tv Squawk on the Street CNBC January 5, 2022 9:00am-11:00am EST
products out there that they're selling. you know, the opportunity right now for the privacy markets, you see valuations getting a haircut in the private markets you're not seeing that haircut valuation. >> yeah, we got to go. absolutely that's what we've got to look for. thanks very much join ugh tomorrow. "squawk on the street" is next good wednesday morning welcome to "squawk on the street." futures moderately -- and two days off rotation, fed minutes will be important. but 807,000. the biggest jump since may
plus stocks are unpressure this morning, salesforce and adon'ti among the names moving lower ahead of a key analyst downgrade. we'll get to that. we'll chrysler says it will go all-electric by the end of the decade lucid planning to launch in europe this year actually a lot of activity this morning, jim, surrounding pfizer, not just the initial order for the pill, but b of a arguing we may get a shot every three years. >> dr. topol was saying it's a simple molecule, this pfizer drying, and president biden would do well to use the defense authorization act and use every
company to make enough pills topol said this is a chance for the government to take control of the narrative, and say, listen, we're not just going to stop at pfizer it's not right >> so they were a prior 59. >> i like that call. i like the call. i don't think the president will be bold enough to do what he should do, take this thing away so that everybody makes it topol is saying it's possible that everybody gets omicron. >> this is what the president said about the pill yesterday. >> we now have a new pfizer pill that greatly reduces the risk of hospitalization and death. they're already saving lives, but due to the complex chemistry to make the pill, it takes months, literally to make a pill, but production is in full swing. the united states has more pills than any other country in the world. our supplier will ramp up over
the coming months as more of these pills are manufactured today i'm directing my team to work with pfizer to double our order from 10 million on to 20 million treatment courses to be delivered in the months ahead. we may need even more. in the meantime, david, dealing with more restrictions hong kong disneyland will close, tighter hours at macy's amex delaying return to the office. macron talking about the unvaccinated today. >> it's funny, because we know what's going on in this country. jim, i've noticed you spent a good time talking about china, in part, though, because of the continued concerns in terms of how you invest when there's crackdowns coming on, when macron had something to say about france >> they have a lockdown. china seems to believe they can
lock out covid as well in order to just keep the -- at some point, will that impact their ability to grow? >> i think thatobviously right now there's a big contest i think among the party members, actually, at the very top about growth versus slowing growth, versus the olympics, make sure the skies are clean, versus coal production, or do we have enough energy david, i think they can lock things down. the reason i think they can is it's a totalitarian country can do a lot of things that we could do like charlie munger's discussion, who is buying alibaba, i just think the complexion of that company has changed rather -- from when you were there. >> understood.
how do you continue to open up again when you continue to apply the standards that they do >> because compared to the rest of the world, they are taking certain a very different approach at this point, given two years into the pandemic. >> that's very true obviously the cdc is in dis array. there's a love of people who are sick, but we don't have enough tests. they ideally would like ten-day quarantine, two day tests, so they switch us to five days, if you're feeling well, go. i had on last night the leading doctor from harvard, saying day six and seven can be or rend out for infection to others. so i think the strategy is very
ill-advised. >> and dr. gottlieb's position that because they have a short shelf life, they would have been impossible to stockstockpile. >> if the president had said, simply, we want to buy as bush by the way, billions of test kids, many from china, but the cdc seems to want to have abbott and -- there's tests around the world. >> that work >> yeah, they work, but last night, the doctor was saying there's no rigor to what the hey, if you do five in a real tight -- i mean, it is a fiasco of incredible proportions, carl. david, you know -- everyone seems in the mainstream media
seems reluctant to criticize the triad that's the cdc, the nih and fda, who don't talk to each other and disagree with each other. >> yeah. well, you're not, you've been willing to criticize and doing it consistently and perhaps correctly. can we talk about, you know, just the she lacking the growth names have been taking in the last few days. shopify down 140 points, and then we've got to get to -- jim, we've got to get to the salesforce note. i can't tell you how many people mentioned it to me it's really color people's view overall. the downgrade to neutral on salesforce
>> it is a well regarded analyst. >> it's good a lot of people bought salesforce stuff last year, and they're going to have not as good a year, adobe, by the way, is cut, and adobe had a meeting where the last quarter was not as strong as they would have liked, i believe, but, david, this is the kind of thing you get when you see stocks roll over and people want to put a face to the rollover i do not think that benoff, who is the ceo -- co-ceo of salesforce, is doing as badly as this piece of research says. if you want to talk about research, these stocks are down huge suddenly we realize that maybe they were expensive? suddenly >> all true. >> and we know you'll be a defender of salesforce you have a right to have done
so it's been a great performer, but specific to this, because it doesn't appear it's just isolated to salesforce that seems to be at least the concerns of those reading this note, the idea that a lot of spending was pulled forward. the survey with quite a few different customers and partners, indicating at least, in their point that, you know, the idea they were sitting in front of a multiyear front office investment cycle has changed, jim ultimately, whether it's salesforce and they also bring up adobe and other smaller crm peers, there was a question whether or not you had a pull forward in sales that is, therefore, going to mean this year and next will not be as strong as expected >> look, salesforce traded its highest at 311 now it will be trading at 230, 235. i think last quarter was good. they did have a ten cent hiccup
of which was currency related. i have since determined that it was currency related i think there wasn't as much risk as there was at 311 i think we have to identify that you said let's talk stocks i want to talk stocks that are down a great, where analysts are catching up. maybe it's time to switch direction. the sell-off in growth -- i still -- i say that on scott's show at "halftime report." the sellout is beginning to outrun any slowdown there may or may not be carl, i read these reports and say, wait asecond, i think the real problem is that salesforce sells at 52 times earnings, but there's a lot of stocks that sold between 25 and 10 times sales. those are the ones that are uninvestable >> no earnings to talk about. >> no earnings to cut.
