the firm expects that nxp's
automotive chip division, which is about half of the company's revenue, will underperform compared to peers over the next few years. smh, how does it look? it's had a nice rebound. >> yeah, a huge one yesterday. and it looked a little bit hot and grabby the way it went vertical i still do think it's like the leadership group makes sense today that it's not the area that's taking us higher >> josh brown, how do you look at the chips right now i know there are names like nvidia that you like, but what about the space in general >> the i like the capital equipment side in addition to nvidia i think next year the buzz is going to be inventory restock. and that's something that nobody's been able to do for a long time. there are others in this group that probably look better. but this seems pretty obviously at a decision point here if you want to go ahead and pull up even a one-year chart. go and look back to the week before thanksgiving. looks like 158 was where that
breakout stalled and then there was a little bit of consolidation but this stock really did not come off those highs despite all the volatility in the nasdaq and now it's challenging those highs once again i think she breaks out i don't see any reason why this couldn't be 175. you want to go look at some of the peers in that semi capital equipment group. a lot of very similar setups so, i'm bullish on semis in general. and i think the shortage talk will be replaced with inventory restock talk >> getting a little lift here, mike, into the close on all the major averages it's looking like a strong one >> yeah, and volatility index kind of dipped below 20. remember it was above 35 a few days ago it's a measure, in part, of just how radically a lot of the fast-moving money exited the market that they feel they have to rebuild it in a hurry it's a lot of the same mechanics that are working accelerate the move are working to, i think, extend the upside. because as volatility -- that's an input for a lot of these
systematic investors as volatility comes down, it's the green light for them to raise exposure that's part of what's happening today. >> the dollar's a lot weaker against the euro, which helps a little bit we've got just about two minutes to go here on the trading day. >> if you take a look at the volume split on the new york stock exchange, it's been close to two to one, advancing versus declining volume it's actually better than that right now. so that's all pretty much to the good two days in a row the prior two days you had more than 80% of upside volume. a lot of folks feel like that's a significant sign of a rush back in and real demand for equity exposure. take a look at the 10-year treasury yield it's not very dramatic but a slight resteepening through most of the day here's a year-to-date look at it that's kind of the level where it sort of fell off the shelf in the summer and went to those lows so, it's sort of back up in the range and maybe somewhat more
consequential. and then i mentioned the vix we're just hovering just under that 20 mark nothing magic about it, except that we only have bottomed this year around 15 that's a higher low than we've often gotten in bull markets we're only a year and a half out from one of the biggest shocks ever and you've seen the unknowns related to potential variants that could knock the market for a loop so 20 counts as a pretty good decline -- >> we're only a few days out from vix 30. and looking like it may continue to go that way you do, as sara said, have a nice move here in the market as we try and head into the close a new perhaps s&p new closing record high. 4704 and change is the number to keep your eye on we're just slightly below that so we'll see if we can do that there's the s&p. [ applause ] so you're about two points away. apple another big mover today. 17596 is the high in apple shares today that's a new all-time high
that stock has really been on the move you've seen some of the high-growth, high valuations tech's really recovered over the last couple of days. we'll see if we can get that closing high, a couple points away from the s&p. [ bell ringing ] ♪ ♪ just a few points away from a record high and a pretty strong finish. welcome back to "closing bell. i'm sara eisen here with scott walker who is in today for wilfred frost. and mike santoli, as always, cnbc market's commentator. we'll have instant analysis of results for you from gamestop, rh, rent the runway, as soon as they are out plus, kohl's ceo michelle goss speaks for the first time since an activist is urging that company to spin off its e-commerce business. you do not want to miss that exclusive interview coming up
this hour. josh brown from ritholtz wealth management is with us mike, i'll turn to you just to summarize the day. third day in a row of buying even went down at one point on the dow during the day and it looked like we finished strong >> yeah. it was obviously no real profit-taking just yet there are going to be people that are going to squint and say, okay, five closes in the last five weeks or so above 4700 and you can't get any distance from it. we still have the seasonal upside bias that some people are still counting on. and i think that the market did have a good enough shakeout in that 5% drop with most of those kind of crowded positions getting blown away that, in theory, people have more room to either hold or increase their bets on stocks, at least into the year >> the market's been good at that throughout the whole year, places that have got ahead of themselves have pulled back on their own. it's been an interesting characteristic of this bull market >> we've had -- yes, we've had
