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tv   The Exchange  CNBC  March 9, 2022 1:00pm-2:00pm EST

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i believe in it. >> union pacific i think stephanie was talking about this yesterday if we're going to keep doing the supply chain on shoring, there's going to need to be transportation of materials and goods. >> you guys are feeling the same vibe she bought that. i appreciate it. what an hour stocks ripping "the exchange" is now. thank you very much, scott n high everybody i'm kelly evans. we have a huge rebound on our hands. our stocks are way up, even prior to this european stocks like in germany. crypto is surging. rates are higher and commodities are finally taking a breather. wait until you see oil is this just a counter trend consolidation day are we entering a new phase for the market bitcoin is jumping 10% after president biden signed an executive order on crypto currencies we'll look at why the industry is so excited about crypto going more mainstream or dare we say,
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tread. and with prices soaring, looking to venezuela for supply relief should the u.s. move in that direction or not we'll get to all of that let's start with this rally. we were up 808 >> what a rally. it was massive 800-point rally for the dow. to put it in broader context, because a lot of folks like to look at the s&p 500 as the broader measure. at the highs of the session, which were close to right now, we're up 114 points. we were up 121 ca didn't happen that long ago. we were up 53 at the opening bell that was the low of the session so far so 42 .84 the last level on the s&p 500. tilted toward the up side. 2 .5% giens overall. that triggered, but i'm not going to let that deter me let's talk about the trades working own not working. what was working before is not working today. crude prices down to $111 per barrel we were in the $130. ten-year treasury notes are falling in price which means you
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have yields ticking to 1.19% the safety trade coming off there. and then gold futures down 2 .5%. below 2000 again, the reversal, we'll see how it lasts and then some of the biggest bounces that we are seeing in the marketplace over the course of the last couple days have come from stocks that have been in maybe medium we'll call it to longer-term down trends. specifically brand names that you know of in tech adjacent industries paypal holdings up 5%. we know how bad it's been for fin tech companies nvidia, medium side down trend it's up 6% today netflix up 5.5%. and metaplatforms, formerly known as facebook up 3%. we're seeing a bit of the buy the dip mentality. whether or not it's deep value or whether or not it's short covering remains to be seen. however, those names, deeper down trends, you can see they're
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catching a bid today >> dom, thank you very much. let's get more on this huge reversal playing out in oil right now. wti crude went as low as $103 a barrel it's up at $111 right now. that's a 10 % drop it's almost a 20% plunge earlier this week it crossed above $130 a barrel. that was a 13-year high. we got headlines the uae ambassador to washington is saying they're in favor of production increases joining me is the founding partner of again capital and a cnbc contributor john, a trifecta we have the headlines from the uae. reports that iraq may try to add barrels and broader reports about ukraine possibly looking to some compromises here talk to me about the implications that you see driving these crazy swings in crude that we're seeing. >> well, that $130 price point, kelly, was factoring in the siege mentality in the oil
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market where we were staring down potentially losing oil russian outpeck. and the ukraine situation wors worsening. we've reversed it to a degree. i don't want to get ahead of ourselves. but clearly the market took the uae comments as opec blinking here in terms of not putting more oil on the market again >> so let's talk about the sequence here. a lot of people have been paying opec is the only -- if we lose, let's say i don't know 2 million, 3 million barrels a day of russian supply, opec could supply 2 or so million as i understand it, they were waiting to see what happens with the iran agreement first does this suggest they might be willing -- we haven't heard from the saudis yet, but they might be willing to move more quickly? >> yes the short answer is yes. but there's a catch to this uae story. apparently they are insisting the iranian irgc be kept as a designated terrorist organization right now that is not in the
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nuclear deal as a matter of fact, that designation gets removed right now as part of the iran nuclear deal so again, a lot of moving parts here but again, i said this the other day to becky, there was about $30 of air in the price when we were factoring in and pricing in the worst case scenario with potentially more to come again, these several elements here today changes that calculus right quick. >> a reminder if you're buying in, there are some air pockets depending on how the ukraine war and the supply situation plays out. the flip side which goldman and others keep pounding the table on is saying there's no spare capacity in the world. that the bullish argument for crude from here, and they've said even if opec steps up, they see 115 to 175 this year was the market is tight and was tight going into this conflict what would you say about that? >> i disagree that it's that tight. we were pressing on 90 a barrel before this crisis hit
