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tv   The Exchange  CNBC  December 14, 2021 1:00pm-2:00pm EST

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thanks, pete josh brown >> i can't believe nobody is talking about this it is the biggest breakout in the market berkshire hathaway b shares, printed a record high in late may, early june of this yoord. spent the rest of the year consolidating. we are about to close if we go out here at the highest closing price of all time in berkshire b shares what is in this? industrials, financials, two of the best sectors right now i would be long here >> thanks, everybody "the exchange" begins right now ♪ thank you, scott we have the flip side of what josh was just talking about. hi, everybody. i'm kelly evans. ahead this hour, an ugly ppi report has stocks in the red today. the nasdaq is slumping 2% when we look behind dom, still down about 300 points, all as the fed kicked off a big two-day meeting. will they look at inflation numbers and taper faster my next guest says it could stay
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ugly for a while and he has four name to ride it out. what is going on with media stock? they've been crushed today we will see what is driving the losses and who is best positioned to turn them around big calls in rapid fire today, disney, apple, chipotle and more the story and the trades ahead this hour. let's get the specifics. dom kchu here to do the numbers >> the specifics are as you pointed out. you are seeing on a relative basis this flip side trade is it a rotation, is it not. >> reporter: the nasdaq composite, 15,113, down 300 points, down 2%. you juxtapose that to the dow industrials, down about 200 points which is only .5 of a percent. if you look between these two indices, the s&p 500, 4,608, down about 1.25% 60 handles to the downside to put a little context around the major indices here one place you are seeing a relative outperformance, believe
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it or not, is in the small cap stock market look at this as the i shares russell 2000, etf ticker iwm, down about 1% today, so not nearly as much as the overall nasdaq composite but the reason why is that it has been locked in this range for a while, for the better part of a year. it is now at the bottom end of the zone here, so as traders start to wonder what the russell 2000 small caps could be telling us about a broader market narrative, this could be an area of support that some are looking to dip their toes into maybe it explains some of the relative outperformance versus the nasdaq overall if you are looking for the meme stocks, check them out today remember both amc and gamestop, the ogs, the originals of the particular meme stocks down big today, about 13%, 14% or so. gamestop shares off the session highs but still up 3.5% and amc entertainment about 3.75%. but, again, kelly, 13%, 14%
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downside yesterday, they're both well off the highs from the meme frenzies earlier this year we will see whether it plays to the downside or if they hold a little over here back to you. >> thank you very much, dom. it wasn't 10%. it wasn't 10%. markets were braced for ppi to hit that rating on a yearly basis in today's report, but instead it came in only at 9.6%. only still the highest on record. the response in bond yields, the ten-year edged higher but the bigger response as dom was showing us really in the nasdaq today, down 2% it is down about 7% from the late november highs. my next guest says buckle up, markets will be choppy for a while. jason brady, welcome how choppy >> well, look, we'll see tomorrow a little bit, right the fed tapers faster than the market currently expenses and you continue to get some flattening in the yield curve, a lot of the market leadership we
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have seen over the course of the last year or so has much more shaky foundation so i heard in the last hour a lot of commentary around dividends, valuations. i didn't think that was a 2021 conversation but i think it will be a 2022 conversation >> wait a second because i think you are throwing some shade here tell me what bone you want to pick about dividends >> oh, no, the opposite. i think actually focus on cash one dividends is something that's been missing from the conversation as i heard some of the folks in the last hour talk about their names, you know, they weren't talking about game stock going down 14 and up 4, they were talking about businesses where we think investors should focus given coming volatility. >> we teased you have four specific places, these look like specific names walk us through them a couple of these at jpmorgan jump out at e, although each one we could talk for a long time
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tencent is on here what is total energy >> it is a french-based internal oil company. >> gotcha. >> it is an under appreciated esg story given the transition that has to happen through natural gas, they're being a natural gas producer 6% dividend yield, and obviously something that has some protection, at least in the medium term, from inflation. good valuation obviously good cash flow the entire energy complex is focused much more on cash flow, and i think it shows up here in this name. >> what about visa and jpm i'm lumping them together but visa has a lot more particular headwinds it has been dealing with >> sure. you think about the names together for us, a lot of what we are thinking about at thorn berg is portfolio construction and balance. if you go totally to one side or the other side, you end up with an unbalanced portfolio. some element of growth and paying for growth. now, visa is expensive on a p/e
