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tv   The Exchange  CNBC  December 22, 2021 1:00pm-2:00pm EST

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devices. one name you might look towards, edwards life sciences. >> birthday boy, last word >> yeah, reopen is the story of the day i think. mgm. they continue to buy calls they were buying them a week ago when it was 40 they're buying them now with stock at 44 or 45. >> that will do it for "halftime. "the exchange" begins right now ♪ thanks, frank. hi, everybody. i'm jon fortt in for kelly evans. here is what is ahead on "the exchange." markets are higher once a again, but after a series of big moves today's action is kind of calm does that mean the dust has settled and it is safe to get back in? we will get some names that could be attractive following the big sell-off citigroup getting more bullish on apple, but we'll hear from an apple watcher who says the supply chain could cost the company billions more than some thought. analysts getting busy before the holidays we are looking at the biggest calls of the day and asking our
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panel if these stocks are a buy. we begin with kristina partsinevelos. >> as you pointed out, markets are higher today and we have actually reversed the losses from monday's sell-off volatility is the name of the game usually december tends to be quieter because traders are on vacation, less big news, but december has been the most volatile stocks for 2021 starting with food, staples, biotech, media, semiconductors you can see it is trending lower, but i want to focus on semiconductors for a second because micron is down today that's after the best day in more than a year just yesterday after the company presented a surprisingly optimistic outlook for the memory chip market nvidia trading pretty much flat to the upside. amd and micron, two of rosenblatt's top semi picks for
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2022, those analysts over there calling the chip sector the mother of all cycles and the biggest semiconductor cycle of all time based on factors such as the growth of artificial intelligence let's move on and talk about artificial intelligence. we talk about tesla, revving higher by about 6% today, this after elon musk said in an interview he had sold enough stock to reach his goal of selling 10% of his shares. over the past few weeks of those share sales musk has actually increased his holdings in tesla due to the exercising of his options. lastly, alibaba. down about 4% right now after atlantic equities downgraded the chinese ecommerce company and they're worried about the performance of two of alibaba's shopping platforms this comes after a bounce yesterday after the company announced a turn around plan i was going through it they want to target vips as well as older customers who, of course, can spend more jon, back to you >> they've had more time to accumulate cash for sure
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thanks, kristina it has been a volatile couple of weeks on wall street my guests say they expect the trend to continue in the next year but the pullbacks present a good opportunity to hunt for value. joining me now, hugh johnson, chairman and chief economist at hugh johnson's advisor and david katz, chief investment officers at matrix asset advisors good to see both of you. hugh, what did we learn from the pull back and how things moved around and how should we define value in 2022? >> well, i think you take a look at the volatility, and volatility, which was just mentioned, really equals uncorre uncertainty, jon i think there's a lot of uncertainty as we look at 2022 you have to ask the question, first of all, how is the economy going to do? we know it will be in the process of slowing, and we know we're not going to get some of the fiscal kind of stimulus we've gotten in the past it looks like the biden agenda might be -- i don't want to say dead on arrival, but it is certainly a lot of uncertainty
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there. the biggest uncertainty, of course, is the federal reserve if the federal reserve raises interest rates too much in 2022, that also could be a problem, a significant headwind so i'm looking for, quite frankly, a yes, a positive environment, but it is a low return environment so i think you have to be playing it a little bit on the safe side. we're not going the see the kinds of returns that we saw in 2021, or, for that matter, significant average annual returns of over 18% since 2009 i think that's a thing of the past 2022 is going to be a more difficult period >> now, that makes total sense at the same time i've had people telling me that for years now, right. likehow long can this continue david, you like some stocks like comcast, which i should mention is the parent of this network, ee bay, fedex, u.s. bank corps, schlumberger these aren't necessarily the growth stock names that have been catching the meme crowd by storm. why is now the time to pivot
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into those types of names? >> so we agree with huge's overall thinking that it is going to be a year of slower returns. we think the market regresses to the mean 9%, 10% returns we think there's lots of places in the stock market right now that are pretty richly valued, companies at 40, 50, 100 times earnings those we are avoiding. the companies you highlighted, that you just mentioned, they're all good businesses, they grow their earnings over time yet selling at 14 or 15 times earnings we think they will be the place. we think the world slows down. it is going to come back to value, the higher dividend stocks we are wary about the high-flying growth stocks. we think in the choppy environment of being with more secure, better businesses at lower valuations is going to make enormous sense. it is not going to be nearly as exciting but it is going to be the way to be most profitable next year. each of the companies we highlighted we think have 30% to 50% upside in the next 18 months >> hugh, i noticed that you like the dividends over at abbott