look, this was about momentum sale, raising price targets. i think you have to accept the fact at 52 times earnings you're not going to get salesforce for much cheaper >> salesforce and adobe will get all the attention, but they actually argue it's tech hardway. >> i urge them to listen to the ces present ace, which was not made by jensen huang >> i mean, they people listen, the main props
we'll dig into it after the break. ford is due with december auto sales in a few moments we are expecting more news today from chrysler and gm, as we watch innovations in the ev space. a bunch of calls for furutes wee back in just a moment. don't go away. and want to make the right moves fast... get decision tech. for insights on when to buy and sell. and proactive alerts on market events. that's decision tech. only from fidelity. your record label is taking off. but so is your sound engineer. you need to hire.
and if the f-series. about what the are they goods to do in the series their deliveries were 726,000 for the year, not far from where they were. a falloff, but not a huge one. guys, back to you. >> we do want to touch on this aliegeant stuff we've been watching. >> and this is a big deal for boeing it has sold, or reached an agreement to sell to 'liegeant the significance is book price
5.5 billion. we know that none of these planes are ever sold at full book price there's another option for another 50 for boeing, this is significant, not only because it's stealing some of the business from airbus, a traditional airbus customer, and it needs this. at the ends of the year, there was a flurry of orders for airbus they had two significant wins of boeing customers who switched on the floor and placed orders with airbus so for boeing, this is a significant win, 50 going to aliegeant legiant airlines >> i believe fort sent the best chips to the best f-150s is it possible you got full-figured chips in the most
expensive f-150s, so therefore the earnings themselves per truck and for the quarter might be better than expected? >> sure. plus they have the pricing power now. there's so much demand out there, such tight inventory, that the dealers are going to -- i mean, they're seeing this with their customers. i've talk to a number of dealers who say, look, if you're looking for a vehicle, especially the most popular one in the country, you'll have to pay up. that's the way it is i think we'll probably see what we're talking about, jim, when the earnings come out later this month, you likely will see strong growth, especially on the margins in north america. finally, phil, chrysler going all electric by 2028 we're looking for an all-electric chevy silverado today out of gm? >> we're going to be talking with mary barra, that's comes up
at 2:15 on "power lunch. she'll show us the silverado ev. we'll talk about the push into the electric pickup truck rates. the f-150 lightning has stole all the headlines in the last six months chevy is saying, wait a second, we're not dead in the water. we'll have a truck to compete. keep in mind, that production will be starting up. the deliveries will start in the first half of this year or shortly after. we won't see the silverado until production later this year and then you'll sigh deliveries ramp up in 2023, but this will be the real battle within the auto industry -- electric pickup trucks. >> phil, i believe also, again that the lightning f-150 ev are the full featured, most
expensive. this could be a renaissance in profits for this business, don't you think? >> absolutely. if you were not all electric as soon as possible, you're going to be left in the dust, and you're going to sit there and say, whoa, where are we? i know 90% of the vehicles are internal combustion engine vehicles i realize by 2025, even if we have the battery supply that is needed, jim, we're not going to do more than 11%, 12% of all vehicles being sold being electric vehicles. that said, it is where the profit margins are expected to be, especially as the price of batteries come down. that's why ford is going to be pushing the high content f-150 lightnings there's a lot of people around the country, jim, ordering, saying i can't wait. the reality is you may not get it for a while they have doubled production, but the first ones will likely
go out to california and other states where you have the zero emissions regulations that are there. it will be an interesting year and a half, to say the least >> well, i have good news on my maverick i ordered eight months ago. the word is my dealer may be having it. phil, no one even talks about some of these trucks like the maverick it was a huge hit. eight months is a long time to wait, but i'm a patient fella. >> sure. [ laughter ] others are waiting -- [ laughter ] >> jim, i know a number of people in the market, whether it's for a pickup truck or something else they don't even talk about it anymore. i talked to the dealer and they said, i don't know, eight weeks? that's just the way it is. >> meanwhile, all inventory down to 23-day supply a year ago we had 46, thanks to morgan stanley last night. phil, a lot going on on your beat thank you. coming up next, we'll get
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it this man has really, all along, said regeneron is not going to be the next great company. he's been wrong the whole way. now he's starting by saying there's moderating growth trends and doesn't like the extent into a new dreg for asthma. i think he's wrong he's been a bear, where wherever he's been, he's been wrong i think he will be wrong again in that the stock is a buy i think it's a great company. >> is your dispute about the cocktail >> i do think he makes a point, look, they're not going to clean up on covid, but that's not really in the numbers. it's not a reason to sell the stock. yes, it's a reason to buy pfizer, if was defense production act is not invoked, i think the president is perhaps
ill-advised on how hard that pill is to make, but he's questioning the whole franchise. he's questioned the whole franchise now for ages, and regeneron has defied that. i think they're doing a great job. >> we have pfizer and biontech teaming up again, on a vaccine for shingles. >> that would be nice, though i still haven't gotten mine. i keep -- >> david, that's -- >> you cannot get to a pharmacy now and get anything, anything >> i'm worried about you you're at the prime age to get shingles. >> i'm aware >> the drug works, and i think you're tempting fate. >> i am. i'm aware. it's on the list i'm going to get it, but it's not easy to get an appointment these days, as you we know, in any pharmacy. >> glaex omil klein black os gle
>> i'll send it back over to you. >> the big board, spac, celebrating its recent listing at the nasdaq it is new york-based nonprofit abc food force. david, we did men some media names. we god some yearend subs on hbo and hbomax >> it's going to be interesting, as this year progresses. we also got numbers from at&t. their shares are up, they're presenting at an investment conference this morning. discovery has moved up dramatically this year ago being
a very strong performer last year the deal itself until which it will combine is only a few months away from likely closing, and there will be a great deal of focus on david zaslov's ability to grow direct to consumer it's interesting, jim, there's sort of a -- some people are questioning the overall direct-to-consumer strategy, given what may be a significant slowdown in the ability to garner new subscribers for any of these platforms the marketing and the just incredible expense that takes place at these companies in order to garner new subs, who oftentimes turn off and are not nearly as profitable as the old-fashioned lineal systems we became accustomed to we'll also be watching closely, the ability, of course, of
discovery to deliver that they've been talking about you know there's been concern about how levered that company will be. you've talked often about at&t, but so far this year, there seems to be a good deal of enthusiasm for both of these names? >> it's a nice bounce, a tax loss bounce. atlantic equities says sell roku a lot of is is what you're talking about. the so-called plus factor, i they are we're all exhausted by plus i have a lot of plus >> roku, they're looking for nearly 50% downside, though "yellowstone" 9.3 ratings on the finalist that's a paramount plus product. >> my wife loves it. i couldn't believe it. this has an oddity of who likes it and i think that's very encouraging for them in the end it's just a western where they beat up people.