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basis but obviously has had a tougher year we think the playbook for fintech is not so much to take over from visa but ultimately to be subsumed by visa and their ilk. it is a valuable network, so that's one side. also financial, but totally different business model, jpmorgan this is absolutely a benefit from higher fed. >> tencent now i mean the china names have so many problems. tell me why you would want to wade into these waters >> sure. so, first of all, like i said it is a balanced portfolio, right so if you said the u.s. did really well and china did really terribly this year so let's keep betting on the u.s. and sell china, you know, i like to buy low and sell high even though sometimes it is harder to do in the context of a balanced portfolio it is easier tencents is down 17% we believe a lot of the regulatory headwinds are in the name, but you look at the p/e and the growth, this is
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something that easily is growing in the high teens, and with a similar multiple, that kind of profile just isn't -- doesn't exist in the u.s. market so a good part of a portfolio. >> so final question is where do you think the nasdaq is going from here, significantly lower >> look, it is a great question, and somebody smart once told me not to put a date and a number in the same sentence but, look, if i -- if i'm betting, i think the fed really is going to address the cpi numbers. i really do think that for some of the names that are not quality, that are not cash producing, names that are the meme stocks, for example, not the microsofts and the googles of the world, those are going to be in much more trouble. so the nasdaq is a big market. it is driven by large cap names, that will be a headwind, but not nearly as much as down the cap stack to the less profitable companies. >> a lot of which are down big from their highs jason, thanks for your time. jason brady of thornburg >> thaurg so much. take a look at media and
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telecom names. discof discovery and comcast at the lowest level in a year what in the world is going on here let's ask julia boorstin julia. >> well, kelly, a combination of factors have been waying on media stocks, concerns about slowing streaming growth and ad spending, under pressure from supply chain constraints then, of course, there's the uncertainty about the future of movie going, not to mention covid's impact on theme parks. some media stocks are bouncing off lows comcast is up over 2%. discovery and at&t both up fractionally today, but this comes after both comcast and discovery hit a 52-week low earlier this morning mcclary research downgrading comcast today saying, quote, a moderation in broadband growth combined with potential delay and recovery at the parks along with ongoing investments in content creates an overhang on the stock for the time being
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they're saying it is becoming more cautious on traditional media overall as streaming wars go global. it lowered its price target on disney, fox and viacomcbs. morgan stanley lowering the price target on disney, though maintaining its overweight rating on the stock, saying shares have overreacted saying that the media giant has things that stand apart from the competition. they say a key point of the concern is whether disney's u.s. streaming business has stopped growing. for all of the companies there's huge pressure to shift to a direct-to-consumer model and keep the subscriber numbers moving higher. >> they're all in slightly different parts of the media space but sinking together, wu you said it, but suggests that competition is a problem i even think about star link and we have talked to analysts about this, asking about a name like comcast, obviously self-interested there. like, you know, they've got wireless, 5g pressures coming. then there's regulatory
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concerns then by 2024, so we could be talking about competition from star link. are they right >> well, look, i think there's definitely the sense of convergence. i was e-mailing with craig moffett and he was saying that he sees convergence as being an issue here, and that, you know, is a perfect example of the fact that comcast is now selling mobile services as well. of course, you have at&t in both broadband and mobile, though they're getting out of the traditional media business but i think there's a sense that all of these companies are going to want to connect direct with consumers. yes, there is this broadband business that may not be growing at the same rate that it was earlier in the pandemic, but it is still a valuable business when it comes to the media assets, those are best served by a direct-to-consumer relationship, especially as you look at the challenges with targeting advertising with apple changing its operating system and the challenges it has given to facebook. when it comes to the media giants, the fact they're getting
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better and better at targeting i think will give them an advantage going forward. >> all right i'm going to hold you to that. julia, thank you so much good to see you today. julia boorstin tesla is about to snap a six-month winning streak as it is down 6% in december are investors shifting to competitors? we will explore that plus, the street as top picks for 2022 get excited. we have them coming up in rapid fire a quick check on the dow as we head to break travelers is leading don't see that often microsoft and salesforce lagging as tech is under appreciate why today. we're back in a moment as an independent financial advisor, i stand by these promises: i promise to be a careful steward of the things that matter to you most. i promise to bring you advice that fits your values. i promise our relationship will be one of trust and transparency. as a fiduciary, i promise to put your interests first, always.
