tv Squawk on the Street CNBC January 4, 2022 9:00am-11:00am EST
>> sarah and liz, thank you very much appreciate the time today. >> thanks for having me. >> thank you >> okay. in our final minute right now, let's take a quick check on the markets. it looks like we're going to open up the green. you're looking at the dow up nasdaq looking to open higher as well 28 points higher the s&p 500 up about 15 points mike, it's been a ball thank you. make sure you join us tomorrow, "squawk on the street" begins right now. ♪ good morning welcome to "squawk on the street." i'm carl quintanilla along with david faber and jim cramer ten year, 1.67 oil at 77 as the market looks past the record high covid case loads in the u.s we begin with a series of records.
the dow and s&p look to add to all-time highs apple hits 3 trillion in market cap. >> plus, ford shares, they're rallies yet again, this ahead of the open they're accepting purchase orders for its, f-150 lightning pickup truck again and elizabeth holmes the founder and former ceo of theranos found guilty on four federal charges of fraud yesterday, apple 3 trillion, going to try to get our first close above 4800 today. >> there was so much buying, but there's also a lot of selling. and the selling had to do i think with the ten year. it was the highest multiple stocks they were all for sale it did not matter what industry, they were all down between 6 and 8% rather daunting, except for the areas that were down a lot last year fintech had a giant rally.
>> media names. >> media names and the banks. david, the banks acted like growth stocks. what was going on? >> you saw what was going on we were starting to get a little bit of incline in the yield which is making people believe there's going to be some net interest available for that industry even though, again, other than citi, many of the big banks had strong years last year in the stock market despite what was a lack of net interest market. >> yeah, goldman was one of the top performers goldman sachs, david, sells at six times earning. when you get off the desk with bankers, they say, what will goldman do to inspire the street to give it a multiple that's higher than a steel company. david, any ideas >> i think they're going to just continue to articulate what they believe are their strengths. it's funny, we haven't talked as often about their efforts in marcus that will continue but i think they want people to
understand that in their belief, they have a -- for lack of a better term and they love hearing this, a blackstone hitting inside goldman, right? all of their different efforts and their ability to generate reoccurring fees from so many of their businesses is a real positive that has yet to be fully recognized by the way, important to note, blackstone itself is a larger company than goldman blackstone has $151 billion market value we don't talk act that company as often either even though it is such a powerhouse in so many ways. >> carl, if you're getting out of school, both college or graduate school, goldman is still a place you want to work and the partners make a great deal of money. and yet it has become not the butt of jokes, but who are those guys who are those guys we don't really know who they
are. they have no personality, carl mo morgan stanley -- look, we're going to make money consistently back -- bank of america, make a lot of money j.p. morgan, we're good at banking, retail, everything. citi good at nothing i'm sorry. citi not as strong as it should be and you get to goldman, goldman, i guess, well, they'll do fine it's amazing this used to have the people multiple. >> to be fair, they're still number one they closed out 2021 number one. >> up 50% -- >> ipos, investment banking. but a third of their staff is young people a lot of engineers it's a turn. >> i question marcus how well it's doing. i question what they're doing with the apple credit card david, these are things that they got to much fanfare and i question whether they're value
additive as i would have thought they would be. >> that's interesting. we spend a good amount of t focusing on their efforts in retail but, you know, they don't seem to be as focused on it, at least in terms of articulating it right now. we'll have to wait for the next call, see what salomon has to say. but to carl's point, they had a strong year. very strong. and i don't think anybody is complaining about that 129% increase in the stock price over the last three years you can talk all you want about it being six times and perhaps there being some frustration that that multiple is ridiculous at the same time, the earnings are soaring. they had record quarters one-half a year was like a year for them in terms of earnings
from not that long ago it's interesting to see where young talent chooses to go at this point we come back to goldman oftentimes about return to work. now they're saying the 18th for people and i question whether they were getting people in the office every single day that's something that is not happening for virtually any employer right now but there's not that much that we can say that's particularly negative, if you own the stock >> carl, i think that what people -- young people, smart people want to do, they want to do out west. work for three to five years for a salesforce or meta platforms, go have their own company, make a complete killing and retire at the age of 45 and be really happy. at goldman, you do all those things, you retire at the age of 45 and you're miserable. i like happiness over miserable. >> generational change more than 1 million new infections reported on monday,
according to johns hopkins, as the omicron variant continues to spread that may be due in part from delayed reporting from the holiday weekend. it's a stunning chart. more important, guys, is the death, five-day average is nowhere near what that chart would imply. >> that's being used by the anti-vaxxers about what's the point? it should be the opposite. i would say this, carl, we are looking at a very undercounted number a lot of people -- that doesn't count the binax. that's how people find out i got a binax 40 package -- >> how long ago was that >> my wife got it on some black ops site >> before the rush. >> yeah. and what happens is, we were testing a couple times a day what happened for me was i tested in the morning and i was feeling great and i tested in the evening and i realized that
i had it and then you wait -- the cdc, how great. i was getting two lines, two lines. suddenly the cdc says, so what remember the cdc against almost everybody's wishes, hey, five days, you're fine. even the nfl carson wentz, i think he had to do six days. david, i question the cdc's rigor, what do you think of that >> you've been questioning them for a long time -- >> because they have none. >> when you have this many cases, it's all anecdotal. we talk about it, obviously, how many we know, including the two of you who have had it recently. i know people who are having some vague symptoms and not bothering getting tested because they don't feel bad. but at the same time, they're not necessarily even quarantining i don't know how quickly this is going to move through -- >> no? >> no. but it's moving through quickly. we can all hope the peak is going to be put in soon here in
the region we're in and other areas that are being hard hit and kind of move through very quickly, jim but you pointed out yesterday, there is still some concern that you have, and i saw earlier on "squawk box," head of ports, l.a., will there be constraints yet again on the supply chain and will that be an impact probably going to get even hotter if, in fact, there is some delay in being able to meet demand >> well, look, carl, one of the things that's happened, they're paying people a lot to find people to work because there are so many people who are sick. maybe they're not really sick. maybe they're at home with five day. i had 45 minutes of a cold i never had a cold that lasted for 45 minutes i happened to be visiting a ceo of a major brokerage house and i said, look, i might be sick.