basically localized pullbacks or corrections or bear markets, frankly. if you look at biotech and spacs, it's been bear markets. >> despite the volatility we've seen since black friday, u.s. markets still significantly outperforming the rest of the world. joining us now is willing month trust's head of investment strategy is that going to ton >> hey, scott. thanks for having me we do expect continued strength from u.s. markets, but we think that the leadership is going to start to change as we move into 2022, really the policy levers clip, as you've been covering, the fed is likely accelerate their taper and start hiking rates. that is not the case if we look at the ecb or even in emerging markets if you look at china, which is the biggest share of the emerging market index, and really the most important
country to be following there. we're also looking at fiscal stimulus, where it's supposed to be coming out about $850 billion equivalent in europe and we're looking at a fiscal drag in the u.s. so, i think that we're, as we move into 2022, we're seeing better relative fiscal backdrop, better relative monetary policy backdrop, and that should support relative growth differentials between the u.s. and international economy. so we still like the u.s., and i thought josh's comments from earlier before i came on, on small cap is something to watch, are really key but we think the backdrop for international equities is going to be much better than it was in 2021 >> well, you're still going to have a bunch of liquidity here in the u.s. we've got jp morgan suggesting you'll get to the end of the pandemic, right those are his words. and when you do that, you're going to have quite the boom on the other side that can take up whatever rate hikes come,
especially for cyclical stocks here in the u.s. >> i totally agree with that we think that the u.s. economy is well equipped to handle roughly two rate hikes in 2022 but the valuations of international equities have just been pummelled over this year. we're still looking at restrictions and lockdowns in europe because of covid. so that hit has really been much harder on international economies. and what we haven't really seen is that pick-up in global growth and as we look into 2022, that's where we think we will start to see an acceleration in the global growth backdrop whereas it's really just been all about the u.s. supported by extraordinary monetary policy and fiscal stimulus. so, as we move into 2022, as you look at those countries and regions with the higher beta to global growth, you're looking at areas like europe, japan, and china, and with valuations steeply discounted versus the
russell 2000 or the s&p 500. we think that there's a lot of opportunity there. >> josh, what do you make of that call? do you ever go look at some of these etfs that track the foreign markets or multinationals with certain country exposure how do you play that theme >> i agree with meg. we build portfolios that are globally diversified on the equity side. so, europe, by the way, did 21% this year. it's not terrible. like, there has been money made. i think china was very difficult for emerging market investors because it has swelled in terms of the weighting that msci gives it and obviously they are doing some stuff over there that i don't even want to call it antishareholder. i would just basically call it antibusiness on the surface. but a lot of the reforms that they're taking might be necessary for the longer-term benefit of all members of their society. so, it's really tough to judge that as being, quote, negative
for chinese stocks long-term it was negative this year. that might not persistent into next year. but i do agree with meghan, there are better valuations overseas, higher dividends usually what we're talking about, though, when we're saying u.s. versus international is a bigger opportunity all that is, is a conversation about what industries are poised to deliver better shareholder returns. so, obviously, if it's tech, we're the only game in town with the exception of china and china took itself out of the running recently but if you think financials, industrials, materials, are going to have a better year and are really going to fully have the gains of the reopen be manifest in their share prices, then, yes, you're going to see good performance in japan and in europe there's no reason why you wouldn't so, i like the idea of owning both it's not either/or i think most investors understand that. and then it just becomes a question of weightings and
allocations. >> good point about the sectors. we've got some hearnings out rent the runway, new ipo just crossing courtney reagan with the numbers. >> this is the first quarter for rent the runway to report as a public company they are reporting a loss of $6.72. there is an awful lot of information in there related to the cost of the ipo. revenues did come in stronger than expected at $59 million the street was expecting more than $53 million here. gross margin up very sharply year over year and the active subscriber growth improved 78% year over year to about 117,000. total subscriber growth year over year up 45% to about 150,000. they are expecting for the fiscal fourth quarter. so this current quarter that they are in now, that ending active subscribers will be between 121,000 and 122,000. they do note that all major u.s. retros are back to approximately
