tv Worldwide Exchange CNBC December 15, 2021 5:00am-6:00am EST
companies. how will beijing respond fighting covid or big covid overreach. the steps google is taking with vaccine enforcement. elon musk is at it once again and going after elizabeth warren it is december 15, this is "worldwide exchange. >> good morning. good afternoon good evening from wherever in the world you may be watching. happy wednesday. happy fed day. let's get to your markets and man. we weren't expecting a whole lot. no hike is expected but the language jay powell may use today about when those hikes
could come and how many there could be next year is the key to, well, everything so we'll wait until 2:00 p.m another down day after the market hit small caps. that is falling more than 1% the third day down words like microsoft and adobe that have been white hot nasdaq is now off more than 6% we also continue to watch crypto after some wild moves we've seen even for crypto and things like doj coin and yesterday some of the major cryptos are higher right now. crypto back above 45,000 oil down under 1%. at risk of falling below $70 a barrel got to look at bonds you talk about the fed, you always have to talk about bonds. the treasuries and equity
futures not doing a whole lot. makingthat call about interest rates and yields coming down they've been right sitting still below 1.5% even with the idea of rate hikes. that is pretty dog on remarkable i'm not sure any market at this time in history has ever seen. no doubt overseas, they are also waiting. julianna tatelbaum in the london news room. is the fed on your radar all the way over there >> brian, good morning it certainly is. investors bracing for today's federal reserve meeting which is a bit of a warmup to tomorrow's central bank day here. we have the bank of england and ecb all coming out tomorrow. investors will be watching closely what happens in the u.s. the majority of trading stocks
are trading higher the cac in france trading up leading the way. ftse 100 down .4 of a percent. key inflation data out of the uk this morning crucial ahead of the meeting where investors will be closely eyeing how to display this data. they had been expecting a rate rise that was ahead of expectations and what we saw we've got technology leading the way higher auto, utility and real estate we've got h&m and imitex and
updates that seem to have left invoeftors wanting more. brian, we'll hand it over to you. >> julianna tatelbaum in london, thank you very much. back home, congress burning the midnight oil to narrowly avoid a u.s. default back at hq with that and some is other top headlines. good morning >> good morning to you >> the house passing that bill to raise the debt limit by $2.25 trillion in a vote last night. the default prevents another clash of the debt ceiling until after next year's midterm election the only republican to vote with democrats to pass the bill the senate a proved the measure along party lines. now heading to the president's desk for his signature uber is looking to sell stakes
including its holdings of beijing's didi global. calling the chinese market a tough one with little transparency due to a price war with didi. upgrading to a june filing and elon musk getting into it with warren over twitter over taxes. warren calling the tax code rigged saying it should change and see if the person of the year will pay taxes and stop free loading off everyone else. he tweeted he will pay more in taxes than anyone in history this year. adding, don't spend it all at once oh, wait you already did.
critics say $10 million. hard to say if that would be a record, it is certainly one of the biggests ever. >> couldn't we all aspire to have a $10 billion tax bill. that's what i would call a good problem. >> i think so. >> how much did you pay in taxes this year? $10 billion. how much did you pay zero >> back down to the markets. it is decision day the fed widely expected to speed up the bond buying program known as taper all to fight inflation which is spiking. speaking to ceo mmoynihan sayins it more of a question of when and how fast
>> you are seeing this hanging on they know they have to do their job. chair powell was clear about it. how they do it will be a judgement based on time. they can start to normalize policies let's talk more about this, the fed and inflation with our friend and chief strategist. great to have you back on an important time we have been rightly focused on covid and the pandemic the better part of two years does the market focus now shift or has it already shifted to the fed? you look at the inflation data
the core is probably running at the 1.5 level probably running twice the level we want to see seeing significant acceleration of the tapering the fed laid out a month ago. they've been tapering at a pace of $15 a month we think they've doubled that to $30 billion in january, february and march. that means the taper period will be completed and sets us up for what we think is a series of rate increases over the balance of calendar 22 and 23. by the end of 23, interest rate funds rate level could be 125 basis points than they are right now and i think that's what the market is focused on
>> 1.75% can stocks like s&p 500 or groups of stocks survive and thrive during a series of rate hikes or will it knock the knees out of high multiple, fast growth companies like some of the favorite tech names of maybe your clients and the cnbc viewers? >> i think you are spot on up 117% since the bottom of the market in march. not what we expect going forward. earnings will be up 8 to 10% stocks will be up to track that. our target to the full year is 5,300 the value stock is trading
at about 17 times forward earnings tech stocks are twice that these value stocks are the pricing power that can increase based upon the higher wages, shipping costs, commodity costs. you've got go cheap here with more attractive names. >> is the run of super cap tech high valuation and multiple. is that overfill are we going back to the days you wachbt slow and steady as we say boring may be the new
sexy >> the picture i painted is in terms of fed volatility next year, how will the commodity respond. the much higher pe technology stocks we think are likely to be more at risk than the lower beta, lower pe value stock you'll play a little bit of defense and we look forward to next year. we think it will be a good year. but valley and small cap will be the winners over the coming year >> got it. value, smol cap. some ideas for our stocking. very festive love the tree and everything about it thank you for coming on early. >> thank you and merry christmas, brian >> merry christmas as well coming back. hope on the horz his take on two