i was with someone. >> don't worry about it, i migh be sick. one of my best friends here at the network came by to see me and i said, are you sick no, but my kids are sick then you're sick we all play the game i got the binax from my wife with that secret site she used believe me, you might have it. >> by the way, as far as the cdc goes, cnn this morning is saying that an update to the isolation guidance is imminent according to a source. >> what a bunch of hacks they're just hacks honest to god. they consulted some doctors about the five day, there wasn't one that said five day was good, and then they issued the five day. who are these guys david, david, is there any accountability for the nih, for the fda, whoever the heck runs that these days and the cdc?
these are rogue agencies, david. they're like the vla-- vladivosk >> i'm sorry i'm not there to respond to your long statement of criticism, but i can do it from afar as well. >> well, i think you have to say, listen, we're not theranos. isn't that their -- go to the cdc headquarters, in season two of walking dead, they got there, which place is better? that cdc or this one >> i still -- before we get to theranos, we need to have a market discussion here, jim. yesterday you mentioned it, apple new highs. and at the same time we're -- the ten year is ripping. >> right. >> and then we're in this period where -- you talked about this yesterday, the fed is conceivably going to start tightening, inflation is going
to be quite high i don't know, is that going to lead to a lot of volatility when it comes to the overall market >> well, i think that if you have earnings and you make things, no if you're one of the pieces of -- one of the garbage stocks that the street unleashed on us, yes. i think those are headed into purgatory. carl, we have these companies that lose fortunes one of them this morning, i just picked this one out of the hat because it's, like -- how much do they make they're losing fortunes. if you're not making money, then you shouldn't be recommended don't be recommended >> i was going to say, the upgrades today are names like ge and coke. >> yeah. >> and hpe >> boeing even david, boeing. >> i saw that. >> david >> yeah. >> what do you think of boeing >> it's great, jim. >> which of the boeing lines is doing well is it the 777? >> no. >> is it the 787, the 737?
is it the military losses there too but, david, it's a top flight company. let's cut it out. >> you got that going for you in your investment club >> top flight. >> we're going to get to all the calls in a bit jim, though, does mention theranos and elizabeth holmes found guilty on 4 of 11 fraud charges. scott cohn has been following the case since the beginning good morning, scott. >> reporter: good morning, carl. it's a long fall from where she was just a few years ago the toast of this valley, now elizabeth holmes is facing some serious prison time, up to 20 years. she may have dazzled some big investors over the years, but seven days of her testimony on the witness stand, not enough to dazzle the jury. holmes showing no emotions as the verdicts were read it was a mixed verdict
holmes guilty of conspiracy and defrauding theranos investors, but not guilty of defrauding the patients who got bad test result and is the jury unable to reach a verdict on three additional fraud counts against theranos investors. >> the guilty verdicts in this case reflect ms. holmes culpability in this large-scale investor fraud and she must now face sentencing for her crimes >> no date set for the sentencing absent from the statement, any message about the broader implications of the verdict. a lot has been said about this case's implications for the so-called fake it until you make it culture in the three years plus since theranos failed, not a whole lot has changed.
>> fascinating we'll talk about this for quite a while as we get more information on sentencing. as for the trial itself, we believe there was a piece of tape shown between elizabeth holmes and cramer a long time ago. take a watch >> how many tests can your device do -- "the wall street journal" says it can only do 15 out of 240 >> we had communicated to "the wall street journal" that we have submitted over 130 presubmissions to fda with tests running on our proprietary devices and have been taking those through the submission process. every test that we offer in our laboratory can run on our proprietary devices. we bring tests up on our devices based on the frequency with which they're run. at any given point in time, we're running the tests that are most commonly ordered. >> not the first time she was on the show you did an in-person. >> right first time i was completely
baffled. she was obviously very impressive it just seemed like, $9 billion, this one was a much tougher -- and i was glad that in the book i actually looked okay the question was, the journal has done a series of articles and they're basically saying that you are a fraud and she did not acquit herself very well and i think the reason that was so important, why that was so important, almost everything she said was not true. and so they kept running that and running that in the courthouse because it was like exhibit "a" of, here, she's making it up >> it's amazing and of course the journal is reporting and the book as well which was just such a great read, it was amazing how many people, though, jim, how many people that we conceivably thought of as having great judgment were swayed by her.
>> yeah. general mattis, george schultz, safeway, walgreens. >> and tim draper. longtime defender, saying it makes me concerned the spirit of entrepreneurship in america is in jeopardy. >> they don't really distinguish themselves from -- >> we'll be paying a lot of attention to the information as we get it on the holmes trial. when we come back, the ford rally rolling on, thanks to news recording the f-150 lightning. take a look at futures here as the s&p still looking for a close above 4800 and futures quk t see cight get it. "sawonhetrt"ontinues in a moment. with a lot of movin. you want everything to be on autopilot. and to be prepared if anything changes. with ibm, you can do both. your business can bring data together across your clouds, from suppliers to shippers, to the factory floor. so whatever comes your way, the wheels keep moving.
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with no line-activation fees or term contract required. see if you can save by switching today. comcast business. powering possibilities. ford is up in the premarket after announcing plans to double production of the f-150 lightning to 150,000 units a year they will begin accepting purchase orders this week for the electric pickup truck. they shut down its reservation system due to an overwhelming response if you have a reservation, you can convert it into an order beginning thursday. >> when we had -- in a stroke of luck, we had jim farley on for our first investment club and he gave a hint this could happen. the gaining factor here -- and he does make money on the trucks, is enough batteries. if they had 200,000 batteries and enough inverters, they could make 200,000 trucks. let's not think this is the end of what they can do.
it's the beginning there's a big battery shortage in the country when you look at what ford is doing, they've solved the semiconductor crisis for at least the high end they have enough for these they're putting it all forward this where are wegoing to get the batteries? we just don't make enough in this country >> all right is there an answer or is there really going to be a potential problem. by the way, it's not just ford we're seeing increased orders for politics vehicles around the world. and so there's only so much supply >> yeah, battery shortage is real i think that's going to be the gaining factor, i think, and then we're going to hear, carl, that there just aren't any one of the reasons that tesla just seems to continue to roll, they've got them you never hear of a chip shortage, you never hear of a battery shortage when it comes to elon. rather remarkable. he just has figured out a lot of the bottlenecks that a lot of the other people haven't been able to figure out. >> one of the surprises for the
year involves rare earths. not the assembly of the production, but the raw materials. >> they did an important with mary barra at gm that's a good spac i was at one point critical, but it just took off if they want to be all domestic, right now they've been involved with china that is the largest -- they've got this incredible patch. look for gm to be able to be better than adam jonas' downgrade today. he stuck by his $12 target on ford. >> top auto pick of the year is ferrari. you got to love the guy. you have to. i don't know he's like belichick, right good defense, i guess. i don't know >> we'll get cramer's mad dash.