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(cheers) xfinity brought us together, after all! power your whole home this holiday with wifi speeds faster than a gig. click, call, or visit a store today. sing 2 ♪ welcome back it has been a tough month for tesla investors and wie're only eight trading days in. tesla has dropped almost 30% of the day, giving up a third of the gain for the year coming into the month it is not even a trillion dollar stock anymore. is it elon's fault for selling stock or is competition from the likes of rivian having an effect garrett nelson is an analyst at cfra and he joins me now what is your diagnosis >> thanks for having me. we think it is a combination of the three. it is elon musk selling a lot of stock. obviously the company's largest shareholder, he owns about 20% of the company, so it is really
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hard to buy when he is just unloading as much stock as he has been over the last month or so it is an increase in competition from the likes of rivian, lucid and traditional automakers who are dramatically increasing their investments in electric vehicles there's other factors such as the semiconductor issue, chip shortages and supply chain issues which we see lingering well into 2022 >> the first one you mentioned which are his sales are nothing fundamental about the stock, you know so if i were a buyer and i liked it for the other reason, his sales would have been a gift it gives me an entry point lower than a few weeks ago >> we think that's right, however, we think the stock is over extended to the upside and it still is. the valuation is still hard to justify. trading, still trading north of 100 times our 2023 earnings estimate that's still a multiple where we're still cautious we have a hold on this stock it is still slightly above our
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price target however, we do think the valuation is becoming more interesting here following this sell-off >> we are at 940 remind me what your price target is >> it is 875 >> and 875 means while we could have a little bit more downside, you are starting to see this valuation making sense to you. so then what do you think we should consider in terms of the legitimate competitive pressures from something like rivian, on the one hand motor trends car of the year and on the other hand they're a minnow compared to how big tesla is >> sure. we still think tesla has major competitive advantages longer term when you look at their goal being to grow their annual auto volumes by a factor of 40 over the half million autos that they sold in 2020, so they want to grow it to about 20 million units a year in the year 2030. so we think they have a significant competitive -- significant cost-to-capital advantage. however, what you are seeing
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from the lucid air, for example, is a product with specks that are on par or superior to the tesla product, which we haven't seen in the marketplace until recently >> absolutely. maybe it is a preview of what is to come. but then they did just announce there are -- maybe it was a musk tweet where he said cyber truck is now going to be aquad motor are they going to be able to keep up with the new features competitors are offering >> it is going to be difficult you look at tesla's market share of the u.s. ev market, they have close to 80% market share of all-electric vehicles sold in the u.s. it is hard to imagine that market share growing any further from here, and that's really where tesla has excelled over the last five or six years, is growing the market share dramatically and becoming the major player you will have a lot more competition. you are seeing it now, and you will have a whole lot more competition showing up in 2022 >> all right garrett nelson, thanks for joining us today it is good to see you. garrett nelson with cfra still ahead, we talked about tesla, the nasdaq, the media
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names, but there are still more under performers to investigate like fintech huge losses in some of the biggest payment names this year. over sold yet? we'll find out next. the senate wrapping up its hearing on stable coin, capitol hill's second meeting in less than a week. joining us ahead to talk about the likely fall out and why bitcoin is down nearly 20% this month. stay with us
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uipath. reboot work. feel stuck with student loan debt? ♪ move your student loan debt to sofi. earn a $1,000 bonus when you refi— and feel what it's like to get your money right. ♪ welcome back we're off the lows the dow was down more than 200 points, down 150 right now it is actually the outperformer. the nasdaq down 381. we are watching it closely we are starting with uber and lyft, higher on ceo comments that last week's was uber's best
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week for gross bookings. think about that that has both of these stocks up, lyft near 2% next, beyond meat bouncing off the 52-week low after piper sandler upgraded to neutral saying a nationwide launch of the mcdonald's beyond meat burger is coming up nearly 9% today third, adagio therapeutics continues the awful year for biotech stocks they spiked on hopes the antibody drug would work against omicron. today they're saying it won't. shares are plunging more than 80% and they just went public in august now to rahel solomon for a news update rahel. hi, kelly. here is what is happening at this hour. if you are heading to an apple store make sure you have a mask because it is bringing back mask rirms at u.s. retail locations ahead of rising covid infections this was a month after they