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labs and pfizer. those are also a couple of names associated, of course, with this pandemic i think with tesla, in particular, which has gotten a lot of attention over the past few weeks with omicron, why are those not too volatile to bet on >> well, i think they're a little bit volatile, but i go along with david david is talking about value, number one he also talked about dividends you know, you have attractive dividends for both of these names, and dividends which, quite frankly, make the dividend yield of these stocks compare well with the yield that you have on a long-term, a ten-year u.s. treasury. that's the kind of thing you want to buy. i think the most important thing that i could say is i watch pretty carefully the relative performance not only of these stocks, which is positive, but the relative performance of the health care sector it has just turned positive, and i think it has turned positive largely because as investors start to pull in a little bit on risk, and it has turned positive
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largely because there's so much, as i mentioned at the start, uncertainty with regard to what's going to happen to the economy and, importantly, earnings in 2022 there's a lot of risk out there in 2022, not the least of which, of course, as i mentioned, federal reserve policy and fiscal policy, which will be important drivers. >> well, there's a lot that we don't know, david, but something that we are pretty sure we are going to get is midterms in '22. for example, of the things that we know within some margin that we're going to get, what do you expect to affect the market? david, how does that impact your strategy >> we think the two biggest drivers are going to continue to be covid hopefully, it is getting more under control, hopefully with the antivirals approved today and with the vaccines, maybe with the booster or the next booster we start to put covid a little bit behind us that's a concern and that can change the market at any particular point in time the fed policy is going to be important. we think a lot of the stock market gains over the last 21
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months, which have been robust, are driven by this enormous amount of liquidity. as the fed takes some of the liquidity away, we think it will be a tougher environment we think from a political perspective, interesting to focus on the elections, but we don't think it is going to be after overall driver of the stock market rather, it is going to be the economy, corporate earnings and the fed. >> all right it is nice when politics stays out of it. hugh, david, thank you >> great to be here. thanks >> pleasure. now, as omicron continues to surge, drugs to help treat covid patients are becoming more critical for the very latest on that front let's check in with our meg tirrell. meg. >> hey, jon. of course there's big news on that front just in the last hour the fda clearing the first at-home covid pill from pfizer called paxlavid, the first of its kind, an antiviral designed to be taken early after diagnosis within five days,
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clearing it for high-risk adults and kids 12 or older these are those at high-risk of dying from covid in trial it reduced the risk by 89%, so tremendously exciting. pfizer saying today that it's increased its supply iks peculiarations for next year to 120 million treatment courses by the end of 2022 but it will be in limited supply over the next few weeks, only 180,000 treatment courses by the end of this year. pfizer says we are looking at tens of thousands of packs being shipped to the u.s. before the end of 2021, getting up to hundreds of thousands by the start of 2022. of course, merck also has an antiviral drug at the fda, and we're expecting potentially to hear news on that really at any time you can see pfizer's stock moving higher. we will stay tuned for that. these drugs are really important at this moment now with omicron because they're expected to hold up their efficacy against that we have seen it change with the antibody drugs from regeneron
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and eli lilly in particular, they lose efficacy against this virulent there's another from glaxosmithkline that holds up, but we spoke with them about how they're trying to fix it here is what he said >> we seem to be the only antibody left with activity against omicron. we are doing everything we can to accelerate the supply we came here to deal with infectious diseases, to save patients, and we're in the middle of a pandemic we are doing everything we can from early morning to late at night to get more supply to the people who need it >> so as they are working on this and we're seeing the companies, pfizer and potentially merck, getting the pills out there we are seeing cases start to rise steeply off an already big wave from delta, now with omicron contributing, approaching 150,000 cases a day. jon, there are reports and even more today that it will be less severe and fewer people overall
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will be sent to hospitals, but they're worried about the hospitals being overwhelmed by the sheer transmissibility of this >> of course that's what i wanted to ask you about. in the first wave of covid there was a lot of talk about flattening the curve particularly when it comes to hospitalizations, to make sure they're not overwhelmed with covid patients for the covid patient's sakes but for the sake of other patients who need services for other reasons are we at the point yet where we have a sense whether things like this pfizer pill, things like the rate of vaccinations have kept hospitals in this country away from that point, danger point of being overtaxed >> you know, what we hear from folks in the health care space is they're already overtaxed and the quality of care in some areas has already declined as we've seen more and more, you know, cases and hospitalizations build up in some regions, again, you know, sort of elective surgeries or rescheduled