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i think that was justified to a degree but there is more supply coming. the saudis have 2.5 billion barrels of spare capacity. and the uae does kuwait, the iraqis and we've been dealing with the problem in libya over the past several years where their oil fields have been mostly off and not on, but they can quickly come back on so i think short of a full embargo by russia itself, on selling its oil and by that i mean to china, which drives china into the global market, i think the levels we saw prior to the ukraine war are where we were beginning to top out at plus we're going into a shoulder demand season right now. the spring, northern hemisphere is spring before the summer comes. it's a time when we generally see some restocking of global inventories, refineries going to maintenance, and the pressure on the demand for oil comes off the boil for a little while. >> words of caution. thank you so much for your time,
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especially on short notice today. we appreciate it >> thank you here's the broader markets they're liking that drop in oil prices we are up 808 at the highs we're up 715 today yesterday we were worried about recession risk today it's a different story even prior to the headlines we were just discussing the job openings data this morning. a fresh record high with revised data to december openings came down only slightly in january to 11.2 million bond yields surging. the two-year yield over a one-year high. 1 166. ten-year, 192. jeffrey gunlock saying in the past 24 hours inflation could surge to 10% pushing the fed to move more aggressively my next guest is looking to buy assets and bonds saying u.s. assets are on sale for the first time in a long time co-chief investment strategist is with us you see opportunity here >> we do, and kelly, i certainly
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wish we had done this interview yesterday when i wrote that. clearly stocks are ripping higher today but look, we started the year with the s&p 500 trading at around 21.5 times forward earnings, and we've seen that come down again to about 18 times forward earnings so we're seeing this environment in which this negative price pressure has been driven by a couple of key elements which are quite obvious, i think the fed's start of the tightening cycle as well as this russia/ukraine crisis. the bottom line is the fundamental backdrop for stocks is still there so we look at things like next 12-month earnings growth and analysts on the street are continuing to pencil in better earnings growth prospects here in the u.s. while we're seeing that price pressure come down. so that's resulting in this resetting where the fundamentals are there. across bonds, you're seeing now 3.5 to 5% across corporate bonds and the triple b and the double b space. that was more like 2 % to 4 %
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last year. there's better opportunities opening up right now both in u.s. stocks and bonds. frankly, they don't go on sale all that often >> and so you gave us examples of where you're looking in the corporate bond space in the stock market you do like the industrials here now, would you play that with specific names can people feel comfortable with sort of basket etfs? >> yeah. industrials have been an overweight for us for some time here and really, what we're looking at is the great relative earnings growth prospects. so the industrial sector has the second highest earnings estimates right behind energy now for 2022 it has the great quality metrics we like. good balance sheets. good stability as far as earnings good cash flow and we're seeing also that cyclical element in industrials. so they are a value sector a cyclical sector. it actually doesn't need a steeper yield curve to exhibit market leadership.
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we're clearly seeing that flattening yield curve environment play out another element added to the mix in terms of a tail wind for the industrial sector is the fact that it is a big part of the commodity complex, and in our view here, the u.s. is really going to need to step up as far as investment in areas like energy infrastructure, areas like farmland. even areas like defense. the industrial sector is really part of that eco system. we think it will play a big role as the investment plays out to continue to meet this elevated demand and fill the gap we now have based on russia/ukraine >> i see you like names like caterpillar and deere. thank you so much. emily roland with john hancock investment management. an auction of ten-year notes with the interest rate environment as it is right now, let's see how that went over rick santelli has the results at the cme. >> reporter: rather average. rather mediocre. i gave it a charlie minus. what we had was 34 billion
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ten-year notes actually 11-month is a reopening. the 1.92 yield was a smidge higher than the issue market at 1.917. higher yield, lower price. a pricing, a bit off on the grade. all the metrics were roughly average. the only one that stood out just a bit was direct bidders that's like mutual funds that could put the bids right into the auction process that at 18% was the best since june of last year. but as i said, rather mediocre a lot of reasons why we have a big jumbo at&t discovery issue that looks to be pricing sometime this afternoon. the size somewhere between 27 and 30 billion maybe the top five or six large e deals. there's competition for investor dollars and let's be honest. there's been a lot of volatility many of my sources thought yesterday was the big blow off top and a lot of commodity markets. but you got to put your money
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where your mouth is and it seemings as though investors were gun shy on today's tens tomorrow we finish up 10 $2 billion in supply with 30-year bonds. we'll see how the longest maturity fairs tomorrow. >> thank you, rick santelli. meantime, president biden signing an executive order today aiming to clarify regulation of the crypto space take a look at these moves bitcoin is up nearly 10 %. athere yum up about 7% most of the crypto landscape is higher six areas of focus for regulators including investor protection, rules around illicit activity and the possibility of a digital bank currency. it's not looking to leave crypto or leave it in regulatory limbo forever. this seems to have a lot of -- shall we say a lot of relief among the crypto community >> definitely. as much as the crypto community agrees about anything, there seems to be a pretty bullish