[ laughter ] >> jim, i want to dumbcome backo the theme you talked about last night, these high-growth names are getting beat up. i mentioned shopify. it's down another 2.5% it's reflective of what overall has been a lot of names getting hit very heart in these first few trading days of the year look at that you know, what is the approach here in terms of how long this will go on, whether this rotation will be a real one from growth to value, particularly high growth on the top line, but not a lot of profit growth companies with high multiples getting hit. >> they have to have interest rates come down, and then, david, we have to get rid of the love right now for companies that make things, that do things, and make profit. i don't think that's going to
happen anytime seen. it's obviously a program, obviously mindless, you mention the hubspot. if you want to ask what the key for the market is, wait until this little company, $25 billion company, wait until the selling stops. that's one of the most overvalued stocks there is totally selling on momentum, but be careful about going against snow snowflake. there's a company that could earn a huge amount of money right now, but he wants to own this resident the cloud situatin >> let me come back to salesforce, because we mentioned it toward the top of the broadcast, as ubs downgrade this morning seems to have gotten a lot of attention the reason i'm focusing is there's a lot of people investing in it who focused me on it.
adobe and salesforce, you talk about multiple here's a key paragraph from this report this morning. listen, we usually look at a company like this as gen rule of thumb having a free cash multiple, and so if organic growth at salesforce were to be 15% to 17% top line instead of 18% to 20%, then the 42 multiple on cash flow right now might appear not to be cheap your thoughts? i don't buy the pull-through i never felt -- this has been a constant harang about mule solve not doing that well. i think tableu is doing well
people will say -- they're remote, you don't have the -- you didn't have the big dream force, but i will say this, david. there's a lot of big out there for them look at what they're doing with ford right now it's a substantial thing they're doing with ford. there's a lot of business in areas for software as a service that haven't even been tapped yet. i want to go against this thing when it's down 20. i have liked it since eight. i've liked apple since five. there it is, another stock you have liked all the way up lately yesterday's move was extraordinary, of course, on the back of the numbers of what their expectations are, perhaps for the f-150 lightning. has ford run a little too far too fast >> that's a great question gm picked up at the end of the day, too it was something that, had you attended my investment club, our
first meet was with farley i think he pretty much tipped his hand this could happen i was surprised it could have such a big move. the one thing you have to tell you, it sells at 12 times earnings the earnings are real, and they could be fantastic this year because of pent-up demand. they have a good deal with global foundries for these large chips that are not the kind of chips, say at ces, the ones that jim farley needs i think you let it come in, but then you have to buy it, because it's not an expensive stock. i think they can raise the dividend, too, david >> okay. carl >> okay? >> yaeah, okay. >> go get the shingles shot. let me talk to carl. >> it's not that easy being here alone.
i can walk over to your "mad money" studio. i'm alone in like 15,000 square feet of space here nobody wants to come near me >> on scott's show at halftime, at least we'll be comfortable. i think we're separated as far as, california versus new york carl, the separation thing is really great, but more importantly is testing the fact is abbott is going from 50 million to 70 million abbott is not raising the prices it's walmart and kroger. >> the deal with the white house expires, so prices are going up. >> carl, the chaos is the cdc is ten days, test twice negative, then shortened it to five days and how are you feeling? >> would you have been happier had they kept ten? >> you couldn't do ten without the test that president biden
promised and he couldn't make go >> you just can't remove people. look at chicago schools this morning. >> yeah, i know. >> it's just too disruptive. >> i'm against -- a lot of people say this is political and haz a shutdown i want to keep everything open i do wish we would allow foreign tests to come into the country, if the fda would approve them, but they haven't that's another ill-advised move by our government. >> all that said, all the worries about it, travel is doing well again jeffries initiates carnival at a hold, but i think delta was named a top pick jeffries, delta top pick for 2022 air traffic has bottomed, they said >> look it, if you are walking around with omicron, then you can imagine we're going to burn through a lot of people if you
want to be vaccinated, fine, i've done that, i've preached that, done that, even my wife is, like, jim, stop it if they don't want vaccinations i'm in the shut up camp. but we're going to burn through this -- remember the class you had to take where you had to do the expo nemplgally, you know, times ten, we're getting that. when a mill won people are spreading it, because the cdc told us we're not spreading it, man, you have a pandemic on your hands. >> yeah, one thing people don't intuitively get is exponential decline, which is a function of exponential increases. i think itle happen by the end of january, there's zombie people, they're infecting people, it's about the second line underneath. you want that to be very light, and you have to wear a mask, but, you know, there's no science, carl, that said there should be a ten-day to five-day. there was a recognition that
perhaps the country has to move on. >> i always think of you when we think about going out, having social interaction of estee lauder -- b of a warns a valuation. >> we sold it for the same reason, the chairmanable trust david, you will love this. estee lauder is a travel stock the most they sell is at duty-free. >> i've been to duty-free, but i never actually buy everything. it's not really cheap. sorry, it's just not estee lauder sells a lot there they sell a lot in china chinese middle class is buying like mad president xi has not said anything about the middle class buys things that are reasonably priced he is very pro-middle class. we talked earlier today, carl, do you want to invest there.