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surgeries have had to be postponed so hospitals have the capacity to deal with covid patients it is an ongoing problem one big fear is omicron is that it is so infectious, a lot of health care workers will get it and even if they don't have severe cases they're out of work for a while. that's a big problem, too. >> indeed, it is thank you, meg, for the update coming up, a credit rating upgrade and a price target hike for apple today, but it is not all good news for the tech giant. some bearish news from an apple watcher next plus, rising rates, tight supply and sky-high home prices. we will get a check on home prices caterpillar is the biggest gainer nike and honeywell are the biggest losers "the exchange" is back after this
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oh. -what the. oh my goodness! i don't suppose you can sing, can you? ♪ the snow's comin' down ♪ -mommy? ♪ i'm watching it fall ♪ watch the full story at ♪ welcome back shares of apple up about 1% in today's session. moody's upgrading the tech giant's credit rating to aaa with a stable outlook thanks to its substantial operating scale and strong customer loyalty. this as citi bumps the price target for the stock to 200 bucks, thanks to strong demand and new product launches in 2022 but there are headwinds. it is said that supply chain could cost them $2 billion for the summer quarter
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gene joins me now with what he sees i hear what you are saying but i'm looking on apple's site at the apple 13 pro and it says i could get one delivered tomorrow or i could order and pick it up in store on friday i mean that sounds a lot better than it was a few weeks ago. what is going on >> well, jon, the conversation from my perspective starts, i just want to anchor that i think demand for their products is great. then we talk about the supply side it has improved. you mentioned one example. based on our math it is down to one day. a month ago we had that measured at nine days for the average iphone so the average iphone 13, we look at ten products, apple products over six countries on a monthly basis. that's our methodology i first want to square your data point with my data point, which is we're on the same page as iphone has improved a lot. it is a big part of the december
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quarter revenue. it is 60% of revenue but the issue, the challenge here, the $2 billion question in my case is you have to look at the bread th of the product line that's an improvement. the watch has improved on the flip side you have the ipad, the new ipads with a month out. then separately the new i book pro i measure at 25 days out a month ago it was at 18 days out. i think when you put it together you come up with a picture that if you look at the bulk of the buying for apple in the december quarter, it really comes before december 15th. it is that november 15th to december 15 it so a little bit of the iphone improvement, a little too little, too late it doesn't change the fact that i think the vast majority of this lost sales is going to push to the march quarter >> interesting i wonder based on the loyalty that apple has long commanded
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though if people are visiting stores, which are largely open unlike last year, for example, might they shift their buying intent from something that's out of stock like that macbook pro to something like a watch or a phone which they might not have expected to see, but, oh my goodness, here they are in stock. might it play to apple's advantage here >> it will they will pick up, especially during the holiday buying period, you will see people that will forego the newest product just to get a product. the ipad is a perfect example of that there's better availability of the older ipads. i think that dynamic does put it into play, but i want to bring it all together when we think about the lead times and i have followed them for a long time. i think there are insights you can gain if you look at the average lead time for new apple products as it stands today, it is 16 days if you look at -- that's an improvement from 20 days a month ago. so it has improved but typically at this point after essentially the holiday period, the buying period is done at this point we would be seeing
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lead times for new apple products in the two to four-day range. so we are still an order of magnitude greater, apple guided it would be a higher number than two to four days with the $8 billion headwind i think it will come into a bigger headwind. investors should be aware of it but ultimately should be worried about it >> another reason i wonder what the overall impact is going to be with the rise of omicron, we have seen certain schools either going back to remote or looking for hybrid adjustments or at least parents are afraid that might happen in '22. so might you see some q4 buying of computers in anticipation of needing them at home that might not have happened otherwise because we see some of these variant effects? what do you think? >> think you are seeing it in the lead times i mentioned that the lead times for macbook pro -- now, this is an expensive, outside of the education piece, but it is a product that's used for work at