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dropped the mask requirement they will limit capacity at some locations. the nfl is requiring coaches and staff to get covid booster shots, the announcement coming a day after 36 players tested positive, the most ever in a day. players are not affected by the mandate because changes in their covid protocol must be negotiated with the nfl players association. and on the news tonight, encouraging results for a covid pill a new omicron warning. that's tonight at 7:00 eastern this year 14 more billionaires promised to donate more than half their wealth including the ceos of doordash and pintrest the giving pledge says there are now 231 philanthropist from 28 countries who promised to give away half their fortune. back to you. >> ra tell, thank you. coming up, the big calls for 2022 some have been winners this year, some have been losers. will wall street be right? more in rapid fire next.
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♪ welcome back all right. i've teased it enough. let's get into the top calls for 2022 in this edition of rapid fire joining me, cnbc's seema mody, delano sapporo welcome aboard, everybody. we will start with the most obvious consensus name of the whole list, and it is apple. evercore naming it a top pick for next year. they call it the roaring 20s they see continuing for tech they see sustained upside for the iphone and wearables, still below the $3 trillion, up 30% this year. chris, are you a buyer >> i am not, kelly thanks for having me back again. you know, it is just such a consensus pick i don't get this one compared to the alternatives in the faang universe apple is supposed to grow earnings about 8% next year and it is selling for 28 times those
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earnings a stock like google, for example, is going to grow twice that rate and selling at 22 times. facebook, again twice the rate and selling at 21 times. people forget that iphones have good years and bad years, and if they have a bad year, as recently as early 2019 apple sold at only 11 times earnings so, you know, there's a lot of potential downside and there's more upside in other names >> i can't believe you are willing to go on the record with that seema, what would you add? >> listen, i think, kelly, the valuation argument will be valid given the out performance in the stock this year. there is though an overwhelming number of analysts who are bullish on the stock we are talking about 33 buys, eight holds and one sell rating. i guess the question is what takes the stock even higher. is it the arv headset, apples experience in the wearables category give it an edge over a company like meta or simply share size with 150,000 employees and not to mention a
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lot of cash, does it make the rate of success higher than other companies trying to tackle this metaverse >> chris, i wanted to circle back to you for a second >> sure. >> apple, you mentioned some peers, if we were to say within tech what would your top pick be for 2022, what is your >> i would mention those two names i did before i would say, look, who is marginal buyer for apple isn't everybody already on board. it is a tougher game to play there's a lot of controversy around facebook and some around google and it gives opportunity on the outside when those things are resolved >> delano, where are you on them >> definitely a holder here and i look for opportunities to buy when the stock dips. i think the valuations are valid. as seema mentioned they are making bets in other areas, talking about wearables and the service business, the subscription revenue which is growing to the upside. i think holders want to hold on and look to 2022 because there
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may be more opportunities for buying on dibs >> we will leave it there and move along to maybe the second most obvious name which is chipotle goldman naming it a top restaurant pick. chipotle sales grew 20% in the third quarter including an 8% jump in digital sales and this company added more than 24 million members to its loyalty program in just 2 1/2 years. the shares are down 15% from the 52-week high but still up 20% this year. seema, you know, again, i'm joking a little bit about some of these being obvious because they're only obvious until they're not or to chris's point if they're too obvious then there's no room for performance left sometimes >> no, it is a great point last time, kelly, that ceo brian nicholl joined us on cnbc in mid-november he talked about the threat of the labor shortage but pointed out how it has accelerated chipotle's investment in digital, which we know was one of the key success stories in the pandemic, how it allowed chipotle to outperform
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in the report from morgan stanley the survey finds it is a company within the quick service space with a higher proportion to mid to high-income consumers that can deal with higher prices if prices are continuing to rise in 2022. it has that target consumer. >> delano? >> you know, i definitely think there's still upside for chipotle i think they're looking at the consumer, everyone is talking about the bifurcation, i think we have to consider there has been wage increases across the board obviously. there also is an area where consumers had the most they've had in savings, i think that spending will continue out to 222. we mentioned the labor and input cost pressures that will be a point of contention, but chipotle has a brand where they can pass it to consumers the big thing i like is the digital ecosystem where they're driving the membership loyalty the stock has taken a bit of a dip so there might be an opportunity for a buy. >> chris, are you swimming with the tide or against it >> i'm swimming with the tide here the only thing the smart folks hasn't mentioned is inflation.