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sentiment about this executive order, even though there is no regulation in this executive order. it's not saying crypto should be regulated any particular way it's basically saying that we need a government-wide approach to studying the risks and benefits of crypto it's seen as a step forward because as you said, it kind of acknowledges that crypto is here to stay. the facts sheet that introduced the executive order talked about some 40 million americans that have invested, used or traded in crypto currencies. so yeah, exactly the united states is not banning crypto it's trying to work with it. and also it's suggesting a more coordinated approach across the u.s. government. it's really not been the case in the past the u.s. crypto policy is widely seen as confusing and siloed and so this is an attempt to at least get all these different agencies in sync as you know, financial markets don't really like confusion and uncertainty. i think that's a big part of what's making people feel bullish at the current moment. >> is there any early adopters
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who kind of bristle at the way it's gone mainstream we have the institutional -- when pension funds are buying bitcoin, you wonder if it's come far afield from the original intent, but i think a lot of people trading it would appreciate the regulatory clarity. >> yeah. you know, that ship has sailed if you look at so much of the head winds of 2021, so much was institutional investments. so yeah, it's kind of this inherent paradox of bitcoin. it's supposed to be a rebellious, you know, anti-wall street, but wall street could make the price go up institutional investment is really a big part of this story. >> do you think it's the main part now final observation. i don't really see a lot of the kind of chatter about cryptos at all like what we saw last year just among the general public. so has this ownership morphed from obviously the retail early ownership will maintain what they have, but has it morphed into more of an institutional story at this point?
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>> well, if you look at the data, i think coin base said it was over a trillion dollars in institutional investment in 2021 that was more than individual investment on the one hand, yes but there's still -- again, there's this figure that was in the fact sheet for the executive order about 40 million americans investing in crypto. i think they said some 16 % of adults, americans are involved with crypto in some way. and then as you know all the crypto stories happening all over the world like ukraine raising some over $60 million in crypto currency. right? i don't think that's an institutional investment story so there's just so many different angles to this but it's a big part of it. >> and coin base investors relieved 11% pop in the shares. emily, great to have you on. thank you for your time. >> thank you emily parker a programming note don't forget to tune in at 6:00 p.m. eastern for a cnbc special. it's crypto night in america once again they'll have a lot more details on these announcements today coming up, crude oil continuing its sharp reversal. maybe we could call it a plunge
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now after the u.s. ban on russian energy there's a look at the latest trades down to about 111, the low was 10 3 earlier on. can american producers step up and fill the supply gap? we'll ask the head of the country's key energy we'll go live to washington for a rare and exclusive interview with the secretary of the navy we'll get his thoughts on russia's war with ukraine, the other global threats he's watching, and the budget for defense spending that's next. as we head to break, here's a quick check on markets dow is up 8 08 at the highs. h the nasdaq up 3.5% we're back in a moment
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welcome back to "the exchange". defense stocks are pulling back. lockheed, general dynamics, all off by 7 to 10% from the record highs posted two days ago. but will rising tensions provide a long-term boost for the group and what's the outlook for defense spending for the u.s. and our allies now morgan brennan is in washington with the secretary of the navy morgan >> reporter: kelly, thank you so much, and yes, i am joined by the secretary of the u.s. navy thank you so much for joining us
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today. >> thank you for having me here today and to all our viewers on "the exchange" this afternoon. >> reporter: i want to start with russia/ukraine and the events unfolding realtime. this is largely seen as a land based conflict as it currently exists how is the navy supporting the region >> we have the harry s. truman with the battle group and additional vessels deployed to the mediterranean to prevent the worst from happening and to keep an eye on the russian fleet and everything else that's going on in addition to what's happening on the ground as well. >> reporter: from your vantage point, how would you assess the situation? >> it's tragic it's concerning. the invasion of ukraine is a violation of human rights. it's a violation of ukrainian people and the suffering that putin has put them under is really significant and as a cuban refugee myself who left a communist country, this is personally painful to see this unfold, and one would