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home that's going from 18 to 25 days. we have seen it with the new ipads. i think we are in the early stages of this i think this is what, you know, just fully anchoring back to my view, i think it is a $250 stock in the next couple of years, in part because of this accelerating digital transformation you are describing here, this work/learn hybrid type of a model apple is the picks and shovels for this ironically, this was the big negative against apple, was they had hardware and somehow that business shifted the same multiple i think investors over the next couple of years are going to further embrace the idea that hardware is a significant competitive advantage and should reward apple's multiple appropriately for that >> well, hardware, chips, software, services, apple has a little bit of everything gene munster, thank you. >> thank you, john it has been a wild week for this stock, lower again today. down nearly 8% for the week. we will reveal it next plus, meet the company and the technology that helps
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♪ welcome back to "the exchange". the dow up 240 points at the high markets right now fractionally higher across the board by more than half a percent. when you dig deeper into the stocks that are moving, you can see some trends today. travel and leisure stocks, the cruise lines, live nation, expedia, those are among the biggest gainers. what is falling? the vaccine makers and stay-at-home names moderna, biontech, peloton and zoom, all lower. we are continuing to watch wild
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moves in fresh pet, the pet food maker. last week the stock plummeted when it warned about supply chain issues but then it had a big rebound into yesterday, giving up a lot of that today. a bit of a hair ball now to kristina partsinevelos for a cnbc news update kristina >> thank you, jon. here is what is going on at this hour. the biden administration is extending moratorium on student loan payments that started during the pandemic. millions of americans will now be able to put off student debt payments until next may. the moratorium was set to expire at the end of january. the nba postponing two more games due to player shortages caused by covid. neither the brooklyn nets nor the toronto raptors are able to field the minimum eight-man line-up in games set for today and tomorrow the nba has now delayed nine games this season due to virus-related reasons. a special team of police officers is still patrolling at miami international airport. this following monday's brawl involving two travelers and a
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police officer the fight happened after one of the travelers took over an airport cart and refused to move until he received information about his delayed flight on the news dealing with unruly passengers and how flight attendants are being trained to de-escalate heated encounters. that's tonight at 7:00 p.m. eastern time jon, back to you >> got to be careful out there thanks up next, a bullish edition of "rapid fire." from industrials to restaurants to discretionary, where the street is seeing opportunities and whether you should buy this iwi brit its lle ghback ♪
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♪ let's catch up on a few stories that should be on your radar. it is time for "rapid fire." on deck today, some bold calls on wall street here to help break it down our own bob pisani along with mary ann montagne, and charles boinscoi caterpillar, the firm says cat will be the biggest beneficiary of looser monetary policy in
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china, especially as industrial activity picks up. bernstein's 240 a share price target implies 23% upside from here and the broader industrial sector lagging the s&p 500 by about 10% this year. charles, is this one thing that we can trust china on as investors or what? >> hate to get off to a negative start, but no, absolutely not. in fact, one of the things we are really calling out is the bubble in chinese residential real estate, particularly construction of condominiums which is going to come to a screeching halt. ever grand and their pet tors are just the beginning there will be as much as $100 billion in losses, so we expect china's construction activity to drop significantly and unfortunately cat is going to feel it. >> mary ann, china is big, as we know do you agree and will it have
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fall-out for more in the industrial sector? >> i think there's been a lot of speculation about the chinese demand falling off since the evergrande but orders are up only 10%, which can only benefit from gdp growth coming here, and then with moderated costs and share buy backs the company should be able to reach the high end of the eps growth estimates for about 30% since the shares are trading around their ten-year average on an ev to ebitda basis. we would expect to see some expansion in that valuation also >> bob pisani, not going to ask you to be a tie breaker, but do you have insight into whether investors are pricing in one way or the other problems in china when it comes to construction and real estate or not >> sure. absolutely they are. look what happened to caterpillar. it just dropped in the middle of the year as concerns about china
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came to the fore but china is probably only 20% of their revenues. i would focus a little bit more on, for example, the north america construction cycle, which will be pretty strong still i think. it seems to me it is going to be very strong. the other important thing is focusing on the supply chain a lot depends on how you feel about inflation. for example, probably 15% of caterpillar's costs are steel costs. they went way up this year the hope is that the steel costs are going to come way down that would cost their cost of goods sold, of course, rather dramatically a lot of this depends on where do you come down on the cycle. we seem to be in a mid cycle, though it is pretty confusing. mid cycle, industrial names generally do pretty well in mid cycles we seem to be in an upswing still in construction in north america. that would benefit i guess the overall question is where are you on the supply chain issues, and hopefully they will mitigate a little bit in 2022 >> investors will place their bets next up, darden restaurants,