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inflation is good for the restaurant business as long as they can control the input costs and i think chipotle can do it pretty well. earnings are nominal and inflation will push the earnings higher i like chipotle a lot. >> we have done apple, we have done chipotle. let's do media now nor the slightly less obvious, how about disney it is down 15% morgan stanley naming it a top idea with 20% upside from here delano, is disney going to get its mojo back? >> i think the one area where we can see if they get the mojo back is obviously we're looking at the theme park area side of the business disney plus, we have seen that side of the business go and direct-to-consumer content is going to grow. they have to bring more original content to the table but i'm looking to see what happens with the theme park side of the business which will be a big contingent with happens with the different variants that are popping up i think there's still more to consider on the business side
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there, but i'm still going to be a holder for disney. >> chris, what about you >> well, i got to tell you, kelly, this is my rapid fire favorite today because disney is going to win in two different ways they got slammed this year, it is obviously a reopening stock don't forget, the last 10% of capacity at the parks isby far the most profitable. those parks have enormous fixed costs. so once you totally fill them up, which i think will happen by end of the year, that's amazingly profitable plus, the second way they win is disney plus. it is having kind of a mediocre year this year because of the compares of last year with the pandemic are so difficult, but content will win out at the end. i think disney is second to none in content so i think it is a real win and a real opportunity >> chris, the one thing i wonder sometimes for both netflix and disney when people say, okay, it has been a good content year, it has been a bad one, but content is really expensive. everybody wants the best content, so i think more it raises the question how much does disney have to spend in
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order to maintain that pipeline of premiere content. >> well, i think netflix is much worse off in that regards because so many of those things are out of netflix's control they will buy names to put on besides the things they create but disney is creating internally, "star wars" and pixar, and they have spent the money and now can reap the benefits of it the other thing here is that disney plus is relatively inexpensive and disney, like they have at the parks for decades, can raise prices each year and still make a great return that way. >> yeah. >> i think there's a few levers they can pull. >> seema >> kelly, this is a media and entertainment company but also a company that really relies on travel i can tell you the latest traffic trend suggests bookings are down because of the omicron variant. you have to wonder what it means for the theme park business. you know, the expectation that it gets back to 2019 level, does it get pushed out even more? also, we should point out this is a stock that is not only down a lot from its 52-week high, we
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are looking at the worst performer on the dow in 2021 >> wow >> interestingly enough, wall street says it could be a good pick for next year >> unlike apple and chipotle this is an underperformer people think could shine. we will leave it there and move to the final and least obvious pick for 2022. consumer staples goldman says they're poised to rally after a quiet 2021 they say investors will grow to appreciate the predictable revenue stream staples is up just 21% this year the top picks in the space, p&g, kons tellation, monster. staples are picking up steam they're the best performer on the s&p this months. tootsie roll, believe it or not, tootsie roll is the sector standout so far in december. delano, what would you do with staples? >> i am thinking about oloplex nor my hair as well. i am looking at it from a standpoint i want an area with more growth. the other area you mentioned
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that's more incumbent, and they're a disruptor in the health and beauty space. i think that's a big part of looking at it from that standpoint as well they do a great job with hair and salons which is important, they drive social media engagement i have been watching and it is obviously growing and they're also spinning off cash margins are pretty high as well which is important for a growing business to be able to meet demand i like oluplex here, kelly >> i will be curious how the sector does with the fed, if they're raising rates, where bond yields go, is it a help or a hurt, seema? >> yeah, and what it means for inflation as well. i spoke to the president with a portfolio of different liquor sales and they were saying despite rates going up next year they think demand for their premium brands will continue to remain high because the customer has gotten so comfortable, so appeal to these type of brands they think it doesn't go away.