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constellation and corona and the fourth one just joined today, we have wells saying it's going to be great. this stock has been nothing but net. it's straight up and yet people say it's not done i don't know i think that you've got beer sales doing very, very well. these guys have done remarkable. and the one to watch is pacifico they have a lot of things going for them i know people were concerned that hard seltzer, tomo many entries. but the beer business is very strong right now >> target 66 they're talking about better emerging market vaccination rates, better on premise, jim. >> it's interesting because coca-cola, a lot of it is big offices and restaurants.
peps pepsi cohas been going up because it's more at home. one of the things i like about constellation, they have many more -- they have victoria they haven't even brought that in yet their beers may not be premium in mexico, but, boy, are they premium in the u.s >> there's the opening bell and the exchange as we watch gig capital celebrating their recent listing. and a national non-profit whose mission is to drive equitable access in youth sports baird upgrading underarmor and cutting foot locker. >> matthew is convinced that what's happened here is that the direct to consume model that nike has is just too powerful for foot locker.
and that's amazing because matt also -- in a terrific note is saying that in the department store mall, you have bath and body works, american eagle, you got boot -- boot was the one he turned me onto boot barn. niche, talk about niche, no. talk about win this stock is an credible performer. there are winners. doesn't like -- there's not a lot to say about gap either, wow. but, yeah, i just think if you really want to know the ones that are great, i think five below is great and i think foot locker is is suboptimal. matt has a lot -- he's very early on things always got his big conference coming up but he still likes dollar tree and she still likes dollar general. which is interesting these places are having a hard time to get work too >> i got some record intraday
highs to start the morning despite the million covid case print, carnival is going to lead you. southwest, united, by the way. un united named a top pick. >> people who want to get on ships are not listening to the cdc has perhaps you would advise them not to given what seems to be your criticism for that agency. >> well, i think when frank came on the show, he basically said, you get it everywhere. what's the point and dr. gottlieb worked very closely, he's analyzed these ship companies to go on -- there are outbreaks. they go visit cities, carl it isn't just like they're hermetically sealed. i would feel safer on a carnival cruise or a norwegian than i would in a large office building
filled with younger people who have no regard for us that have any seniority. >> and it's a lot to do with transatlantic this summer, which they believe in. we'll see how much of that is leisure and corporate. >> yeah. again, we'll see that's all we can do at this point. there do seem to be any number of investors who are happy to believe that things are going to return to some semblance of normalcy when we talk about the airlines, we always ask about business travel and we bring on the analysts, jim, and we get different views. certainly, the idea that we're ever going to approach anything close to 2019 levels for business travel, which, by the way, is a percentage overall -- miles is not that large. but is a percent of profitability is large for these airlines that's still i think the key question let's not forget, they've increased their debt loads, increased their shares outstanding. and so you do have to wonder about their long-term ability to get anywhere near back to the
levels of profitability that they once had. >> yeah, i keep hearing from the group, all right, well, once one goes, they'll all go and i come back and i say, it's been a terrific opportunity for margin expansion to use zoom there are obviously, yes, if everyone is going to see someone, maybe it's interesting. not with omicron isn't it amazing that zoom can't get out of its own way. >> it's funny. >> wow >> yeah. zoom at 180. down again just to put it into perspective, it's right near, six points from its 52-week low. its high had been as high as 451. it's down 50%. omicron, thankfully, or hopefully, will come and go quickly. and we will start to see people go back to the office again and perhaps in a more significant return than had been the case, jim. but, you know, you're not -- you're not going to see a road show that's ever done again with people flying around
you're not going to see the typical level of activity when it comes to international travel by business people i just don't see it. and i don't hear about it. it's not that they're not going to get on flights. they are but not as often and so it continues to be a question, although, i don't know what you say about zoom. listen, zoom and peloton, i don't know, a lot of those plays have come and gone, it would seem, at least at this point >> yeah. blizzard carl, it's happening again, they're coming after the crowd strikes and crowd flares and all the companies that are incredibly high multiple that don't make much money at all there's no end to the high multiple stocks being sold and that is a reflection of the bond market. >> we've said this, stocks in the early stages of a hike cycle can do well, if that cycle is
well telegraphed and gradual, but are youworried that this one might not be so gradual? >> i think people stick with these stocks they're using all sorts of different metrics to gjudge them i'm looking at a metric bein used by a company to analyze general electric some of the parts and its earnings per share it's a throwback, but the upgrade today reads very strong. but that's what people want. they make things, they make money. this is larry cole people think that larry is doing a good job they want that more than a one a 30 times earnings company that helps you -- helps you as a merchant bank and you outsource to them and you can analyze the cloud. david, that's, like, 40 different companies that do that have you seen, by the way, if you're splunking, have you seen doug at all? he was running splunk.