he's very anti-rich, very middle class. he regards us as rich, but he has 800 million people he has great appeal to. kellogg downgraded at before of a today have you seen the price of cereal >> well, cereal is -- it -- remember bogo, david >> yes. >> what is bogo? >> buy one/get one. >> i've got it. >> he's been to the supermarket. my god, cheer icheerios what's the price of milk, dave >> i'm on top of that situation. i know milk. it's a lot of money, especially if you're buying the -- the horizon stuff. >> switch to oat milk. how about -- >> kfc, doing beyond meat
nationwide for a while. >> i can't wait to eat that. >> oh, boy. >> what is that? >> i think we had beyond in the premarket. >> they're starting to make a bit of a comeback. >> meanwhile, did i hear you say that you don't want to own estee lauder >> i say it's moved up. >> you have been a big proponent of it for some time, talked about its strategy in china and the importance of that market being a positive for a long time are you saying you're out? >> yes, we sold it i've liked the stock since '80s. he's brilliant, a gentleman. and they have skincare, the deal with ulta was brilliant, but the stock is going to the fabled 50 times p.e. the 50 times p.e. is very hard to swallow here. remember, that's what happened at salesforce. 50 p.e. on earnings is very
tough to own carl, 50 po, e. on sales, no 30 p.e. on sales, no >> on the flip side, a name we mentioned yesterday, pinterest up better than 2%, as we're finally seeing some trying to defend these names. >> look, i think people feel that silverman wants to sell out. i don't think he does. young guy, enjoys it i think that, if you look at this one, it's the one that people feel could be for sale and could augment earnings david, you know that there's not any consolidation in this segment whatsoever >> yeah, listen, there was something there with paypal. there's something -- there is definitely something to be thought, jim, that he's interested in listening if anybody comes knocking i think you still have -- >> i agree with that. >> that's got to be someone even now on the stock price, then we can move on to paypal, by the way, which i know you were talking about a bit, given its
performance last year. has that gotten cheap enough >> are you picking on me >> i'm not picking on you. i praise you all the time. >> baba black sheep -- listen to me, pilgrim. >> and in ford and nvidia, i'm your biggest fan, jim. >> all right paypal every time it goes up there was a recommendation of it but dan shul man was on "mad money" not that long ago, he did a line in the sand at 184. so far he's been right the interesting thing about paypal it's gone down to 41 times next year, and with 21% growth rate, it's worth buying here dan is having a hard time figuring out what the last quarter will be with the ebay overhang that's what i stock did. evercorp names it a top
pick, along with mastercard. >> yeah, these are two travel trust names, a lot of -- we did let some go, because it's been such a straight-up stock the payment section got good the way to watch whether it got good is mastercard and visa, but there's a movement to believe that these stocks went down way too much remember, david -- >> because of buy now/pay later? that was a huge theme last year. >> everyone got too excited, because it became buy now/don't pay. >> it's had a nice move so far for the year we're talking about two trading days square is actually down about 4%-plus. >> and affirm, they've had some trouble. i don't think we call it square anymore, you blockhead. >> that's right. it's called block. >> no mercy today. >> no mercy, man. >> he did get the buy one/get
one. >> notice how he didn't bring up boeing >> just wait until i'm in person with you again one day. >> we hope that's soon. >> you can't give me shingles. i got the shot. >> you can't catch shingles. >> i know, i'm just -- i'm going to get so much -- between you and the doctor i wanted to ask david about glaxo and elliott. it keeps going higher. >> we still have some time. market services for pmi came out. 57.6, we were looking for 57.3 everybody will be watching for the fed minutes this afternoon the ten-year summing off of just 1.65 we'll finish with the dow, down 26, pretty muted d session so r
and for even more value, ask how to get up to a $500 prepaid card. get a great deal for your business with the ready. set. save. sale today. comcast business. powering possibilities. it's time for jim and stop trading. there wasn't a post article saying they were laying off people supply chain issues. while at the stime, people decorated their at-home office let's watch that because it could be a very inexpensive stock. this is not a peloton. this is not peloton. but it has been peloton, which is the new verb. you don't want to get peloton.