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maybe it bodes well for the broader consumer staples base. >> chris grisanti, close it out for us if you have favorites in consumer staples >> sure i do i like the whole group because i think inflation, once of all, it is a good place to beat off those effects. for the first time in a generation, these stocks which have been dogs for ten years or more, can really have pricing power. among them we like the beverage stocks, i like the constellation brands i think they have standout differentiated products we can price better >> thank you, everybody. for this edition of rapid fire still ahead, fintech has been drowning in recent months we will look at why and which stocks could be first to break out. and embracing the new monitor block. we have details next on a new offering stay with us
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it's a thirteen-hour flight, that's not a weekend trip. 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. ♪♪
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♪ welcome back have you seen robinhood lately shares are trading below $19 this stock priced its ipo at $38 and at one point traded up to $85. it is not just hood. coin base down more than 40% since it peaked in april raul castro block, down 40% from august highs including a 25% slide in the past month we have news out on cash app's new gift offerings for that we turn to kate rooney. >> hi, kelly block will let users send payments through its payment app. it is roll inout the new feature a couple of weeks before christmas. appealing to those of us who may be looking for last-minute digital gifts. cash app let users send bitcoin to users if they owned the crypto coin. they can send crypto from
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balances or fund it with a gift card they don't have to own biotechnology coin or the stock they will send the recipient can choose not to take the gift and take cash instead. this is key, kelly u.s. users can only send these gifts to other cash app users. this really is a classic fintech playbook for customer acquisition, building on what analysts call network affects. it relies on word of mouth when you go to send somebody money or a gift in this case to a friend or family member, it gets them to sign up to the app. they do the same to their friends and family, so really a snowball effect here fintech like robinhood, square, paypal, venmo, relied on things like gifting and referrals as well as giveaways to drive user growth it is a way for the cash app to differentiate from a growing list of fintechs offering competing programs, companies from affirm to paypal have talked about being the go-to finance app for users.
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kelly. >> i was going to say i'm going to get it so i can gift it unless the other apps start to offer the same thing thank you, kate rooney despite fintech struggles i was just laying out, my next guest is sticking with the space. she has a buy rating on traditional and newer rating payment stock. lisa moffett, it is great to have you back. cathie wood was just out here saying the reason innovation stocks have been sliding is because of inflation would it apply to the fintech names? >> it would definitely apply to square lisa ellis with moffett nathanson. it has a lot of the valuation tied to the long-term value in the company which as interest rates rise naturally compress that companies like visa and mastercard which, as you highlighted, have been weak, they're being primarily affected by the lack of the virus variants, the lack of recovery
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in cross border travel, which is a major part of their business pre-pandemic it was over 20% of revenues, is still down at, you know, only about 60% of 2019 levels it continues to be a painful drag among those businesses. that's really the primary thing weighing on those ones >> there's a lot of competition. this reminds me a little bit of the tesla discussion we were having where if you blame elon musk for driving the price lower, then as an investor you should love it as a buying opportunity. for any of these names do you think they created good buying opportunities? >> yes, particularly for the networks, visa and mastercard, because what is mixed into this now is a lot of nervousness around disruption or substitution, but i would say a lot of that is over done there's not a lot new there. actually, these stocks should perform very well once we finally see this sort of lagging recovery in cross border eventually borders will reopen and people will travel for example, for both names we
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expect revenue growth to be as high as 20% for the next couple of years as they're making up that the other one, yeah, is -- which where i say there's a buying opportunity, a square or a block -- i'm sorry, block. where a lot of the recent weakness that you highlighted, down 25% in the last few months, is because the cash app business in that app you and kate were just talking about is lapping really high growth during the pandemic but they've got the big catalyst from afterpay acquisition, the big australian player they bought earlier in the summer, coming in 2022 which will be a nice catalyst for cash app >> for visa and mastercard you have a 460 price target for mastercard 300 for visa 340 for square let's talk about that for a second why are they in the buy now/pay later space? >> square, yeah, the -- what