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higher today on an upgrade to buy from hold. shares are still lower by 2% over the past week after the olive garden parent company announced in its earnings release long-time ceo gene lee will step down next year but in the same report darden beat on the top end bottom lines and boasted better than expected comps. it says it is confident in its second s successor who is currently darden's cfo, that he can keep the company on a similar growth path what do you think, mariann, lots of bread sticks in 2022? >> no bread sticks for me, but gene lee has a great path at darden as it has been for decades, we believe darden has a very extensive bench of talent, and gene's absence starting next may -- no, sir not like it is tomorrow or anything -- that does not undermine our positive
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outlook for the company. look today's consumer conference report from the confidence board. it shows how rising employment is increasing people's appetite for eating away from home in the coming year. that's my belief we believe darden will continue to grow, on take market share. the stock should increase in line with earnings per share growth which looks to be in the 22% area for calendar '22. >> bob, a lot of darden, there's a lot of casrbs in there how is that trending with investors treating restaurant names like that? >> it is trending really badly with me. i can tell you, my carb intake has gone up so bad question to ask me look, how would you like to project darden's revenues for the next three to six months it depends where you are on omicron. if you believe that people are
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going to power through this and still go out, then this company is very well positioned. darden has been growing their earnings along with their revenues for years they trade at a very reasonable multiple it is about 17 times 2022 numbers. that's excellent, right in the middle where it has been for years. they're not overpriced they're very fairly valued, some would argue as they are here that it is actually undervalued. under valuation basis i don't have any problems at all the problem i have is what side of the debate of omicron are you on if you are pessimistic you will think there will be a lot of cancellations in the next few months that's the problem i have, not on valuation >> charles, then you have to look closely at their omni channel strategy and see whether they can thrive despite that do you bet on americans eating the way we have always tended to >> look, this is a crowded trade. if you look at wall street, they have one of the most lopsided buy ratings of any restaurant. if you have, say, a buy is a one, a hold is a two and a sell
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is a three, this has an average rating of 1.3, which means overwhelming buy side from recommendations from the street. it is trading at 14 times ev to ebitda i unfortunately disagree i think it is an ebxpensive stok everybody loves and they're going to suffer from higher wages. labor costs are a big part of their cost structure and it will be a tough year. i think it is best to hold >> sounding like you are saying investors would get endless indigestion. up next, upgrading williams-sonoma from buy to hold the firm says the pandemic remains a stailwind for hour wares into the year. they cite 70% e-commerce penetration as reasons to be bullish. they said the stock had an 11%
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pull back, creating an attractive entry point for investors. sees more than 20% upside from these levels bob, i guess in a way this is the flip side of the darden trade, right >> right >> you don't go to olive garden. >> exactly >> you stay home and make stuff with your expensive cook ware. is that a better bet >> that's exactly right, jon somebody is wrong here this is the opposite of the darden story this is the ultimate work-from-home story that's out there. i think -- again, this is where do you come down on the omicron story. if you believe people are going to stay at home more, cancel reservations and not going to work as much, takes great company. it is also a great company on a valuation basis. this is just one of the great winners on wall street i will tell you what i love about this they're in one of the top, maybe 15 buy back monsters out there this company has aggressively bought back stock and, unlike many companies, actually reduced the share count. their share count is down about 25% in the last decade or so
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that's significant that means everything else equal, earnings are 25% better than they were ten years ago because of that. and it is pretty reasonable. it is about 12 or 13 times 2022 earnings estimates that's not bad at all. so, again, on a valuation, no complaints at all. i just want to know if the work-from-home story still has resonance in 2022. >> charles, what is interesting to me about this is the omni channel play, right, that they've done pretty well there, and then also the idea that it is a tool that's also sculpture. it is like you leave these things out in the kitchen. so maybe the home improvement trend, not just the eat-at-home trend, almost maybe like an apple of kitchen wares, is that fair >> i think it is absolutely fair you don't have to have a stay-at-home structure here. people are buying new houses they tend to stock those new houses with williams-sonoma.