he used to come on all the time. what is he, in a cave? what happened there? >> i'm not aware maybe you have thoughts on his whereabouts, but i don't -- >> that's the kind of classic, analyzing -- >> look at ge, there's splunk. not performed well at all to your point back to ge and j&j showed a little bit of life. overall, a muted reaction to be kind to the plans from both companies to essentially slim down, shrink to grow, as we like to say they are splitting up each of them on their own. i don't know, jim. i would be curious to see if we see that kind of thing this year given the lack of enthusiasm by which both of those split plans were met in the market >> well, the aviation, you need to return to travel. that's going to be great there's a plane shortage i think health care is pretty good, not great, not bad but, david, power remains
illusive it's just not a great business and maybe one day, it will but it's just not. witness the fact that one of the problems in europe, it wasn't windy enough and that's why natural gas went up ten times. david, i don't want to have a business that's based on wind and sun. i just think those are two things that are hard to predict. >> they may be, but they are certainly growing, aren't they they're growth businesses. yes, you're right, the wind -- >> how about the nat gas germany yesterday was considering whether nat gas should be considered clean but ge has no green hydrogen plants i think that that one division, carl, is a black hole. people don't know how to value it. >> former high fliers today, pins get cut data indicates that user declines may be in store for the
second consecutive month. >> that stock spiked when we heard that microsoft was interested in them we heard at one point that paypal, that's a company that my trust owns which is starting to go back down again pinterest is an interesting company. the hobbyiest stocks are kind of all -- etsy is coming down i thought etsy had a great holiday season and that's been a terrible performer so i don't know. maybe this whole kind of -- the web is more than just alphabet and amazon right now, that's not the case it's back to being amazon, alphabet, alphabet, amazon, metaverse. >> that's exactly what rbc names amazon a top pick of the year. >> one of the internet's true alpha dogs. >> that's true >> talk about some of the parts, again, aws, what are they worth,
if that were to ever be the case separately >> we know the advertising business is good and the stock kind of ran into this, well, maybe they're expense structure wasn't that good i don't know, david, i think jassy is fantastic i think amazon has an amazing, amazing winter and that, once again, if you use it, i think you get hooked it's kind of like the sackler product. >> god well, let's not make that comparison, thankfully >> okay, maybe, that was off key. >> that was a little off key i know, you may be -- >> i don't know. diet soda. >> that's a little better. i like that, yeah. yeah listen, i didn't have a great year last year and we'll see -- >> no? >> -- how it performs at least early going here quite strong for amazon apple shares, guys, by the way,
approaching 3 trillion again, i should point that out. >> right. >> which is interesting to see >> that's a parlor game. >> one of my favorite lines of the morning in "the times," guys, is about the apple market cap and they lead off by saying 3 trillion is worth more than walmart, disney, nike, exxon, coke, at&t and boeing combined >> it's not as good as it was under steve jobs can we give tim cook credit for -- what an unbelievable juggernaut he's put together it's based on customer service, love of product. do you have the 13, david? >> no, i don't think so. it might be the 12. >> i'm making movies you ought to get one, it's pretty good. you have the watch >> no, i don't have the watch. >> do you have the mac pro >> we have so many different apple products in our household. don't worry, jim, we do.
many of them. >> good, good. >> yes >> really quick, regional banks, pnc is up almost 3% again. kre is on pace for the best day in two weeks. >> this is such an obvious -- i hate the obvious trades. oh, so rates are going up, buy pnc. n again, i talked yesterday about boredom. if you really feel this, go buy key back it's yours >> okay. we can't really own stocks -- >> it's a playbook -- >> i want to point that out. >> it's a drawer for the managers and they open up and it says rates are up, buy pnc they're robots, david. >> let's come back to a name that you like which is disney. >> yes. >> by the way, some very positive comments this morning in this report from wells fargo. it is now a content-execution
story, says wells fargo and they seem to believe that they're going to be able to do it in terms of creating more content that is going to be compelling to broaden out the population of people who use the direct to consumer platform, disney+, so they can get to the numbers that are out there for fiscal year 2024 the stock is responding positively by the way, thiswas not a good performer last year. we've seen a number of those stocks that maybe even caught up in some tax laws selling at the end of the day discovery, key amongst them. up 11.5% so far for the year. >> i know disney might bail out the position for the travel trust. what you really need is a definitive metaverse plan in a sense that, i want to be in there with bambi i want to stop what happened to bambi's mom. i think you can just change history. we found out it was an -- >> undue trauma for a lot of
kids. >> we just get rid of that hunter scene and you can be the hunter and miss. the metaverse, we can sit there and watch 100 different players for fantasy. we can have cameras just on our guys, including some of the jokers that i had that i kept so i didn't win david, i think that -- if you walk to -- i got an idea, david. you call him and suggested the met that verse, what do you think he would say >> an opportunity for the company. particularly for espn. there are plenty of people who want to talk about the idea that disney would be better off spinning espn or doing something. it's not clear to me that would be the best thing. it's in decline. it produces a good amount of cash flow for the company, important when you're going to be spending 33 billion on content. that's including sports rights, by the way, but certainly -- >> they're doing nothing with
gambling they could own gambling. they feel like sports illustrated did when they -- i don't know, carl, when i look at disney, i just kind of think this is a company that if you really believe that omicron is going to burn through, just go buy it >> to david's point, they say we're not worried about the parks. >> isn't that incredible >> meanwhile, intraday highs on the dow and s&p. 4815 let's get to bob pisani. >> good morning, carl. yeah, good start two to one advancing in the declining. that's better than it was yesterday. it's boring talking about rates, but the banks are doing great. the bank etf, up 4% this week and energy is doing great. energy is doing great without oil doing too much we're stuck around 75, $76 a barrel for oil take a look at the sectors here. banks and energy are leading, industrials doing okay today there's all of your cyclical group. the defensive sectors like
health care, consumer staples are lagging a little bit we have nice rotation into cyclicals and growth defensive sectors lagging a little bit new highs today, not a lot of new highs considering the s&p is at a new high. apple, chevron, ford, coca-cola, devon is up there, some of the high beta energy names up there at new highs what's getting hit again cathie wood's ark fund down a little bit, lithium battery. apple accomplished this $3 trillion be fewer shares outstanding. they really do reduce share count, many companies don't. apple has reduced its share count almost 20% since the start of 2018. that's all the more remarkable fewer shares outstanding and
still hat $3 trillion people are trying to figure out what the theme is for the year we know last year, the theme was, it was virus-dependent. we had rotation all throughout the year one part of the year growth, one part values, one part defensive. but it was based on the course of the virus this year the big theme, at least at the start, seems to be rates and inflation. that would seem to favor small cap value and not favor technology and growth in general. nobody has a lot of conviction in this call if we get slow rate hikes from the federal reserve, we could be here three months later talking about growth being back in a very, very big way we're starting out with rates and inflation as the main theme, but there's not a lot of conviction that that will remain that way and we won't go back into growth as a major issue in the middle of the year everybody is all hung up on january barometers there's a lot of them floating around it there.