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afterpay brings to square is a couple of things one, they bring consumer credit products into the cash app currently cash app is only debit based and person-to-person payment. they're adding a nice credit ability to the user base afterpay distinctively has digital marketing and shopping services in their app. so in australia where afterpay is really strong, 30% of the volume of the app initiates through the app. people actually are shopping through the app and square is really excited about the ability to bring some of that capability into cash app to drive more, you know, user growth and user engagement growth directly out of theapp. yeah, really exciting. >> absolutely. that's big, you know, those are big numbers are citing again the rest of more traditional you are not as high. buy rated on visa, mastercard
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and square thanks a lot >> thanks. down 40% and we will reveal it next. every time we have been talking about a stock it has been an under performer. follow the cnbc exchange and get my show and longer conversations with kelly again, follow bccn "the exchange" wherever you get your podcasts we are back in a moment. to page 188... uh carl, are there different planning options in here? options? plans we can build on our own, or with help from a financial consultant? like schwab does. uhhh... could we adjust our plan... ...yeah, like if we buy a new house? mmmm... and our son just started working. oh! do you offer a complimentary retirement plan for him? as in free? just like schwab. schwab! look forward to planning with schwab.
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♪ welcome back it is a dark day for solar california lawmakers could massively lower net metering payouts and supply chain issues aren't helping the stocks either pippa stevens is here with more for us pippa. >> kelly, that's right solar stocks are selling off sun run, sun power, sunnova all down following regulatory headwinds and ongoing supply chain problems on friday we talked about a coming update to california's residential solar incentive program. it is now out. it is complex but essentially it would slash the incentives that made california the biggest solar state in the u.s the credits solar customers receive for sending power back to the griddle drop by 80%
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according to some estimates. customers also will have to pay a monthly grid connection fee. for the average solar system this would be between $40 and $50 a month. utility companies are applauding the move with pg&e saying it is a step in the right direction. they argue solar customers haven't been paying enough nor the grid solar groups though are not happy. seia said it will tarnish the state's clean energy legacy. important again to note it is only a proposed decision there's now a comment period and we'll get the final decision no sooner than the end of january but this isn't the only headwind for solar. wood mckinsey has slashed the 2022 growth forecast for the u.s. solar industry. they said the market will grow 25% less than prior estimates. this is thanks to supply chain problems, rising costs and policy uncertainty >> so $30 to $40 to hook up to the grid
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>> $40 to $50. >> to hook to the grid, completely changes the calculus when you are trying to figure out to go solar which raises the issue, why are these households paying for their ability to go solar when the utilities could go solar and save us the trouble. >> lot of different opinions on this topic with solar or if it's larger scale utility scale solar projects and in between is probably what people say is the most logical conclusion, but that grid, that interconnection grid charge on a monthly basis is absolutely huge and that really, really changes the payback period for system cpu says the payback period is ten year, but scia said it might not even work out if those fees are installed. so a lot of questions here we're expecting pushback from the solar industry so that final decision -- >> is there any good news if you're looking at this from the industry's point of view here? >> i guess one element that is
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positive is that these new proposals would incentivize storage. rooftop panels plus storage, they can better take advantage of the new net meter structure and that would also help the grid because then they could tap into that it wouldn't overwhelm the grid they wouldn't have to fire up peaker plants. but right now, these stocks are just down across the board a lot of questions >> it's a great point. pippa, thanks for covering this. appreciate it. crypto execs are back on capitol hill up next, we'll talk to one who testified in the first round last week about the future of regulation and the recent crypto crch ckn moment ♪ ♪ ♪ digital transformation 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.