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it is trading -- ev to ebitda as opposed to our previous name at 14 so this is a great company that's gotten really rocked in the last month for in my opinion no good reason a great company trading at a very attractive valuation. >> all right and speaking of money, finally, oppenheimer naming coinbase a top pick for 2022 and the exchange is poised to benefit from expanding digital asset adoption as well as the rise of deflat, that's decentralized finance. it has been a roller coaster for shares since coin went public in april. they're higher today, but down nearly 20% in december, on pace for the worst month since may. mariann, is 2022 going to look better for crypto and coinbase >> you know, not if you look at the charts for coin or bitcoin, and there's over 12,000 cryptocurrencies out thereonnec
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are everybody seems to be trying to make it mean what they want it to mean to sell their thesis. we will see where it end in 2022 bob, mariann, thank you. >> thank you for having me for more on call on crypto and exchanges, oppenheimer analyst is going to join "power nt,h" next hour upex 2022 could be a record
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for munis according to the street, but with biden's spending bill in limbo, could that run already be in jeopardy? we are back in two ♪ ♪ ♪ 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. unleash your potential. uipath. reboot work.
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♪ welcome back got a quick news alert on amazon its cloud unit drawing scrutiny from ftc according to bloomberg shares, are at session lows. they're lost that kind of break-even level for the day, down roughly a percent not a huge move, and i would note up until this point a lot of the antitrust scrutiny that amazon has drawn has been in the e-commerce business around third party resellers on its platform and whether it treats them fairly of course, we will continue to track that story moving on, muni bonds got a big boost in 2021, thanks to a generous fiscal policy more than $430 billion was issued through november. with build back better dead in the water for now at least and
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the fed getting more hawkish, how is 2022 shaping up joining me is peter brookvar, chief investment officer at bleakly advisory group and cnbc contributor. peter, what is the state of state finances and how much does it play into how munis look from here. >> in the march biden fiscal spending plan states got $195 billion. so they are flush. then you take the infrastructure bill, which basically is taking federal money to replace what would have been state money in financing a lot of infrastructure projects. so states got a pass there as well then you add in this extraordinary run that we've seen in markets over the past ten years and pensions, public sector pensions are more than 80% funded, which is the highest since 2008 so from a credit standpoint, at least right now, the balance sheets of these states look good >> so what does that mean for the attractiveness of munis?
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because it sound like they're safer than a lot of people would have feared a year and a half or so ago, but at the same time there are other attractive places to put your money for stability. >> well, i think the probability that munis face is the same thing that any fixed income investor faces right now, and that's microscopic yields. you can look at high yield where it is not really high yield because you are only getting about 4% so you are really scrounging for crumbs here when it comes to fixed income, and munis because of the rally, because of the strength of the state balance sheets, as i mentioned, it is spread relative to treasuries is pretty tight so there isn't much upside other than the coupon you are going to clip, and unfortunately that coupon is not very high. >> does the outlook at all depend on what the fed ends up doing about inflation next year? how will the rate hikes that are expected at least impact this situation? >> well, certainly the fed's
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response to the inflation we've seen is going to impact the yield curve. ever since mid-june when powell said that he's finally now going to be talking about tapering, we have seen a pretty short flattening of that curve because people assume that fed tightening will eventually slow growth and therefore you get the flattening the shortened of the curve, because i think the fed will at least attempt to raise interest rates, could be more vulnerable to the long end, which actually could rally because of what the fed is doing, notwithstanding the inflation picture, which i think will be more persistent and sustainable than those in the transitory camp believe. >> all right well, it is nice that they at least feel safe. like i guess they're supposed to peter boockvar, thank you. >> thanks, jon still ahead, homebuilder stocks moving higher today as mortgage rates hit a four-week low and re-fi applications pop how low can states stay as the
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fede fed ramps up we will discuss on "the exchange." we will be right back. muni money is sponsored by -
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welcome back existing home sales climbing in november from the previous monh, but supply remains tight then there's interest rates. diana olick joins me for a check on the health of the housing market diana. >> well, jon, higher interest rates are starting to take thei bigger gain. these are counted by closings. so contracts signed in september and october. and take look at what happened to mortgage rates. they rose pretty sharply, this on top of very low supply, which pushed the median price of a home sold in november to $353,900, up 13.9% from november of 2020. that annual price gain was slightly larger than october's increase the gains have been coming down a bit from close to 20 trz earlier this year. the action though is still happening on the higher end of the market homes priced between $750,000 and $1 million rose 37% year over year and those priced above
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$1 million up 50% year over year homes priced between $100,000 and $250,000, they fell 19%. that's because supply is so low on the low end first-time buyers dropped to just 26% of the market from 32% a year ago historically, they should be about 40%. looks like sales may be slowing further. mortgage applications to buy a home fell last week compared with the previous week, and they were down 9% from a year ago mortgage rates are expected to move even higher next year as the fetds stops pouring money into mortgage health care backed bonds. the realtors today say they expect the see fewer home sales as a result next year but not much easing on home prices due to the still very low supply. >> does that tell us anything or suggest anything about price tensetivity fedding into 2022? we were talking yesterday about the huge development in phoenix and sort of what the outlook for things like that, projects like
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that are >> you expect that price would ease up a little bit as rates go up because that's why prices rose so much in the past two years. rates were at record lows. but you have a supply issue, low supply, and strong demand. that's going to keep a floor under prices they may ease up a bit due to the affordability problem and as interest rates rise there is going ab a wall of affordable. i don't expect them to raise up all that much. >> and materials costs not an easy business. from mondelez, to cvs, to alphabet, companies are rolling back their return to office plans yet again. the ceo of one comnypa looking to help keep offices safe joins me next. re an owner with access to financial advice, tools and a personalized plan that helps you build a future for those you love. vanguard. become an owner.