today is the last day of the santa claus rally. today is the last day of that. it's right on track. it was up 1.5% the average is 1.4%. that's happening along the lines of historic averages there's also the first five days the first five days tend to be got indicators then there's the january barometer, how goes january, so goes the year. the one that i like to look at that makes sense to me is the tax law selling bounce there's a reason to believe in this think about this, companies that have had big losses from january to november tend to see a lot of tax loss selling in the month of december what we often see is those that have had the most beaten up january to november, often see bounces in january in fact, it's april studied, piper sandler released a report on this yesterday. tax laws -- companies who have
had the biggest tax losses tend to bounce in january the average return in january is 1.4% put up that next full screen the important thing here is there's a whole bunch of candidates out there that have been down 20, 30, 40%, unusually big losses last year a number of these candidates may be good candidates in january. these who were victims of the whole china play you see some of the names down big from december to november that are potentially good tax loss candidates for january, potential nice bounces that makes some sense to me, carl back to you. >> all right, bob, thanks very much as we go to break, let's take a look at how treasuries are fairing today. got ten-year yield right around 1.67 by the way, fed minutes tomorrow morgan stanley says we could begin to see a playbook for balance sheet normalization in
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elizabeth holmes found guilty on the federal charges. and whistle-blower schultz will join us in the next hour find out more at cnbc.com/investing club or use the qr code on thecrn. see you're a one-man stitchwork master. but your staffing plan needs to go up a size. you need to hire. i need indeed. indeed you do.
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first met him and he's been the authority on testing, e med. pcr may not be as valuable >> too sensitive >> and too hard to get, too expensive. if we had enough tests, we could have people go home who are sick otherwise let's burn through it. maybe that's not the best way to do it if you're immuno compromised. he sent me a lot of testings from britain and i was testing every single day for long time and then i switched to vinex and we have a fallout shelter. i will not reveal the black ops site my wife gets them from. >> dow's up 264. s&p up 165
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the banks are going to lead and underperforming definitely nonprofitable tech, morgan >> we're 30 minutes into the trading session. so, here are three big movers we're watching this morning. we're talking about apple becoming the first company ever to exceed 3 tr$3 trill in market value. it's up more than 30%. basically flat so, actually below the 3 trillion market level. and ford announced it will start accepting purchase orders for the f 150 lightening pick up it plans to update annually as well and you can see stock's up 6.5% almost. been on a tear, gaining more than 150% over the last year speaking of general electric
ge getting a nice boost and neutral to out perform with $122 price target that stcurrent -- that stock isu right now. the ism manufacturing index came in at 67.7 for september the jolts report showing 10.6 million job openings as of the end of november. so, economists expected 11.1 million and we have record highs again for the dow, and s&p we're going to turn to the broader markets with the highs that have just been hit. wells fargo head of global allocation strategy and northwestern mutual wealth management's chief investment strategist brent, i will start with you
the fact we're seeing fresh highs in equity market and the fact the 10 year is basically back to the prethanksgiving, preomicron levels. the 10-year yield. is it safe to say that investors are pushing past the record covid cases and looking beyond for what's in store for 2022 and if so, what are the key themes you're watching? >> i think the investors are looking past omicron and seeing that there may be better days on the huhs aron for covid. i don't want to make light of the health issue but the market is starting to realize that what led to covid sticking around may be beginning to eb. you've had a shift of goods that's caused inflation to rise and labor shortages. i think the market is starting to believe those are going to be better in the future and
economic growth will be strong but with some of the worries starting to eb think fed fears and covid fears and that's going to push us higher in the first half of the year >> i want to get your thoughts on that. does seem like market and monetary policy are very intertwine said. looking like three price hikes in for the year. how does this play out >> [ inaudible ] so, we definitely think the econ -- sorry about that we think that the economy is going to moderate from here. we're still going to see a good year in terms of growth. but we'll see it moderate. in terms of growth in 2022 but that's going to be a good back drop, we think, for
earnings we think it's going to be a goo backdrop for prices for equities as we mentioned, we're going to see the fed come in and they're going to start the year by tapering and then they're going to finish it out with likely, we think, two rate increases this year so, a little bit less than what the market's expecting because we think the second half gets trickier with the fed active and also with midterms in the second half so, we're expecting two rate increases in 2022. >> hey, brent, everybody knows q1 could be a peek for cost pressures and thebase effects are pretty lousy but the december ism down to 68 from 82. you'd like to see more numbers like that. >> i think that's the real basis
for the economic optimism in q1 of 2022. i think you'll see inflation start to pull back because it's been caused by the goods spending, caused by covid. i believe it's 16% higher than prepandemic while service is 3.9% lower i think in the first quarter, that shifts and alleviates inflation pressures. towards the second half of the year, i think we get a bit trickier because i think you're going to find an economy close to where it was precovid. and that's going to cause fears about real inflation becoming an issue in 2023. we could be the same place we were in late 2019 from a labor market perspective also. i think that causes tricks to be had in the back half of the year
>> where should investors be putting their money to work right now? >> so, we think investors should favor the u.s. over international e equities over fixed income we continue to see equities moving higher in the. >>ing coming here but we look at u.s. midcaps and large caps over small caps and international and in terms of inflationary pressures, we've found commodities is a good asset class and highlighting the midcap overweight we have in inflationary environment >> thanks for kicking off the hour wus i'll saying as great as it is to work from home in the midst of a pandemic, if "i love lucy" were
on tv, there would be an episode about all the technical hurdles we face doing it on a day-to-day basis. >> agreed. i know hopefully nothing will go wrong here in d.c. because i've been left alone to handle it on my own, which is scary too. speaking of cnbc, we're back with a barometer and how the omicron variant is already impacting job growth and steechbl liesman, who's been home for i don't know how long but been doing an amazing job for us >> home? who says i'm home, david you have no idea where i am. i could be waist deep in a stream with a fly rod and a guitar and you wouldn't know the difference here's for deal. could be seen in the official data as soon as this friday's jobs report. unclear how wide the effects
will be. and they count all this stuff. tallying more than 3200 schools closed nationwide. increasing fast, among other things 10.4 million jobs open% fr ukg down 1.7% compared to the previous month now, ukg saying the impact of the virus on jobs showed up in the weekly data and continued to go up each week this month consensus of 400,000 could be opt mgsic. although, it was off one factor, school closures. the numbers are rising quickly this shows they're focussed in the upper midwest and they're
striving all over the country to keep schools open. they're testing before closing and depending on the tests, they could spread with the virus. short-term cutback said -- and one more graphic here. airline traffic remains below the prepandemic leveling it's not getting worse and it seems like it's improved in the last couple of days looking at the long bond yield returning to the preomicron levels while stocks tfair pretty well, they've made up their minds the symptoms will be mild like so far it appears the variant itself >> some great graphics to show. always bringing it i hope you do get out one of