90% of precovid subscriber count, except for new york, washington, d.c., and san francisco. they also note they launched an at-home pickup in five major metro areas resulting in lower shipping costs that is something of course that we're watching as this is a very capital intensive business for the logistics of shipping the close to and from. shares of rent the runway are down about 7% after hours in initial action to the first result as a public company sara, back over to you >> courtney, thank you and do not miss an interview tomorrow morning on "squawk box" with rent the runway's ceo it's kind of been a disaster since going stock. it was a $700 million stock before this big selloff that we're going to see tomorrow morning, or that we're seeing in the aftermarket. >> i think the questions that hovered over the initial listing are still there, which is it's more than a decade old you're talking about 60 million in revenue per quarter you almost wonder if it's bearish that they're almost back to precovid levels of subscriber
base because arguably what's the immediate catch-up, upside there? so, it's been tough in the market for any of these kind of single, kind of narrow verticals in the consumer and apparel area poshmark, stitch fix >> down 24% today. >> it's arguably kind of subscale and not really sure >> gamestop, frank holland has the numbers. >> shares are fluctuating quite a bit. down about 7.5%. the company reported $1.3 billion in revenue and eps loss of $1.39 a share. we are not comparing to estimates. in the earnings report, the company really is highlighting its increase in inventory. they say last year at this time it had about 861 million in inventory. right now 1.14 billion saying that they frontloaded their investments in inventory to meet customer demand and mitigate supply chain issues. i spoke to a couple analysts
about this stock not comparing eps or revenue but they say these earnings numbers don't really mean a lot. a lot is really riding on the commentary, on the call. a lot more people want to hear more about ryan cohen's transformation strategy to kern gamestop into an online retailer also, the volatility in the stock, haven't seen as much of it the stock's only traded above its 30-day moving average one time in the last ten days. shares of gamestop down. 1.3 billion in revenue we are not comparing to estimates. back over to you >> josh brown, what commentary do you have on this? frank mentioned commentary on the call the problem is that's all you get because they don't take any questions. there's no q&a, everybody's been waiting for ryan cohen over the last three earnings calls to say something he hasn't. is this going to be the fourth time's the charm where they actually lay out a strategy? they've got supply issues on consoles and the shops, et cetera how do you view this
>> i think the -- look, i don't have any fundamental view on what's going on here i feel like the shareholder base is in here for something very specific and when they get it, they're going to be really excited about it so i don't think you want to get overly bearish this stock has held support really all year since mid-march. and that number is about 146, 148. so, we're not that far away from that number now. but go back and look at the last year every time the stock has gotten within range of that level, it's had a really nice bounce so let's hope for the bulls that that level holds if it doesn't, then we're in a different situation. but it's been remarkably supportive, that area. that's where the buyers tend to come back in i guess we'll see what happens >> and at least levels, still, what nine times where we were prehype retail mania in 2020
>> you know, it's $13 billion market cap there's no debt anymore so the company's not going anywhere it's just about, you know, if you were going to create the absolutely killer online portal to sell video games, would you start with 4,000 physical stores i don't think so >> 13 billion market cap >> what's that >> i was going to say it's a $13 billion market cap it's like a price to sales of, i think, two there are stocks selling at 50 times sales in this market >> where does kohl's trade deeply below one >> a fraction. >> yes, don't trade multiples of sales. >> that's true >> kohl's has a price to sales of 0.37. >> there so my point is before the whole mania in 2018 when revenue is over 8 billion, it was a $2 billion market cap. now it's 13 billion and
revenue's going to be five-point something this year. 13 billion in the grand scheme of the stock market is nothing but let's not pretend that we're waiting for something tangible on the call that's going to justify it >> we'll leave it there. josh, thank you. meghan chu, thank you very much. quick final word from you, josh. best idea? >> what do you want to talk about? [ laughter ] >> you see what i got to put up with >> he doesn't like - >> i added to one of my holdings today. we'll wait the class will wait. i added to one of my holdings today because i thought the earnings reaction made absolutely no sense. charge point chpt, it's a small cap, be careful as you buy it. don't just chase it. the stock sold off on better-than-expected revenue and higher guidance. they are investing like crazy to build out the infrastructure