right now sale saidforce -- >> i want to get you before we lose you for the hour. some of the home base numbers are suggesting a million plus print for jobs friday. >> if you want a job in this country, you can get one and you can get one in anything. staffing remains incredibly difficult. people are starting to come back i don't think people are as fearful as omicron as the government seems to be >> and we'll see if january is a problem month, given the disruption from absenteeism. if they issue a playbook on balance sheet normalization, are you on watch for a freak out >> i think that's a reasonable thing. i believe jay powell's been moderate and considerate at the same time, the economy is red hot, red hot
>> atlanta fed, 74 i think morgan stanley 75. >> i went to a dollar general and they solicited me for help you interested and the only place i went to on vacation that did not need me was ali's bargains >> it wasn't that they're closed but they're opening at 8:00. >> the ceo told me there's covid issues everywhere. 110,000 restaurants have closed. i continue to believe the economy is fabulous. we talk about when stocks trail.
we're going to dill china in term oafs gdp. president xi is not a friend >> and what about tonight? >> i'm going to discuss larry williams' latest call. we're going back to the wealth he's so good what a fun show today. >> we got a lot done >> we'll see you tonight and this afternoon on the half with the judge. "mad money" 6:00 p.m. eastern. a strong start for financials this year.
we're going to start with sony soaring. sony mobility ink rolling out a prototype at this year's cvs underway ichb vegas. plus, beyond meat moving higher on news that kfc will roll out the fried chicken substitute monday we're going to have more on that later this hours a well. and bank of america updating pfizer from buy to neutral a lot to get to there i r whereifieser is concerned. >> and by the way, the cdc updating the covid isolation guidance megtyrell keeps track of it all for us, meg. >> trying to david the cdc came under a lot of criticism when it shortened the isolation period from five days to ten without a test to exit isolation. dr. fauci, over the weekend, suggested with all the pushback,
the cdc was potentially going to change that. we got the updated guidelines last night and they didn't really change it they did provide some language about testing. but they say if you get a positive test, you should isolate for five days. if you don't have a fever, you can leave isolation but recommend wearing a mask for the following five days. regards to testing, if you can get access to a test, go ahead but it's not required. and if you get a positive, you should continue isolating for another fooivlg days and the cdc providing justification and saying about a third of people, based on modeling from the uk are still contagious after five days they're emphasizing you've got to wear a mask for the five days
after you leave isolation. we of course know that the toll the numbers of cases are taking on the economy we're hearing about a lot of staffing shortages because of the sheer number of cases. more than double from a week ago. today, the cdc advisory committee is meeting to discuss pfizer boosters for twelve to 15 year olds, which the fda cleared on monday. if the cdc adopts that, then parents can make those appointments >> an interesting note on the labor disruption alone meantime, the bank stocks are off to a pretty good start to the year dominic has more on that >> financials were the 3rd best performing sector over the course of the last 12 months the one-year period, second basically to energy and saftd in that regard. the white line
handly out performing the s&p 500. a lot has to do with the notion that many traders and investors are pricing in or execting more moves to the upside of yields. you take a look at the 10-year treasury yield, we have bumped up against the upper end of the range we've seen the last three months about 1.69%. meanwhile, 134 has been the lower bound for the 10-year note yield over the course of the last couple of months. that latest surge helping propel some in the bank sector overall. over the course of that kind of period as of late, look at names like coamerica and people's bank, a regional bank as well. so, they become more interest-rate sensitive.
and three stocks in particular do stand out more. thal parent company of sillicon valley bank. the reason they're important is because according to analysts for estimates, these three companies all have target prices at least 20% higher than they are county right now sidney group, capital one financial and some of the tickers to watch in the coming year they have some of the most potential upside, david. >> db's been a good performer. want to stay with the banks and bring in ceo of kbw. sometimes we have the big bank names. do they offer a better opportunity right now in your opinion? >> so, we think last year was
the year of the universal bank stock and that they were performing better than the typical spread lenders in regional banks and we think there are forces that are absolutely true. but we think the ben ifs's going to be better in the regional banks and the banks more spread dependentant improving loan growth as well as higher rates, taking off some of the pressure of zero interest rates are happening sooner and probably to a larger degree than we anticipated when we upgraded the sector last september. we think this year will be the year of the more spread-dependent banks the regional banks trade at about 69%. the last time the fed went through a rate increasing cycle over nine times and 15 to 18, the relative multiple average
was 91%. our view is the underlying fundamentals with rates and loan growth, probably mean bank earnings estimates are too low and the stocks are still trading at a big valuation gap >> to dig in more on that, over the time the fed is it raising rets, that entire period, the banks are starting to rerate or you expect them to >> i think certainly at the launch period. now, the fed can go too far. and i think the market could get into that dialogue buflt weerb well away from that point. the fact of the matter is we think there's a long way to go for the rate impact to impact income statements of banks we think we could be in for a
pattern of high earnings estimates. and we think real ey good earnings momentum, there was something on a core basis that you hadn't seen. banks out performed last year because they performed well during the recovery trade. it wasn't earnings growth story yet and that's what we're starting to see right now. when we talk about the fourth quarter earnings, which start on friday with jp morgan coming up next week is that we think that's what's going to be talked about. >> tom, it's morgan. how do you balance that against housing and loan growth, given the fact the fed is tapering purchases and you do have the multiple rates expected this
year that presumably could have an impact on the lending activity >> we think the driver is going to be economic growth. and we almost never have the stimulus we just had they were willing to make loans during the pandemic. and that is really a theme for this year is that's all coming to an end. now, the banking industry's going to get a chance to step up and that's what we're hearing from the management and we think the loan growth story is part of a bullish story. it was a positive surprise in the first and think it will be again in the fourth quarter. >> of course, banks are just one piece of the financial sector. and back in 2021, are there
opportunities there too? >> absolutely. you can go to two of the bread and butter, mastercard and visa. they were crushed into lasts year i think we're going to have a lot 06 exciting things to talk about because innovation has got way in front of regulation there's a lot of talk that block chain, bitcoin are going to disrupt the payment space. our view is that over time, the playing field will be level and we think companies like mastercard and visa will continue to be right in the middle of payments whether you're using a stable coin or dollars or handing a dollar to somebody, woo think they're likely to be superior growers.