those streams. and scott cone joins us from outside the court house in san jose >> elizabeth homes said she had the power to change the world and to change the future of health care. well, her future certainly includes pridsen the most serious charge includes a maximum 20 years and experts say she will most certainly do time, because of the amount of money that was lost some $900 million raised from some normally bright, prominent inspelkters and she tried to work some of the magic in the courtroom in seven days on the witness stand but not enough to dazthal jury of eight men and
four women, who entered their verdict after about saiv days of deliberations. holmes sitting motionless as the verdicts were read she is guilty on four counts, including conspiracy and fraud against theranos patients and the jury unable to reach a verdict on three additional counts the government will have to decide whether to ritry her on those charges. no word whether they will do that and what this says about, not just elizabeth holmes but this whole culture that this trial brought about a lot of conversation about here in sillicon valley. so called fake it till you make it, where the story is more important than the substance of things
we tried to ask elizabeth holmes of what this says about the dream she had all these yours ago? >> reporter: elizabeth holmes not answering us, as has typically been the case as she left the court we'll learn more about the sentencingdate that's not yet been set and what the government plans to do about the three counts where the jury was hung carl >> scott cohen, who's covered the case from the gbeginning. the whistle-blower will join us. as we look at the state of the economy under the president, we'll talk to nec director about
supply chain concerns and a lut more >> and a closer look at hedge funds missing the mark . and financials on a tear to start the new year with bank of america named the top pick for 2022 at wells fargo. we have got a lot more "squack on the street" straight ahead. o. new gold bond pure moisture lotion. 24-hour hydration. no parabens, dyes, or fragrances. gold bond. champion your skin. competition beat us again. how? they have a better finance system than we do. i feel like they might have a better finance system than we do. workday. how do they make better decisions faster? workday.
out with a new poll asking voters their thoughts on the state of the economy hi, kayla. >> we canvassed nearly 2,000 veeters in late december and nearly two-thirds said it issent good and will get worse. in an environment with little common ground between political parties, both democrats and republicans say rising inflation continues to hurts the erecovery. they say the price of every day goods is worse than a year ago and when asked which expenses are rising that give them concern, they say groceries, gas, health care and everything. and they don't see it getting better anytime soon. 52% say they'll stay high for a long time and a quarter say current sticker prices are here to say an outlook that could be costly at the polls this november the administration's messaging
has focussed on corporate inflation and the pandemic as reasons but there hasn't been enough buy in to shift the blame away from the president, who, according to the poll, shoulders 38% of blame from the voters some say president biden has control over the retail prices of gases and grocery, even though there are few policy tools to combat inflation but that's not how voters see it >> joining us to talk about that and a lot more is nec director of the white house good to have you with us >> thanks for having me. >> we talk a lot, on our air about record numbers of jobs added and jobless claims the lowest levels since 1969 but it's not showing up in our polling data why do you think that is >> i'm not for a pollster but i think the american people have been through a tough couple of
years and ntdsably are frustrated and anxious about the current shich r sichuation and i think we're in a vardifferent situation than a year ago and there are lots of reasons to believe we can continue making strong economic progress our focus is really on delivering tangible results because i think, at the end of the day, what the american people are focussed on is less rhetoric or political talking points and fights and what we can get done if you look at something very concrete like the challenges of the supply chain, there's concern packages won't get delivered on time for the holiday season spent a lot of time trying to unstick the bottle necks and have made a lot of progress on that front that's the type of practical focus we're bringing to solve problems consected to the practical challenge said people are facing in their lives.
>> i wonder if you think it's a comment on how powerful an inflationary mindset is. the market pmi data yesterday shows delivery delays. backlogs lowest in 10 months frrtsds pay data a few months ago. how much is riding on this data trend continuing >> i think we're in a unique moment and obviously the economy and the virus are inextricably linked that's what we've been saying for some time. it's hard to extrapolate on current sentiment. in a very precise way. but i think there are reasons to believe we are getting our way through some oaf the supply chain challenges obviously the omicron variant poses new risks. if you look at the goods movement flow through the logistics supply chain, there are reasons to believe we've been able to address the
principal bottle necks we're going to stay focussed on it and not downplay or dismiss the risks on the horizon but at the same time a lot of reason to believe we can work through the issues and get back to more normal operating rhythm. >> i'm just curious what are your expectations for inflation? it does seem to measure prominently in the psyche of voters and you have the midterms coming up only ten months from now. how and what is inflation going to look like by next fall? >> i think if we continue to take steps right now, what we can do is continue to propel forward a strong economic recovery while reducing the price pressures. and if we do, we'll see moderation in the price increases through the second half of next year. we have some of the strongest
economic growth underlying the recovery we've seen in decades the strongest labor mark we've seen in quite some time and household incomes and balance sheets in a historically strong position, even when taking into account price increases. we have a unique opportunity, unique the united states to address these problems from a position of relative stringt i think we'll see the moderation most independent forecasters are projecting >> build back better seems to have faded a bit but certainly plenty of people who say rirtds not dead yet those who had concerns did site inflation as one of the key reasons why they were concerned. and can you give us an update in terms of whether build back better is going to come back
>> we're committed to getting build back better done and confident we will do so. we have a lot of work to do on the elements but we're confident we're going to get it done and your question about inflation is spot on. if your principal concern is costs the american people are facing, build bag back better is a direct result of that. if you think about costs, housing, health care, preskrichgz drugs, child care, build back better will help reduce the costs from family budget level and because it is paid for, it doesn't actually add to aggregate demand and won't have inflationary pressures in the short term. nalts trr why most, who have looked at the bill, suggest is it won't have any inflationary impact in the short term we need to get more americans back working
with what we're seeing with omicron, reducing the cost of child care is about helping get more people back to work i think the economic case is even closer in the context of concerns about inflation it's a legislative process and we're confident we're going it get this done. >> to dig into the broadnerflation discussion little bit more. how do moir regulations and the case energy, which you've talked about in recent weeks as well, palt l policies that deincentivize u.s. oil and gases production, how do these work to lower prices >> you raise the question energy and it's good example. the president identified several months ago we had a challenge of an anticompetitive behavior by
international counterparts keeping oil off the market, not commensurate with the speed and the scale of the global economic recovery he engaged in a way he does across these issues with oil-producing and oil-using companies to insure opec stayed in the cadence of supply increases and bringing consuming countries together to korbdinate release of stocks. that's something we think can be helpful in moderating impacts and getting us to a place where we're having supply meet demand in the market. and at the same time we're going to make sure that regulatory agencies that have the responsibility of protecting american consumers are keeping a watchful eye that no one's take advantage of consumers.