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hope that in the remaining days and weeks that perhaps we can come to a diplomatic solution that would play well for the people of ukraine. >> reporter: i'm going to ask you the same question i asked the secretary of the army earlier today on the network that is, do we know yet how this ends >> i don't think we do, unfortunately. some of it relies on the actions that president putin will take over the course of the next few days and weeks and perhaps even months it's difficult one would hope putin would come to his senses and try to achieve a more diplomatic solution to the challenge he faces ahead of him. >> reporter: so one of the things you talked about at the conference is the fact that the key purpose of the navy is to ensure the safe and secure passage of commerce on global waterways nchls we're seeing sanctions and trade flows potentially interrupted or diverted right now how does this affect that process? >> well, that's incredibly important. for as long as we've had a navy, the navy's chief responsibilities is ensure that
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the free lanes of communication stay open for global trade around the world and so much of our economy depends on that free exchange of trade on the oceans themselves and under the oceans through fiberoptic cables. it's important that we maintain that stability and the navy plays a very important role in that >> and we're talking about russia and ukraine and certainly the conflict that is forefront right now. but another thing that is emerging from this conference, and that you spoke about in your remarks here too is the fact that yes, russia is an issue russia is a threat, but longer term, china remains perhaps the larger threat. the so-called pacing challenge >> that's exactly right. and china very much is the pacing threat. and certainly the threat that they present in terms of their desires, with regard to taiwan is equally important to the future stability of not just the united states' economy, taiwan is our ninth largest trading
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partner. but i would argue the entire global economy as you all know apart from the moral aspect of being able to preserve democracy in taiwan, the fact that if we were to lose taiwan, 91% of the chips globally are made in taiwan it presents a threat to our global economy in so many ways for that, many of the reasons, china is the threat we face. >> can the navy deter a potential invasion of taiwan by china? >> i believe we can. we're modernizing our navy in many ways and our submarines and surface fleet and our unmanned technology these are major investments we're making to deter china in every way from trying to do what it wants >> and that brings us to defense spending and the idea of priorities around modernization. how are you bat lancing the long-term priorities versus the near-term needs? >> absolutely. i often say that -- it depends
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on capacity and modernization. it has to be done in balance there's the need to have the appropriate capacity to meet the day today critical missions in addition to being able to modernize and better defend against our adversaries in the future it's a delicate balance. we need both capacity and modernization in order to achieve the type of lethality we need to deter aggressors in the future >> reporter: what is it going to take realize a robust navy from a dollar standpoint? >> absolutely. so this is an issue that our president department of the navy is focussed on i feel confident over the next months and years the proper investments will be made in the team to ensure that we have the readiness needed, the capacity needed, and the modernization necessary to be able to fulfill our mission. >> all right
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well, secretary, thank you so much for joining us today. >> thank you it's been wonderful being with you today. >> appreciate your insights. secretary of the u.s. navy kelly, back to you >> morgan, thank you morgan brennan reporting all day long in fact, next hour stay tuned. you'll catch our exclusive interview with the air force chief of staff around 2 p.m. eastern time still ahead, cyber security stocks are sliding you have the first trust nasdaq cyber etf, 14%, 13% off the recent high. it's also on pace for the first negative quarter in a year we'll take a closer look at the group and the names under pressure plus utilities trying to find a spark after snapping their longest winning streak of the year we'll give you high dividend names to considering if you're trying to protect your portfolio. as we head to break, look at the dow heat map with salesforce, nike and amexleading the way. chevron the laarggd.
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welcome back to "the exchange". we're just off session highs the dow is 7:808 at the peak the nasdaq with a 3.5% gain. financials outperforming alongside tech you can see the gains of 4.5% in financials because we've seen a rebound in bond yields biggest laggard, energy, down almost 4%. phillips 66, schlumberger, marathon oil, some of the worst performers phillips 66 down oil and gas best performers in the market this year with occidental nearly doubling and halliburton up more than 50%
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oil isn't the only commodity reversing today. cold, copper, silver and wheat are seeing declines. wheat still up 50% this year let's check on the dating apps match group is leading the s&p but all the buzz today is about bumble, up 46% after reporting a surprise profit and giving strong guidance in its results analysts were expecting a break even quarter the stock down about 8 % on march. on pace for the fifth straight monthly loss the shares down 70 % from the all-time high on the day they went public. now for a news update. here's what's happening. opening statements in the trial of four men charged with plotting to kidnap the michigan governor they recruited a militia and planned to break into her home because they were angry about pandemic restrictions. one defense lawyer says his client was influenced by an fbi informant and not the master mind of a kidnapping scheme.