needed for this electric vehicle explosion. so, as a result they're less profitable and people thought they shouldn't be profitable at all this is a land grab are. it's once in a lifetime anyone involved in charging infrastructure should be spending like crazy for market share. plenty of time to earn money later once you claim your stake. so, i like what they're doing, and i think they're reaction silly so i added to my position. >> buy on the higher loss. josh, thank you. now we'll let you go we appreciate it we are just getting started here on the second hour of "closing bell. up next kohl's's ceo's first interview since an activist investor urged a sale of the company or a spin-off of its online business. her take on that and the broader consumer landscape, her strategy and the holiday season after the break. and later charles schwab chief investment strategist liz ann sonderwi js lloin us with her thoughts on 2022 we're back in just two minutes
lou! mom said she could save up to $400 on her wireless bill by switching to xfinity internet and mobile. with nationwide 5g at no extra cost. and lou! on the most reliable network, lou! smart kid, bill. oh oh so true. and now, the moon christmas special. gotta go! take the savings challenge at xfinitymobile.com/mysavings or visit an xfinity store to learn how our switch squad makes switching fast and easy this holiday season. all week long we've been
talking to retail ceos to get their take on the consumer landscape and the key themes to watch for next year. joining us is kohl's ceo so we have sort of gotten mixed signals around spending on thanksgiving weekend and into the holidays how's it going for you at kohl's what are you seeing? >> well, first i'd say, sara, it's a really exciting time to be in the holidays for retailers right now. i think customers have been craving some normalcy. last year it was all about digital. this year there's the excitement to return to stores. and i'd say for kohl's we're just staying really close as we shared on our earnings call, off to a great start selling things like activewear, people even buy that as gifts and for themselves categories like home and toys. and we still have some really important weeks ahead of us. so we're excited to serve the customer in any way they want to be served in our stores or
online >> i do have to mention the pop in your stock earlier this week, michelle, after an activist investor engine capital with a 1% stake in your company sent a letter suggesting a sale or a spin-off of the e-commerce business, like we saw at saks. what was your reaction to that letter >> well, first i'd say to the topic you mentioned around the e-com spin-off, is certainly is getting a lot of attention these days the number one priority of the board is to drive shareholder value. we are very aligned with all of our investors in doing that. we have ongoing dialogue with lots of investors. we listen to them, we hear their ideas, and we take them very seriously and as it relates to this particular one, we've been doing a lot of work and we'll continue to do a lot of work on it to understand what this means for your business. >> so it is something that you would consider the e-commerce
business the investor says could be conservatively valued at $12.4 billion or more, which is much greater than valuation for kohl's >> as i was saying, sara, we have lots of conversations with our investors. there's lots of ideas out there. and we evaluate them and the board and the management team take this very seriously. so, like we would any big idea, we're putting a lot of resource and what this means for our business >> got it. so, on the broader strategy that you've been making and some of the moves you've been making like sephora, for instance, how is that partnership going? are you starting to see proof there that it's boosting sales overall and traffic? >> well, first let me say i'm really pleased with the performance of our business. we launched a new strategy about a year ago and sephora, you pointed that out, is instrumental to that but just to take a step back in our earnings call we shared tremendous results we've restored to 2019 levels. we've been restructuring the
business for greater profitability. we achieved our ot margin goal that was three years out we're achieving it this year and one of the things i'm particularly excited about is on the call we got into an all-time high eps this is a pivot for the department store to really being a lifestyle concept. and it's reflecting how people are living and dressing today. active we've been building that business and we're taking a bigger step forward. we see that at least a third of our business with amazing brands like nike, underarmor, adidas. we're one of the top retailers of levi's. and we are just in the early days of sephora. we launched 200 stores and our digital business is for this past quarter, but we're on our way over the next couple years to 850 so still very early days but the green shoots are good. on sephora in particular, we're seeing it lift for the stores that have it, the total store up