that's another element of what we're doing as well. those are the type of appropriate steps we can takes a we propel a recovery underlying with that. >> we want to talk about energy supply chain and meat packing as well good to see you. thanks >> happy to do it anytime. >> as we head to break, we're keeping an eye on chinese tech stocks including names like j.d..com ticker k webb is down more than 4% wl
sales year over year of 30.2%. the estimate was for a decline of 30.5% and gm numbers coming out shortly. basically we're looking at a mukts with more restricted sales and when the sales pasz comes out a little later on today, what rur like to is somewhere around 12.9 million vehicles very depressed relative to what people had been expecting. likely around 15 million is going to be the sales pace offset by stronger sales in the begin thofg year before the tip trices hit back to you. >> and you'll bring us those numbers as they hit the tape thank you. time for a news update >> hi, morgan and here's what's happening at this hour another milestone in the mandemic
confirmed cases fuelled by the omicron strariant and it's inflated by reporting delays of the holiday weekend and deaths have not been increasing and saying the cdc is working on what he call as clarification on whether peopleside the test at the end of the recently shortened five-day isolation period and changing the recommendation for people who receive theifiesing vaccine and says you can get an additional dose after five months, not six. no change for j&j and moderna. drivers have been stuck on a 50-mile stretch of the highway in virginia for hours. it was shut down during yesterday's winter storm and many older black berries will stop working today. those made before the operating system change in 2015. and no judgment if you still
have a blackberry, but if you do, what are you doing >> we need to talk >> what are you doing? >>, if heranos founder, elizabeth holmes, has been found guilty on multial charges of fraud. and joining us is former board member we feel like we almost know your story because of how it's been documented did you expect this day would come i first metd her whennium rrl 21 and now i'm 33 it felt like it would never come but it finally did >> sounds like you're happy about some of the strurkts but not all. >> yeah.
i'm definitely happy that she was found guilty for deprodding investors. i'm a little disappointed she was found not guilty for defrauding the patients, who were the real victims. i stuck my neck out to protect the patients and not beltsy devos's $20 million investment i'm happy that we got foir guilty verdicts. >> it sounds like you were not surprised at her ability to leverage her story telling prowess during the trial i'm not sure exactly what you mean by that, but do you think that was part of her defense >> definitely. so, elizabeth is an incredible story teller, very charismatic in person and she was able to suck in very high-profile, smart
people into the reality distortion field and when she took the stand in her own trial, she tried to do it ageb. luckily the jurors saw through it and were able to give her the guilty verdict >> you know, there's probably nobody who's thought more about this han you have. with her being found guilty, what do you tell viewers are some of the less ones in your perspective? >> i hink the big less on is the fake it till you make it and constantly iterating your product and testing it on new users does not work whether it comes to health care but at the other end of the product, there's a real person who may have a real medical condition and you can't play with people performing lives like that. i think the move fast break model does not work in health care
and i'm happy that the ceo, who was implementing that on real people, is being held accountable. >> there are many viewers who may not be that familiar with your story obviously, you're the grandson with george schultz. there was a break in your family too, a certain extent, when you said things are not right at the company. where do things stand for you personally and what would you tell other whistle blowers, who would be somewhat reluctant to speak up >> i was able to reconcile somewhat with my grandfather before he passed away. the rest of my family, my parents have really had my back through thick and thin luckily i've had that through all of this. it took a huge financial teal a huge emotional toll and blowing the whistle is a lonely process.
i think moving forward what i want to focus on is help make the journey less painful for future whistle-blowers i'm working with a group called the signals notework that helps connect whistle-blowers to even s safe houses, if necessary. i hope to continue to work with groups like that to take the lessons we've learned from the theranos experience and hope tale make things better in the long run >> lonely but certainly brave. i wonder if you think this sets the precedent for more founders to be scrutinized more >> i think this has shown you needed to distinguish between visions and reality. what is happening and what you hope to happen in the future in sillicon valley, those lines
often become very blurred, when entrepreneurs are competing with each other for capital and it's tempting to say things are better than they are to secure the capital. i think it's fwr we have at least one case of consequences taken too far. >> you raise an interesting point because tim draper, a long-time defender of holmes said if this securityany happened to every entrepreneur, we'd have no automobile, no smart phone and our world would be less for it he says it's investing in progress, meaning you don't quit, even when your product doesn't work you think that's valid at all? >> i see his point but i disagree with it i think a lot of investors are looking for founders who will run through walls to accomplish their goals, who absolutely
refuse to fail i think there's a time when it's the responsible thing to do is to fail and i think theranos went way past that point >> finally, elizabeth holmes, herself, i was able to spend time with her. she's quite compelling in telling her story and conceivably a lot of lies. what do you tell people about the story, given the giltdy verdicts we got here >> what i'm telling people now is that for me, it's been a longer journey finally happy it's in my rearview mirror, personally. >> we're grateful to you for sharing your thoughts. what an ordeal for you and your family thank you very much. >> thank you >> as we go to break
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welcome back to "squack on the street." let's get back to phil lebeau out with gm. >> q4 sales a little better than expected but these are not solid numbers through the fourth quarter or december baz of the limited supply due to chip prices. non nonetheless, better than the estimate, for a decline of 46% i want to show you a chart comparing the two stocks the sales numbers for gm came in at 2.2 million and toyota, 2.3 million. r not a surprise gm out sold --
toyota out sold general motors it will be interesting when you have a normal chip supply and none of the strange things we've seen to see what the market share will be. but again, toyota outselling general moters for the first time for a full year >> and shares of both stocks are higher today the real estate industry in new york city is well, booming robert >> reporter: good morning, morgan apartment and town house sales hitting an all-time record of $30 billion last year. and what started as a buyers marked a year ago is a sellers market and apartments sold for 98% of the asking price median sale price is jumping 11%