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welcome back to "the exchange." with omicron cases surging, amazon, meta, twitter, and others will not be sending teams
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in person to the consumer electronics show, ces in vegas in a couple of weeks and companies are postponing return to offices. one company is working to help keep employees as safe as possible joining me now, the founder and ceo of envoy, a hybrid workplace software company larry, i can only imagine -- i don't know how long exactly you have been doing this, but a couple of years ago, this sort of hot desking culture was sort of like a hippie workplace thing that was edgy. but now everybody needs it how much have you had to shift your strategy to accommodate that >> hey, john also, thanks for having me it's incredible just what is happening in the world right now. here's the thing, right? people are always going to be with other people. they are got to want to be with other people the community of any kind of workplace is big hey, you have to keep on adapting in this environment we have been building products
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literally non-stop ever since the beginning of the pandemic, testing, investigating, making sure people to make sure people are coming together on specific days helping companies keep track of anything logistically and make the work experience great. >> i understand one of your processes has to be platform integrations, force now, or microsoft -- large companies have footprints on these platforms and want access to these services how are you doing with that, particularly with the shortage of labor out there >> everyone is asking what is the best way for my company to make this seamless for everyone? the best way is by integrating with lots of different products. our products integrate with the ones you listed and more door access even to how is space
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utilized when you bring it all together you can say these people come on these days, these people come on other days this is the safety risk. all these people on this floor are vaccinated you can much more confident there. this is the kind of thing that these companies need to know you can't get the data and be confident about things unless people are willingly wanting to use the things to provide that data, like when are they coming in, which days and those checks. it is really important, experience is key and you have got to build products around it. >> from an operational leadership perspective, how are you approaching growth i imagine venture capital funding is pretty available to you at this point. but also, the overall macro outlook a bit unclear. how much are you leaning into growth and spending? how much are you maybe holding back >> yeah, i mean, at the beginning of the pandemic at first we were lining oh, no this
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is our core business, we literally sell to workplaces and they are all required by law to close. but it turns out people, employees were in these situations a home where they had bad internet, they had construction going on, they had weird child situations going on and they couldn't be there all the time they needed a place to go and their offices needed the open in small amounts at the beginning what happened is these people now had an environment where they could be safe, they needed to be safe, and these companies need to be conscious of the fact that people need to be safe. as people kept on coming back, this is how these products got built. i think people are just really finding that, hey, it doesn't have to be that different and they can start rebuilding again. >> how is your -- >> for us, it has been good. it has been good it's nice as a company to be able to appeal to the day-to-day issues people have that's really important. not every company can immediately start acting on thing. we have been doing it ever since the againing that's what keeps everyone here
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excited, what keeps thee excited and keeps our customers continuing to come to us, our usage and numbers and everything are higher than they have ever been. >> yeah. >> growth in the last quarter has been growing faster than ever before. >> plus, we never know when we are going to be in the office versus not which i guess plays exactly to your strategy. >> that's exactly it the hybrid. >> thank you for joining us. >> yeah. >> that is going to do it for "the exchange. "power lunch" starts right now welcome to plumpl,-- -- "por lunch. i'm rahel solomon. confidence wuss, consumers are feeling good about their financial prospects despite rising omicron cases and higher prices. oppenheimer says a crypto-related stock could be a big winner. a work wlunch ceo 6


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