and they had tax pressure. we're continuing to be bullish on those names >> what about the newer intrnts competing with them? >> i think dynamic that was drievling them the end of last year was disruption and putting visa and mastercard out of business i think the narrative is that the industry's are going to be more like jointed ventures and some of the thintech companies are here to stay but don't think they're going to be here and other payment companies are going to disappear i think companies like master card and visa are taking actions
they're going to work along side of and i tell you growth in the thin tech sector is going to kojt and be strong, i believe, going forward. it's still evolving and i think too early to declare the long-term winners and losers yet. >> thank you >> great to be with you. >> well, as we head to a quick break, here's our road map for therist of the hour. talking everything from inflation to the state of the supply dhan. that name is up more than 200% >> and why goldman could more than double. >> and the batble tween serves is heating up. and weesk got a lot more for you "ua othstet onsqckn e re."
thanks for being with us >> great to be here. thank you. >> so, we've been getting auto sales this week. those are coming in much lower but not because of demand, because of supply, which is what we've been hearing the better part of the year we know that's effected the use said car market as well. what are you seeing right now? would you anticipate we see a rebalancing in general some time soon >> it's complicated question i'll circle back, if it's okay as you said in your opening. we sold our millionth car over the holidays we had our first profitable quarter. and then we got that holiday gift at the end of the year to sell our millionth car and our ninth year in operation and three years after selling our 100,000th car. it was only made possible by all
the people that choose to care every day. i want to thank them for another incredible accomplishment. hopefully many more are yet to come we've been in a strange place for a long time now. coming up on two years in the pandemic and obviously the biggest driver has been oem supply chains continually disrupted by waves of covid we're starting to read that they're getting more normalized and we're running into a huge wave of covid simultaneous ely i think where it comes out is difficult to forecast. we'll continue to watch it hopefully we're in the late innings and head back to normalcy soon. sglrm is omicron having an impact given the fact there is such demand >> i thinking general sk over the last two years, there's a wave of covid, it disrupts
supply chains. you tend to see production decrease and car prices on the new side with maybe a month or two lag from the covid wave. prior to the omicron wave, we were seeing peek prices six weeks ago give or take and that was driven by the previous wave. omicron has taken off very recently we're not yet seeing the impacts of that in the prices of cars or yet really in production of cars i think it's early to say what that impact will be. it's been fairly predictable so far. vehicle prices are very high and it's impacting customer affordability. we'll see how that all plays out. >> to note is a couple of months ago.
you said you reduced the number of vehicles shown to customers in search results, which limited the benefits of higher available inventory on units sold. is that till still the case? >> we've been extremely lucky over time and we've worked really hard to try to build the supply side of the equation to support all that demand. i think that's been the continual story for the last nine years and been more true the last two years we've been in the pandemic we've made a ton of progress we're proud of that and that's driven the milestones we've been hitting. we think it's early in the game for building out the new way of buying a car for customers and we see growth ahead and expect to continue to grow quickly over a long period of time.
>> again, are you still reducing the number of vehicles shown to customers in search results? >> like my longance snr. >> i didn't. i'm sorry. >> we continue to do the best we can to manage demand we're seeing and eventually they're dealing with over the long term. >> that's a complicated question something that's generally true is different people have different preferences. so, there will be people that
shift and many people that choose to stick with internal combustible engines. they'll have a hard time balancing that out i think our job as a retailer is to make sure we've got the product the customers to want and to make sure that we manage our supply chain to ebe optimized in a way to handle the type of prod ktds. we think we're really well positioned for the electric vehicles starting to show up now in real volumes and will continue to show up over the next several years because of the types of customers and because of our processes we're excited about that and preparing for it all the time. i think the oems have the harder questions than we do >> finally, give therein fact the company has been growing so aggressively for a number of years now, since you've created. i want a comment on the "wall
street journal" story from the middle of december that outlines that carvana's growth has had to do with striking new deals with companies controlled by your father, who's also carvana's largest shareholder. perfectly legal but raises questions about potential conflict of interest >> sure. let me say this. as i said at the start, we've been very lucky to enjoy a ton of success over the last nine years and part of that stems from the fact that we started in a great place that put us in a good spot to build something for customers that was completely different. and that included to work with the company my dad was lucky enough to start before carvana was a glimmer in our eye we think they're unambiguously
positive and played a big role drievling success. we have transactions we'll always do those in a way that's in the best interest of our customers and shareholders as well. >> we appreciate you coming on today. thanks for being with us ce, of carvana >> thank you >> two tech names sliding. crm, although the dow is higher isak ting about 100 poinlts off the index.