mid-single digits. we're seeing new customers we're seeing traffic 25% of those customers are new, they're younger, diverse, and about half of them are putting other things in their basket. so, very excited about where we are right now with the launch of sephora. >> and what about activewear, which you've really plowed into as a major point of your strategy you see it the first thing when you walk in the stores how is that faring, given that people are out again i'm buying jeans and dresses again. are people still buying the active wear? >> you just hit on a good point, which is as we're putting these sephora shops in, we're actually transforming the entire store to really reflect this direction we're going. when i talk about active, it's active, it's athleisure, it's outdoor, it's casual all of that has a fashion component. i think the way that these brands are showing up, the partnership we have with these power house brands is
phenomenal i think as we see people out and about, they're mixing and matching so they're wearing sneakers to work we sell a lot of sneakers. or they might get a pair of jeans or even joggers that are athleisure with a blazer so, our approach is really about casual comfort and, yes, active. but active no longer is about just working out it's about feeling good day in and day out. >> some of these moves you're making which you are say are yielding results, the fact that the stock hasn't really budged in the last ten years and it giving you a pretty low valuation. >> what we have embarked on this last year is nothing short of a big restructure of the consumer proposition and how we operate the business and, as i said, the results we're posting have exceeded expectations we are guiding to an all-time
high eps but it is about consistent performance. sephora, the new brands we're launching, all the changes we're making in our stores, all of that is ahead of us. we are still in the early days we've been working on it for some time. but these things are just in motion i am a believer as we continue to perform, ultimately, the share price will catch up. >> michelle gass, thank you so much for joining us today. it's good to have you. >> thanks, sara. and we will have much more on the outlook for consumer spending and inflation tomorrow when we speak exclusively with the ceos of aber crom bee & fitch and chewy. courtney reagan has numbers for us >> for the fiscal third quarter, adjusted earns of $7.03 per share. that is better than expectations the street was looking for
$983.9 million you can see here shares are higher by about 10%. rh did raise the lower end of their revenue and gross margin guidance for this next fourth quarter, and subsequent full year but they do note that they believe it's a conservative year of revenues in the fourth quarter, noting they think it's prudent due to the uncertainties posed by the new variant, postponing the opening of the san francisco gallery until spring don't really provide much more information about the disruptions to the supply chain at this point in the investor letter that is posted on the website. again, shares of rh up 10% on stronger-than-expected top and bottom line results. sara, back over to you >> another move up for that one. courtney, thank you. we've got a news alert now from washington. kayla tausche with the details a new biden appointment. >> sara, that's right. president biden is nominating meg whitman as ambassador to kenya. whitman is of course the former ceo of ebay, hewlett-packard and
streaming service quibbe she supported biden during the 2020 campaign even though she is a republican historically. there was a sense that perhaps during the transition she could get a cabinet position because president biden said that he wanted to make his cabinet bipartisan but we are learning today that president biden is anonynominatg meg whitman to ambassador to ken that >> kayla tausche for us with the update there up next, charles schwab chief investment strategist liz ann sonders on how investors should position their port foles amid increasing ceaiunrtnty heading into the new year. esg into your investments? at pgim, the pursuit is on for outperformance. as active investors, to outdeliver with customized strategies, integrating esg best practices into our investment decisions. as asset managers and fiduciaries, to outserve,
♪ ♪ 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. wish i'd invested when i had the chance... to the moon! [thud] [clunk] ugh... unbelievable. unbelievable. [ding] tonight, jay is all about the classics jay leno's garage tonight 10:00 eastern, cnbc, get yours
we've got another news alert on gamestop after it just reported earnings. frank holland with the details >> shares of gamestop down about 5% right now after earnings where they had revenue of 1.3 billion. now we're looking deeper into the filings including gamestop discussing an sec subpoena it was news that they received a request from the sec to voluntarily produce documents back in may. now in august they say the sec issued a subpoena asking for
additional documents related to an investigation of the trading of gamestop stock and other securities the company says it's now in the process of producing those documents. they add they do not expect this inquiry to affect shares >> it's interesting. thank you, frank it is interesting that they say that before we even know really how the outcome is going to take place there. a number of wall street strategists releasing bullish forecasts for 2022 today jp morgan predicts that 2022 will be the year of a full global recovery and the end of the pandemic credit suisse raising its 2022 s&p 500 target from 5,000 to 5,200 this morning joining us now is liz ann sonders, charles schwab chief investment strategist. liz ann, welcome >> thanks. hi, scott. how are you? >> i'm good. thank you. it's nice to see you so how does your outlook or