in the fourth quarter. the average price will cost you 9.95 million prices fell 6 to 7% at their lowest the sales are being drivlen largely by the top end, especially the penthouses and three to four-bedroom apartments in new development inventory faurling by 3rd. that's the fastest decline in recent histories and there were eight deals over $50 million. the most expensive was joe tsai's 157 million and jeff baiz bezos with a building downtown >> one central park tower, the giant xl building, over 100
stories high on 58th street. for a while t looked like it was going to be basically back to the lenders. do you have any idea where things stand for a building like that >> that building and the old steiner building, equally high but very thin, they're selling better than expected but the billionaires row has been tough. the overseas buyer came back when they could return to the u.s. where the wealthy buyers are buying is downtown that billionaire row, midtown is not a great neighborhood they're filling up but it's slowly -- and many are hoping next year, when the foreign buyers really return, they'll sell out but they're doing really well. >> thank you, robert frank
meantime, let's get back to commercial real estate u.s. covid cases set a daily record of over 1 million good to have you let's just get to -- get back the office, which seemed to be moving along at a steady pace and expectations by midjan wuary for a lot of workers to bring workards back. >> omicron has delayed the return to office and the return to office throughout the pandemic has been somewhat of a gamble every time a company sets a date, seems it gets moved back and that's a function of a virus, not anything else and obviously concerns around the spread the hope and i think the science is starting to prove that it's a return to office cycle and once this passes, which is
hope hopefully going to be quickly, we should be back on track >> what does that mean given, again, the almost two years of starting and stopping and a lot of workers who seem reluctant to return overall >> highly dependant on the virus and if there's another variant after this let's assume we go back to the preomicron days, then many companies were planning to return early in 2022 the milestones on the kap calendar dictate the return to offices. first you'll recall many deadlines. the one before january 22 was after labor day and that got delayed because of delta assuming we go back to what was sort of the atmosphere or environment prior to omicron, i think we could start to see a lot of companies return late in the first quarter, early thin second by the current estimates we
ought to have the worst behind us by february >> i mean, we started the conversation talk -- or this block, i should say, talking about manhattan and new york city specifically. but given all the u.s. markets colliers operates in, where do you see the greatest opportunities in 2022 from a commercial real estate perspective? >> yes, manhattan is tough, just like san francisco obviously, you all know this better than i. but a city that requires commuting, which bring as heightened sense of concern for those commuting because they have to get on the bus and subway and there's a heightened chance of spread in those environments, perhaps more than in the office. so, those that require commute are having a tougher time than other cities and suburban areas.
su suburban has become popular from an auflgs perspective. it's a function of the virus but also a function of the way people now want to work. and pretty much anywhere there's a lesser commute or you're in a suburban area or less dense area, that's an office stand point, folks are more likely to occur. not to say there's not interest in the end to go back a month or so there will be interest again in central business districts it's not completely dead but ought lot of the activity has been outside those areas >> those in new york, for example, 4class a buildings seem
to be maintaining value. are you surprised by that >> a little surprised. it does speak to assets and the fact that investors are looking beyond the pandemic. perhaps that's seems t cloud. but i think that investors are taking, just like in the stock market, are taking a long-term view, we will eventually beat this pandemic. and once we do, then those offices have value they may be used differently than they were historically, but nevertheless, those assets have value. it's where people come to work. >> gil, thank you for your time. >> thank you coming up this morning on "techcheck," do not miss an exclusive with amd's chief lisa su her stock is coming off a strong 2021 campaign, up about 16% over 12 months. that begins in ten minutes as the split between the dow s&p naaq pretty remarkable be right back.
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that includes citizens financial, pnc and the wall street giants like jp morgan, wells fargo and bank of america. jp morgan up 4%. citizens up about 5% a little less than that the moves come as u.s. treasury yields rise with the ten-year hitting the highest level since late november. resqwkn e re" after this
welcome back to "squawk on the street." mixed picture for the major averages, but hedge funds missing the mark in 202 1, lagging the s&p. it wasn't close. leslie picker has that analysis for us. >> we're looking at the goldman sachs 50 names appear most often hedge funds. that basket shows it's the vip list, turns out that group delivered 11%returns last year that's just a third of the s&p 500. now, what's remarkable is that the top names in the basket are essentially beta, they look a lot like the market itself, microsoft, amazon, meta
platforms and alphabet but it was really the other 45 names that dragged down returns, such as uber, mastercard, singapore based e-commerce company rounding out that second tier of course, equity-focussed hedge funds also go short. turns out a group of vip shorts by dollar value was actually up 23% last year opposite, of course, of where investors who are betting against these names would want the basket to go. that basket comprises names like tesla, s&p global, moderna, bank of america and home depot, all of which, not just outperformed, but dramatically outperformed in 2021 we're expecting individual returns to be shared with limited partners who invest in hedge funds throughout the week, early signs, though, show very large dispersion in the numbers that they're reporting some have been trickling out d.e. shaw compos it return 18.5%. a source teld me, pershing
square returned 27%. those numbers look really good but others like melvin and maybelline suffered large blows during the short squeezes at the beginning of the year and are expected to close out 2021 deeply in the red, david >> i think we're having more technical difficulties leslie, i'll pick it up here i guess just to follow up on that, how does that set us up for 2022 and where we can see investor flows where hedge funds are concerned? we've seen these types of underperforms in recent years past >> yeah. i feel like i say the same thing every year ever since i've been on this beat for about five -- little over five years and running now, but the pitch is this, there are all these macro factors, you have inflation,
fiscal and monetary tightening continue to put money with hedge funds and we'll protect your downside the patience is running thin for lps. people who see that diversification will continue to do so, morgan. >> leslie picker, thank you. that will do it for us here on "squawk on the street" with the dow up about .8% but the s&p just dipg negative and nasdaq down 1.5%. "techcheck" starts now ♪ good tuesday morning welcome to "techcheck" isle carl quintanilla with jon fortt and deirdre bosa the results are in, elizabeth holmes guilty. the reporter who broke the story wide open will join us this hour then, what sho