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plan from a company like humana just might be the answer. fed officials are now openly talking about reducing the nearly $9 trillion balance sheet. hi, steve. >> hey g morning minutes come out at 2:00 p.m. and ought to provide new insight into the fed thinking about reducing the balance sheet after they say the issue was discussed in december.
minneapolis fed president joined the ranks officials saying the $9 trillion balance sheet does have to come down eventually and chris waller wants to start this year and move pretty aggressively the least disrupt vlg would be to stop reinvesting in mortgage-backed securities it would have to keep investing to keep the balance sheet the same and could trim short-term securities a more serious step would be to not reinvest across the board, allowing it to naturally wind down the most extreme out-right selling. only a third of respondents thought the fed would reduce the balance sheet. trouble is no one really is quite sure
even the fed's uncertain bank of america says his models show big part of market gains and our models sung estthe market could decline by 5% in total because of the fed withdrawing asset purchases. that modelriate as 4600 level. that's one reason foed's going to move cautiously like raising rates but the balance sheetd is on the table and a hurdle that awatsz greater clarity from powell and the fed. >> i wonder what you made of the post yesterday where you got a big dove talking about what are relatively acute inflationary concerned and which you expressed it do you think we'll see more of that >> i don't think there's any duvls in the inflation fox
holes, if i can mix a couple of metaphors. what happens is these numbers have turned and you have the first dove to take flight, so to speak, was mary daly and now they're on board for the need for the fed to address this. the question is where we separate hawks and doves is and -- this is fealso going to be something i think chris waller is staking out the extreme hawkish position on the fed people want to hear from ester george later the idea of reducing the balance sheet is one of the more hawkish of the fed >> meantime, walmart making a big bet on the direct to fridge delivery service
here is your cnbc news update at this hour. public schools are closed this morning. they closed after the meeting voted to temporarily transition to the remote learning it accused the union of organizing an illegal work stoppage teachers responded in a zoom call >> we're not part of the union that's trying to stop kids from going to school. all we're asking is that we work in safe and fair conditions. how dare you put on the air waves and in the news media that we're trying to cancel schools before a vote was even taken that's a slap in the face. >> and kazakhstan resignations around 100 police officers have been injured
and says the former soviet state can warn against problems. and rio de janeiro cancelled parties during the annual carnival celebration but samba in a specially built stadium will go ahead. >> well, the delivery wars are heating up with walmart announcing a huge expansion to the in-home delivery service >> and walmart says they'll be able to get the high-tech delivery service, adding major cities like los angeles and chicago. this is a demo of the white glove service. they place items in your refrigerator, or shelves and they sanitize before they leave. it's recorded for security reasons and customers can watch live orders placed by 1:00 a.m., are
delivered by noon the next day and paying 9% more than the average. they service warehouses as they look to increase customer convenience and its own sales. >> they fill their freezers. and there's other added convenience like returns and pick up your return. >> and online grocery delivery market and the quick commerce market that's blurring to delivery as a service. where they're a growing trend. analysts say a plan like this would put a lot of pressure looking to move beyond restaurants and offer more competition for the delivery
service called amazon fresh. >> appreciate that joining us to discuss what it might mean for the stock curious whether you see this as evolutionary or revolutionary on walmart's part >> i would say evolutionary. truly the next step in the grocery wars it's another example of the benefit of the omni channel models where they can be that much cloelser to the customer and makes it easier for them to implement this kind of service the next step in the grocery wars that have been going on the last couple of years >> how much is material to the stock? >> i think over time, it's something that could roll out throughout the country obviously, significantly increase from 30 million that
they talked about today. take things slow and make sure they work and they roll them out. and we don't see it as overly material going to the online customer and trying to increase their value add services to fight back against the online only models way back when when they've been using the assets to fight back i think this is just another step in that >> what does this do to margins? we know the focus that investors have been placing on those spreads. what does this do to that tleesz going forward?
>> that helps mitigate some of the impact in general, we think it's to add the value high services. think about walmart. and thing about the advertising bds and that can help offset some of the margin pressure we're going to see in the near term from things like fresh food and inflation that walmart is trying to keep prices lower for customers. >> you know, overall, they did transform to a digital business too, a certain extent. what grade do you give them in terms of how they execute said on what's been a substantial investment for them? >> i'd give them a grade, an a-minus. minus because they were late to
the game 10 years ago, however many years ago. a lot of the traditional retailers are in denial about the online opportunity as amazon got bigger, they started to go down the road of omni channel took years to test it out and work they convinced to be aggressive about it and i think they've done a great job. >> you can recall episodes where stocks kind of freak out on the heels of the vestment announcement you haven't really seen that in this roll out. it is evolutionary >> it's been a low market multiple earnings have grown. the stock hasn't moved and we think it's a good value here
we think it makes sense to own the stock given the valution, what we think is a great long-term strategy >> michael baker >> we're going to stay with this space. and just eat take away down double digits joining us is senior analyst great to have you on i realize you don't cover walmart but the fact we're seeing the expansion in delivery more focussed on things like at-home grocery delivery with the news today how does it speak to how the landscape is growing and evolving in general right now? >> we saw recent consumer survey where 13% of a response and they order online delivery exclusively or often
so, this is a $1 trillion increasingly moving online and we think door dash and uber are going after the opportunities. all these companies moving there tells you this is happening now and i think this is going to be a big story we talk about in 2022 >> yeah, uber and doordash are trading like tech and other growth names right now are these buying opportunities at these levels? or do they have further to fall? we think so. the revenue multiple is retraced high single digits last year and i think one of the reasons this flip over in the calendar is important for uber is as the
year goes on, we're actually get nothing creased confidence in profitability from going negtive to break even. now we're looking at positive this year. if you value thucompany for sengss expectations, it's only trading 30 times and that's a off multiple stakes. the reason airbnb is supporting such a high revenue valuation in the hethy double digits is because they have 25% mark we don't expect uber to get there anytime soon but shows the market right now is rewarding the profitability angle, which we feel better now this time verses last year and it's trading at a discount >> do we know how omicron is
effecting the names in the current quarter? >> when he spoke in the middle of december, he said they had their best week ever in the middle of the pandemic so, that's thebust thing we have to go off of i would say one of the takeaways we expeck from the pandemic or the increase in delivery and we think that's going to be sticky. we've done a vuvariety of consumer surveys from the consumer standpoint and the products are getting better, more vertical. i think increasingly delivery is going to move to subscription. and i think doordash and uber are in a really good position. >> you know, one of the arguments we hear is the idea they can sustain these fees long
term is vulnerable you think that's valid >> in the survey i mentioned earlier where 13% are currently doing groegsry online either exclusively or often the main reason is because people don't have enough time. it's the same thing with delivery you could go pick it up yourself with people willing to spend on the added convenience. rirtds highlighted more so in grocery because you're not spending an hour so, the time saving is real and the other thing is about 25 or 30% of respondents enjoy grocery shopping people are going to say they don't want to necessarily go out and waste their time doing it and willing to pay for it. >> thanks for joining us today >> thanks for having me.