forecast compare to the ones i just read? >> we don't do year-end price target, given our investor base is almost solely individual investors. i'm not sure that adds a lot of value in terms of where we think the focus should be. what we see this year is likely to persist into the beginning part of next year. resiliency in the index is at the index level. we've had no more than a 5.2% drawdown in the s&p. but 93% of the s&p has had more than a 10% drawdown at some point this year. and the average across all 500 stocks is 19%. it's actually minus 42% for the nasdaq so this churn under the surface, the rapid-fire sector rotations, it really can drive investors crazy. the nature of that is when you have these pockets of weakness, you have offsetting pockets of strength which sort of ends up being a wash at the index level. i think that's likely to
persist. and i think the message especially for individual investors is to try not to get in front of that, which is really difficult to do but take available of these greater swings by maybe upping the pace of rebalancing and trimming and taking profits where you get some short-term strength and vice verse. take more of a factor-based approach than a sector-based approach the beginning of next year, we think that type of environment is likely to persist >> what do you expect from the fed, and how do you think the market's going to deal with it >> so, i think the december fomc meeting we expect a more formal announcement of a speeding up of tapering most likely now to be completed in march you sort of have a range of where economists expect the initial rate hike to occur, some as early as that month in march. we think it's a bit later than that, that they'll allow some span of time between now and then and we're more in the one to two
rate hikes next year of course, a lot can change. i think what mattersfor the equity market is not so much the timing of the initial hike but the speed at which the fed has to tighten that's been a big differentiator in cycles past going all the way back to the post-world war ii era. fast-tightening cycles have been met with much weaker equity market performance the market digests slow tightening to a much more significant degree so if we start to get a sense that the fed doesn't feel compelled to sort of ramp up rates every single consecutive fomc meeting, i think that could be a calming force but there's no question that the move from looser to tighter monetary policy probably brings with it more bouts of volatility like we've seen in the last week and a half >> so given this whole landscape that you just painted, liz ann, what sectors do you think will lead us next year? and where do you come down on the growth versus value, which it's been really a mixed bag
lately >> the growth versus value, it drives me crazy that debate, and especially when the answer is a really simplistic i like growth or value i say what are you talking about? are you talking about the factors of growth and value, lower case g and b or are you talking about the indexs and if you're talking about the indexes, which indexs? there's vast differences in terms of the makeup of even the common growth indexes. in the case of the larger growth index there's twice as much tech exposure same thing at the value level. so, i think the factor of value will continue to work. but that's very different than saying put blinders on and just buy the value indexes. we have an underperform on utilities now, the only sector in which we have an underperform they live in the value indexes, but they're really expensive relative to their own history, relative to the s&p. that doesn't mean they're growth
stocks, they're just expensive stocks that live in the value indexes. we think you want to take more of a factor approach focus on strong earnings revision, profitability, kind of a quality wrapper. but apply that screening or analysis across all sectors. the only sector that sort of checks a lot of the boxes of strong growth but reasonable valuation, strong balance sheets, in general, is healthcare that doesn't mean we think healthcare is going to be the winner on a week to week/month to month basis, but that does embody a lot of those factor characteristics that we think ultimately will define more in terms of leadership than a more simplistic sector or style-based approach >> yeah. it's been a bit of an underperformer lately. liz ann, thank you for joining us the home builder etf rallying nearly 50% so far this year up next, mike santoli looking at whether new data suggests the builders can remain hot. plus, roku shares rocketing
what if you could have the perspective to see more? at morgan stanley, a global collective of thought leaders offers investors a broader view. ♪♪ we see companies protecting the bottom line by putting people first. we see a bright future, still hungry for the ingenuity of those ready for the next challenge. today, we are translating decades of experience into strategies for the road ahead. we are morgan stanley.
learn about covid-19, into strategies for the road ahead. the more questions we have. the biggest question now, what's next? what will covid bring in six months, a year? if you're feeling anxious about the future, you're not alone. calhope offers free covid-19 emotional support. call 833-317-4673, or live chat at calhope.org today.