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crypto executives testifying before the senate today making a case for stable coins as lawmakers wrestle with how to oversee a crypto industry with more than 2 trillion in assets one of the companies in
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attendance is circle the ceo says we're in a pivotal moment for digital assets and it's critical the usda coin becomes in currency. this is a clever argument. explain it to me >> i think the basics are we're working on collectively a new infrastructure layer for the internet a lot of people call this web 3, but essentially, an infrastructure layer that supports the exchange of value, supports the more efficient conduct of finance and commerce and a critical building block of that is going to be representations of major currencies dollars being a preimminent one. there's an opportunity for the united states to lead in bloc chains, in making sure that the dollar is the currency of the internet and what's taking place today with stable coins is really foundational to that. it is the protocols and the money formats and frankly, the
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evolving regulations that are going to allow the dollar to become a primary currency on this new infrastructure layer. >> i totally see your point that as much we all worry about what's going on with stable coins, it would be, if we do say, okay, you can't do them in the u.s., then okay, someone in china or someone else will say great, we'll be the oxygen of sort of the crypto financial industry and we will call the shots. so from that point of view though, i know regulators have at least thought about having the dollar itself be that digital currency why should your stable coin serve that purpose >> i think the first thing to remember is that is dollars comes in a lot of form factors there's a paper and coin version. there's the ach form the credit form. the paypal version and now there's digital currency forms of the dollar. the technology of bloc chains and digital currency are
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ushering in a model that looks and behaves a lot more like the way we experience the internet for communications and content and data so really, it's an upgrading of the form factor of the dollar. behind that, we need safety and soundness. we need to have rules around protecting against financial crimes we need to have frankly, federal statutes to define these kinds of large scale issues such as circle for most people, it's just to understand that the open internet and private sector innovation is blazing a trail no for a new set of technology for money and finance and there's an opportunity to connect that to the actual dollar system >> goes back to on and off ramps from crypto ecosystems certainly, i would hate the see the u.s. lose its advantage in building web3 because it is too heavy handed with regulation, but what do you think is the most likely outcome from this hearing? and what happens if there is a
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run on some kind of stable coin in the future and people are going to be furious. >> i think there's two questions there. the first just to kind of make it clear, they're regulated like paypal or stripe or square all these types of products and we're required to hold 100% liquidity, reserve against those dollar obligations now, i think this is becoming such a big potential part of payment system of the financial system that having some kind of special form of bank charter or federal supervision probably makes sense. so that's ultimately i think how consumers, household, firms, are going to get comfortable that yes, this is a cash equivalent instrument that i can use on the internet >> we went through this with money market mutual funds.
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are stable coins playing any role in the recent crypto slump we're seeing >> well, you know, dollar stable coins, you know, as i like to say, they are valuable in any kind of market condition whether the market's going up or down or sideways, but they have general utility. so they're useful as a way to settle transactions. whether it's a business, a person sending a remittance, et cetera things like usdc are connected to what's taking place in capital market, but they're increasingly very much being used as a general payment medium on the internet. >> your prediction for bitcoin are we hitting 100 k before december 31? >> it's hard to see. >> thank you for your time how do you answer the question anymore after that >> very diplomatic answer.
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>> that does it for the change "power lunch" begins now >> i'll see you in a sec welcome to "power lunch" and here is what's ahead we've got a busy hour. buy this, sell that. from taper to tightening, the fe fed expected to speed up its tapering timeline. we'll be there for you all day in the afternoon to watch that story. meantime, the stocks to own and the ones to ditch ahead of that big decision what goes up is starting to come down high flying stocks faltering the memes creating soft cracks in this market is it a sign that valuations now are beginning to matter once again to investors and a regional banking player the ceo of valley national will be with us to talk about rates and why some inflation he thinks is permanent >> all the major averages are lower, but the dow is only down half a percent while the nasdaq is down 2% points wise, almost double what the dow is microsoft and sale


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