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well covid cases making the headlines. they probably shouldn't. outcomes should be the headlines. lost in those case counts are new hope for better outcomes fewer hospitalizations and fewer deaths pfizer announce the new pill is safe and effective for staving off death and disease in severe groups reducing severe disease and death by 88% if given within five days of the onset of symptoms another company called brie bioscience whenever you send out a note like this, i read it and
appreciate you coming on the program. i know we are omicron focused, case count lost under that is some new hope talk to us about the pfizer pill it looks good but is it going to be approved? >> i'm pretty confident the pill will be approved they went to an ad com still marginally in favor of approval. pfizer's drug has much better efficacy reassuring to see that hold up we are almost certain this will approve it by the end of next year or weeks away pfizer says that they can apply 128,000 in the next 15 days. next year, they have 80 million
courses of capacity. we have seen governments buying it and individuals trying to get it through their drugstore we think they could well sell out most of the 80 million doses which would be remarkable. >> this would compete with the drug from merck. i understand the merck treatment. you've got to take a lot of pills very quickly right after symptoms or exposure with the pfizer pill, we know you've got to start it fairly quickly with exposure or symptoms what does that mean? oh, my god, my wife tested positive i've got a stuffy nose >> it is pretty straight forward. you'll be taking 300 milligrams
of the active inhibitor and 100 milligrams of the booster. i believe the course will be twice a day. they are little blister packs. it won't be a big treatment burden it is very different from the merck drug there will be some people that won't be able to take it it is a pk boofter and designed to alter liver function. there are drugs that will inhibit. diabetes medications and other drugs. nonetheless, this will be pretty easy to take as you point out, even after five days after you started course, lu get the benefit
you get symptoms >> could be a game changer >> let's talk about the company known as brie biosciences. it is very early the drug not even named yet. what are they doing? >> so brii is the leading drug maker out of china there is quite a few of them now. brii is purely focused and have an antibody cocktail developed in china there are two still maintaining
welcome back a lot going on outside the world of business. let's find out with the key headlines with pm and more on that >> overnight, the house voted to hold mark meadows in contempt. the former chief of staff to donald trump defied a subpoena he refused to testify citing privilege claimed by former president trump. >> president biden will travel to meet residents of mayfield.
up north, look at that interstate 80 shut down for several hours. that storm wreaking havoc. speed limit controls are in effect for the sierras the nba has a new three-point king seth curry sank his 2,974th three pointer passing ray allen for the most in nba history. he's now hit a three in 152 straight games he's five games away from that record that he owns with 157 conse consecutive games. safe to say this is the greatest shooter of all time. it is bittersweet. i'll tell you why. his dad was a virginia tech hokie, my school he wanted to go to tech. that was his top choice. virginia tech apparently turned
him down said he was too small or not good enough. went to davidson college lit it up and we know what he's become it is a little better sweet. can you imagine. >> it is that old story of the high school coach that cut michael jordan from the freshman team regrets. >> woops >> so great to say seth curry a hokie. now i'm sad. digging into what could have been a few rough days for techs. the sign of a healthy market or more losses to come? we'll be right back.
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. the fed taking center stage and jay powell taking center stage. biden versus beijing the white house puts pressure on china with more companies put on a black list, we are live in beijing. the morning rbi. you can say investors have really developed an appetite for lately december 15. this is "worldwide exchange.
>> welcome back. good wednesday morning about 5:30 in the united states. get on that peloton or machine and ride let's get right to the stocks and stock market futures we are not seeing a big move in stock futures and why would we >> we get the interest rate call that's what everybody is waiting on with the holding pattern as well those numbers are up a tick. nasdaq numbers are down. even with everybody expecting one or some rate hikes next year government bonds posting a feg tiff return. 10-year yields well below inflation at 1.34% calling out 2 pm eastern time
with those funds down 13%. the reason, low rates and cheap money make more investors feel more comfortable with higher valuations calling on valuation. a dozen other software stocks citing valuations and whether these companies can grow cash fast enough to keep up with expectations let's talk about that with richard cramer senior analysts and founder. good to have you back on good. do higher rates, assuming we get them things could change but assuming we get them, does that crush
tech next year >> i wouldn't say so if you look at big tech, there is about $300 billion of cash on their balance sheet. being able to raise capital or put capital to work. that valuation that goes into justifying stocks a lot of those are owned because of what people believe are winners. separating the wheat from the chafe in some of those high multiple names. >> is it really all about looking through its companies and a lot ofcash on the balanc
sheet. should we put them in the same basket of a microsoft and an apple? >> there was a huge discussion of apple early in the week, which was completely irrelevant. there is a huge buyer in the market every year of apple they generate so much cash and clearly cancel that work and rma. continuing to recycle cash, it puts a floor under the stock or gives support to the fact that institutional investors are some what under wait apple. they are only and one wonders how that can keep going on
saying the valuation doesn't matter >> i get this bill and apple 1 eye cloud product is like $36 a month. apple has turned into a utility for me have a great day appreciate it. google warning employees could lose pay or be fired if they fail to comply with the vaccine policy they have until december 3 to declare vaccine status and up upload proof employees that do not kplien by