time now for a cnbc news update with shepard smith. hey, shep. >> hi, scott thanks from "the news" on cnbc, here's what's happening new today from the cnbc, 200 million americans are now fully vaccinated against covid-19. of course, that means 130 million americans are not. and while covid cases are up and hospitalizations have risen 25% in the past month, they say we're much better off than we were in the holiday season last year the u.s. government is going green. president biden today ordering all federal vehicles and buildings to use renewable energy by the year 2050. that means transforming 300,000 buildings and 600,000 cars and trucks the government set to buy no more vehicles that run on gas beginning in 2035. andvert watch in the trial of the actor jessie smollett he'scharged with faking a racist homophobic attack against
himself then lying to police about it we'll have live coverage of that story from the courthouse in chicago and the rest of the day's happenings on "the news" right after jim cramer 7:00 eastern cnbc sara, back to you. >> all right, shep, thank you. we'll see you then let's send it back over to mike santoli now who's been looking at the trends in housing, which have been strong pretty much all year >> to the point where home prices have gone up and up people feel like it's a bit of a stretch at record levels maybe a little bit surprising that homes today the median home at the median household income is actually more affordable than it's been most times throughout history. this is essentially what it costs to pay a mortgage including property taxes at the average level for the median priced home at the median income so, yeah, we're up a lot from any time since the great financial crisis if you go back back in the '80s and the housing bubble
rising incomes help as an offset so that explains, of course, why housing-related stocks, and it's not a huge sector aside from the home improvement retailers home builders themselves not a huge sector. but take a look at how they've done a couple of different etfs here's your two-year outperformance over the s&p 500. maybe getting a little extended but it's hard to bet against the underlying trends if those home builders are going to have pricing power and equity values keep going up. gamestop shares falling after reporting its latest results announcing it received an sec subpoena. we get reaction next of an analyst who's been highly critical of the business
shares of gamestop moving lower, following the earnings this last hour the company also disclosed it's received an sec subpoena back in august for additional documents regarding an investigation into trading activity in its stock and other securities let's bring in the managing director at loop capital dropped his coverage on the stock earlier this year. it's nice to see you what's your reaction to the report >> once again, these were not great numbers. on the positive side, sales were up 29%, and they were ahead of consensus. but that's been expected because we're very early in the new
video game console cycle the bigger issue here is that they missed consensus in terms of earnings, they lost a lot more money than investors were expecting. and then when you looked at the press release, it was literally six bullet points. so it really didn't give you a lot of details in terms of what the strategy was to turn this business around. >> what do you make of the subpoena which the company says it's not going to have any adverse effects whatsoever on the business >> i do agree with that. as we know, there was a lot of crazy trading in gamestop. this year a lot of it was by individual investors but as far as i can tell, the company did not do anything untoward whatsoever. now the sec has to investigate where you have a stock that went up all the way and now it's down to 160, 170. but i don't really think that the company did anything wrong i want to be very clear about that >> got you do you expect anything of substance today on the call from
ryan cohen they don't do q&a. and what i think this is his fourth earnings call since he joined the board do you expect anything >> based on what i saw in this press release, i do not. if i recall their last quarterly earnings call lasted, you know, less than ten minutes. they didn't take any questions and basedon the fact that, lik i said, this press release was six bullet points, i'm not really sure we should be expecting much more. quite frankly, shareholders deserve a lot more but at the end of the day they can always vote with their wallets and sell the stock >> anthony, i appreciate you jumping on with us we we'll see you again soon >> thank you >> don't do any media interviews, either >> yeah. up next, tillray shares ending the day higher after announngacisioci an quitn of a whiskey distilly the ceo joins us next to discuss. so when something happens that could affect your portfolio,
you can act quickly. that's decision tech, only from fidelity. your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire dad, we got this. we got this. we got this. we got this. we got this. yay! we got this. we got this! life is for living. we got this! let's partner for all of it. edward jones what if you could have the perspective to see more? at morgan stanley, a global collective of thought leaders offers investors a broader view.
♪♪ we see companies protecting the bottom line by putting people first. we see a bright future, still hungry for the ingenuity of those ready for the next challenge. today, we are translating decades of experience into strategies for the road ahead. we are morgan stanley. tonight, new data on how pfizer's vaccine stacks up against omicron. plus, the labor movement hits starbucks inside the effort to unionize. >>
it's another day. and anything could happen. it could be the day you welcome 1,200 guests and all their devices. or it could be the day there's a cyberthreat. only comcast business' secure network solutions give you the power of sd-wan and advanced security integrated on our activecore platform so you can control your network from anywhere, anytime. it's network management redefined. every day in business is a big day. we'll keep you ready for what's next. comcast business powering possibilities. tilray shares in the green today as it taps into whiskey. the cannabis company announcing it will require breckenridge distillery joining us now in a first on cnbc interview is tilray's ceo welcome back good to see you. >> good afternoon, sara.