to fruition. as you look at prices right now, 46,000 and change. that would imply more than doubling of current values to get to that level. and remember, we pushed up around the $59,000 level we've fallen about 33% so, what exactly are some of the assumptions that go into the geldman possibility of $100,000 for bitcoin? >> they're looking at the sov market that means they're looking at gold and bitcoin in particular as the two options they could use as a quote/unquote store of value. they're saying the gold market holds around 80% of the value market and bitcoin around 20%. what happens if, the big if, if bitcoin gets to around a 50% market cher and rivals gold?
if that were to happen you could see that $100,000 per bit coin level the realishi is whether or not bitcoin as a store value has to compete with anyone out there. is there a story where it's not just about bitcoin right now it's the kriptdocurrency that many look to if you look at etherium, ether not even in the same ball park but deutsche on the mean side as well in many ways, carl, by making a move of bit coin hitting a 100,000, not like some of the hyperbig moves we've seen over the course of the last five, 7, even ten years
>> we did see some year-end targets for 100 k that later got revised lower. at the top of the hour, it's consumer check week, as you know, on tech check. it's all coming up in about ten minutes. in ten minutes. meantime, markets a bit of a meandering session and dow up 114 despite the drag from salesforce any close positive would be another record close. ayitus ♪ ♪ ♪ digital transformation has failed to take off. because it hasn't removed
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by a kohler-certified installer. and it's made by kohler- america's leading plumbing brand. we need this bath. yes. yes you do. a kohler walk-in bath provides independence with peace of mind. call... for fifteen hundred dollars off your kohler walk-in bath. visit kohlerwalkinbath.com for more info. as we head to break, take a look at shares of at&t the stock is up nicely of course, last year was not a good year and you can see it is still down about 9%. but this morning in front of an investment conference it was reporting at, at&t reported fourth quarter 2021 ads of 3.3 million that did exceed analyst estimates and fiber net ads was okay, but also hbo max subs at
73.8 million which did seem to exceed some consensus estimates. all of which adding up, as you see, to quite a nice move to a stock that did suffer for much of last year the deal to sell warner, i should say spin warner into discovery only a couple, three months away stmo likely from completion we'll be right back. you're a one-man stitchwork master. but your staffing plan needs to go up a size. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire
welcome back to "squawk on the street." beyond meat shares are moving higher in today's trade after it announced a new partnership with kfc. that is news that kate rogers actually broke last night. she has more details for us right now. hi, kate >> hey, morgan kfc is going to be rolling out beyond meat fried chicken breasts starting next monday this comes after several years of tests that were successful for the two brands it will be available for a limited time in nearly 4,000 kfc locations. u.s. president who both expressed confidence about the upcoming launch, particularly the texture mimicking of a chicken product that is plant based. take a listen. >> we didn't want to just provide another form of chicken to the market, what we wanted to do is get that muscle structure right so when people bit into
the product, it has that whole muscle tissue experience for them that they would get with chicken breasts. >> nearly a year ago, beyond announced a formal partnership with yum brands to make exclusive meat substitutes for kfc and pizza hut and brought two tyson execs and chief supply officer roles pointing to changing consumer preferences and also good timing in january for this anticipated product launch >> 90% of the customers that are buying, you know, beyond and the plant-based proteins also eat meat they are using it as a way to reduce animal proteins in their diet we think it's bigger than just a trend. >> chipotle added a plant-based chorizo on mondays not a trend looking across the space right now. back over to you guys. >> key question, kate, and something investors have been focused on, can beyond meat ramp
supply enough to keep up with potential demand here? >> that's a great question if you look back to this initial partnership with kfc over the last few years, the supply sold out in about five hours in one of the initial launches. i asked both of the executives about that yesterday and they both really expressed confidence and they said this is not a new partnership. we have been working together for several years and we have this down and we are ready to go launch is next monday and we'll see what consumers have to say and how supply holds up. before we head to "techcheck" want to look at some of the automakers. investors who are becoming shareholders interesting diversion there of, obviously, tesla, some $1.15 trillion ford, though, closing in on $100 billion market value but, morgan, lucid and rivian, obviously, two new companies and both suffering so far this year in the stock market.
>> that's right. also that's up about 5.5%, too ev very much in focus, david >> we'll keep watching shares of ford, fascinating given that 18% move in just two plus trading days that will do it for us on "squawk on the street. "techcheck" starts now. good wednesday morning, welcome to "techcheck. i'm carl quintanilla with deidre bosa coming off the worst day since mid december fintechand cloud are some of the hardest hit sectors. china stocks haven't favored much