the january 19 deadline will be placed on paid leave and after that put on unpaid leave for up to six months and then terminated basically, you are being fired temporarily. several airline ceos set to go before lawmakers testifying about taxpayer money that testimony seen in advance the meeting to discussion tensions in europe and aggressive u.s. and nato rhetoric beijing is facing pressure from the westover human rights and
moscow discussing buildup of over 100,000 troops at the border of ukraine sending natural gas prices soaring once again. staying with china and a developing story >> coming after the house vote calling out china over the use of forced uighur labor >> citing the sources will put eight companies on the chinese military complex company's black list on thursday for the alleged involvement of surveillance of
muslim minorities known as uighurs. these companies known as facial recognition to cloud computing, drones and u.s. investors are barred from taking financial stake in any of them. saying the commerce department would add another two dozen selling to the chip giant. those reports and tech stocks what is really interesting is that investors are very concerned about the influence
the u.s. has on a lot of these companies they are thinking of listing or have listed on a separate note i know you can handle anything. what are you hearing about omicron and new strains. there is a real chance the ports could shut down again, is there not? >> the first ofrm case was detected in a port immediately after that, beijing authorities had clamped down on that case and the port warning
travelers not to go to port cities especially during this big travel period coming up ahead of the lunar new year. we had another case in the manufacturing hub. there are already several manufacturers in the country who have shut down, suspended production a lot of that is because of delta strain outbreaks but omicron is on everyone's mind >> we'll say covid whether delta or onmicron coming up, expanding internet access across america new details of how to link up all americans. some other headlines happening
right now. jp morgan becoming the latest to ramp up restrictions on unvaccinated employees telling those employees in new york city to work remotely the december deadline to require vaccines neem an marcus looking at splitting itself into three different companies. separating the website from brick and mortar and spinning off berdorf goodman. >> if you own crypto. gains of billions to trillions it is not real the issue has been solved. the explanation on what
more on the plan and her exclusive conversation with the commerce secretary >> good morning. commerce secretary is turning to the tech industry for help including to develop millions in funding for broadband. participating in a virtual round table to talk about how increasing access to benefit their bottom line and economy more broadly cautioned the process takes time >> people will start to see this quickly but it will take years in order to get it all out the door effectively saying it not
only helps big players but businesses run by women. >> women are still not back in the workforce the way we were prepandemic. one way for women to make money in a flexible way and still be able to be there for their families is selling on etsy. being a host on air b&b but you cannot do that without broad bant broadband. the majority of hosts and sellers are women so they are seeing this as a way to be more inclusive. >> commerce will be selling billions in taxpayer money do we know exactly how much and whether that would be enough to accomplish what they want to do?
>> the infrastructure package included $65 billion for broadband funding. another $40 billion or so that states could use from that american rescue plan that passed at the beginning of the year all told, there is roughly $100 billion to ramp up that effort that should be enough money if you assume there are about 14 million people that don't have access to high-speed internet. a number question whether that number could be too low. around $42 million or higher than that. with those numbers, it will cost more to get them connected everyone is waiting for better data of who has access and who doesn't to determine whether all of this money they are pumping in is really enough to make a
radar trend. canned meat, canned beans and cans of beer are in demand or at least their stocks are one of the best performing stocks this month is tootsie roll up 21%. also up is hormel up 15% making it the best ticking stock. and boston beer sam adams are up 15% in december. not just stuff you eat or drink at home. california beer and burger joint pizza and beer and smoked meats.
you do wonder if gyms and exercise stocks are going to have to be the next play after this one random but interesting let's stick with the food theme. out with their 2022 projections. a dash of the economy sprinkled in bringing in the chief investment officer now. welcome, we tried to tie them together do you think these cyclical-type companies. that they could be the winners in 2022? >> we love value think about the recovery we are in right now this one is more growth and
inflation. and we think valuations are very cheap. we love energy and materials and industrial the reflags trade is still on despite fed. also, you think about the three worse performing sectors our energy materials despite those from next year are really moving higher. energy is one of our favorite sectors. we do see a nice trend upward a good recipe for a good perspective they've gotten
smarter. what about the federal reserve do they crush the rally? do they crush banks or help banks? >> we'll see the most hawkish. powell came out a few weeks ago and said, listen, we made a mistake about transitory we increased on an ongoing basis. this tool is screaming we need a more hawkish fed in the data point, able to spread, this is a record live. three things number one, everyone expects the fed to double and put an end to the tapering on the end. second of all, fed raises inflation estimates.
more jobs suggest a rate hike? 2022 the fed said yes today, we'll see many more across and save fed rate hikes to next year the consensus is two we are really saying three inflation is high right now. it should mod rate to the extent >> we appreciate you coming on with the outlook watching the fed and those stocks if you are thinking of dots like those delicious family the dot pots is where the fed members post expectations of where interest rates might be a couple of year or quarters out kind of like a fed light brite