how are you? >> doing well. thank you. help us understand the vision here is it whiskey infused with marijuana? what's the logic behind this deal and you are on quite a buying spree, as usual. >> first of all, breckenridge distillery is a fast-growing brand spirits business, the whiskey business has grown over 10%. it's actually the fastest growing within the spirits category next to tequila and vodka. i want to be in businesses which are growing fast you look at cannabis, it's going to be $100 billion opportunity in the u.s. the whiskey business will be about $100 billion right now, you know, i see the opportunity of taking spirits, owning the brands, and ultimately once cannabis is legal, you would infuse them with thc i think the breckenridge brand has so much potential to grow, so much distribution and then when cannabis is legal, hey, we will infuse it with thc.
we will come out with edibles with thc and that way millennials and our consumers know the brand >> so, when cannabis is legal is the key, and i know this is a big play to that is there something that's giving you more confident that this is happening sooner under the biden administration i it to be a -- we have a good about is in canada you know, europe is going to legalize, you know, with the new chancellor coming into play today, and, you know, point it i see germany legalizing we should hearing meg in the next few weeks
we have a great foundation in europe, the u.s. has not happened like i thought it would i want to make issue we have businesses that have growth, ebitda, but are adjacent to the -- >> i'm sure you saw recently barclays initiated underperform on your stock. they really poured cold water on this whole optimism over u.s. legalization, said it's not going to necessarily be a panacea for the industry, not just for canadian producers, but alsoly seeing a scenario where the u.s. could try to reduce consupposition not how do you push back on that i would say legalization could happen, but as i had best, to
grow into business, in canada, in europe we are in a grace place, whiskey is the fastest in regard to our beer and brand in, and we'll have in place, when legalization does have, a distribution, and ultimately, you know, we can ingest with cannabis or thc. it's been up this year, but so volatile what do you think weight is getting right or wrong snowe. >> once everybody thought
legalization was happening, everybody wanted toup in it's on the -- we do not own, you know, any cannabis businesses local legalization we have a diversified business or sweetwater, we have a great brand there i think, again it's just getting to know what tilray is it's just not a cannabis company, but a lot -- ultimately will -- and there has been a lot of cannabis company that haven't performed. i think we got some of the wrath from that. that's what happened to our stock.
we have great brands we're going to be the player there. owen simon, thank you for joining us thank you very much. all right, up next, today's under the radar winner, share of roku moving higher what drove that move when "closing bell" comes right back. has failed to take off. because it hasn't removed the endless mundane work we all hate. ♪ ♪ ♪ automation can solve that by taking on repetitive tasks for us. unleash your potential. uipath. reboot work.
all right. welcome back let's hit one under the radar. shares of roku popping today, finishes 18% higher. that's the best day since 2019 the company reaching a multiyear agreement to keep youtube on its streaming platform this comes after google threatened to pull its services starting tomorrow. 18.25% $256. >> clearly that was an overhang on the took. underperforming, it's down for the year. >> almost been cut in half still. a lot of these stocks, you know, were the big momentum favorites. big bounces today. fubo -- >> what does that tell you >> i think i. first of all, down a lot.
also, just grabbing some kind of higher beta, something that can move fast into year end. maybe it seem like an opportunity. it seems like a disorderly sell-off in a lot of those names last week. it wasn't price sensitive, once that pressure lifts maybe it's worth a pullback it's oaf we have these third kind of shakeout scary episode i also think, because in retrospect it was just no big thing, a passing pullback. you shouldn't underestimate how close we are to things getting uglier this week the way the volatility was contorted, the markets were not trading very well. it's not as if it was a forgotten concluding the only time it bounces hard -- >> the news better on the omicron variant. first it's mild, now we learned pfizer three shots, all of that good, but next week it does turn
to the fed we have a fed meeting. now the expectation is a faster taper. >> and the index is back to where we were before we ever heard of omicron so there's no reason that good news on omicron should matter that much. >> cpi, too, this week scott, thank you. that's going to do it for "closing bell. facebook bethins right now. >> thanks very much guys, overlooking glorious times square in new york city, this is "fast money," the big show tonight's trader lineup, guy adami, tim seymour, steve grasso, and jeff mills you're seeing them right there tonight on the show, the reopening rally charges on airlines, cruise lines, casinos, you know them, all jumping today, even as the broader indexes shrug off a bit. what these moves say plus roku rockets. the streaming stock seeing the