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florida more protests against the bill to restrict the discussion of sexual orientation in primary schools at a high school in weston hundreds of students walked out of classes this morning. to demonstrate about the so-called don't say gay bill and one of the most sought after shipwrecks has been found in water nearly 10,000 feet deep the endurance was the ship of iconic explorer. the legend gar failed expedition to the south pole. he became a hero for leading his crew back to safety after their ship sunk. and on the news tonight, a look at the remarkable hunt for the endurance and what it took to find it that's tonight at 7 eastern. i imagine it took a lot of endurance to find the endurance. >> that's a cool story my mom was following along there was a book i think in recent years hugely popularized. cool they found the ship thank you very much. still ahead, oil plunging today as investors weigh the ban on russian oil and gas imports
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we'll check in with the korea of the large -- ceo of the largest oil and gas in the u.s plus what the long-term impact of turning to venezuela for oil could be and the staples sector higher today some names underperforming phillip morris and tyson all down 10% or more from the recent highs. we're back in a moment what the world needs now... is people. people who see energy a little bit differently. where a switch to cleaner power means a more resilient grid... ...with renewables and gas power providing energy whenever it's needed. because seeing a more sustainable world isn't far in the future. we're building it... now. ge. building a world that works. at ameriprise financial, our advice is personalized. based on your goals, whatever they may be.
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all that planning has paid off. looks like you can make this work. we can make this work. and the feeling of confidence that comes from our advice? i can make this work. that seems to be universal. i can make this work. i can make this work. no wonder more than 9 out of 10 clients are likely to recommend us. because advice worth listening to is advice worth talking about. ameriprise financial. i'm mark is advicand i live inng about. vero beach, florida. my wife and i have three children. ruthann and i like to hike. we eat healthy. we exercise. i noticed i wasn't as sharp as i used to be. my wife introduced me to prevagen and so i said "yeah, i'll try it out." i noticed that i felt sharper, i felt like i was able to respond to things quicker. and i thought, yeah, it works for me. prevagen. healthier brain. better life.
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welcome back crude oil prices plunging today from 13-year highs they're up around 18% since russia's invasion of ukraine began last month president biden officially banning all imports of russian energy products to put pressure on moscow. port of corpus christie ceo is here to discuss how the u.s. or other suppliers can fill the gap. his port is number one gateway for the u.s. and danielle asooreo with us on the possibility of turning to venezuela for more supply in this environment shawn, can you speak to the change in activity you've seen over the past couple weeks
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>> we've certainly seen an increase in volume a lot of that volume is now moving to the european theater year over year we're up over 14%. not only a factor of the markets. but it's also a factor of the sanctions that have been placed on russia which now are a robust response for us and our allies >> are we at capacity in terms of how much liquefied natural gas we can export? >> we're certainly at liquefying capacity but not production capacity we need to have great bipartisan support from congress. certainly from the administration, and the regulatory agencies to be able to produce more of that energy, move that energy to the coast, process it, and ultimately ship it to our allies >> what do you mean we're at liquefy kags capacity? >> so actually creating liquefied natural gas is capital
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intensive. we have great natural gas reserves over 100 years of proven reserves, but getting that gas to the coast where it then has to be liquefied, having the permits issued by the federal government to be able to move those molecules to the coast, liquefy it and get it onto ships krrk that takes tremendous capital and infrastructure, and right now we're mired down in permitting bureaucracy. we need to move that -- remove that bureaucratic mud off our boots so we can get the liquefy facilities built and expanded. just this week there was an announcement that there's a phase three in corpus christi adding another 11 million tons that will not yield results until probably closer to 2025. >> if i'm understanding, basically we're at capacity for what we currently have at the port cheniere is looking to add
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capacity and we could continue to grow that what about on the oil side what are you experiencing there? >> crude oil is a different story. we've built tremendous capacity to be able to export more crude oil to our allies and our partners we've spent billions of dollars between the states in texas and louisiana over the last five years to promote more exports of american oil today the port of corpus christie enjoys about a 60% market share in crude oil exports and we're operating at 55% capacity in the crude oil space. we've got plenty of free board the problem is the production fields we've got to drill more. we've got to produce more. and we've got to move those barrels to the coast where they can be loaded with the larger vessels to our allies and partners >> i don't know if you can speak to the quality, but it does seem as though the types of oil that we are exporting matter versus the find we might import and be
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a better fit for refiners. especially as we're looking at banning russian crude, some of the dirtiest, so to speak, crude in the world how is the quality affecting what we're both exporting and importing into the country >> that's a great question so west texas intermediate, that's really a light barrel that's what we call a light barrel that's a preferred barrel in the european continents and some of the asian markets. and certainly in some of the markets here in the united states gulf refiners have been tooled to handle the heavier kruds, kruds coming from canada and venezuela, mexico for sure and we're seeing a retooling of many of those refineries to be able to take full advantage of the abundance that we have now in texas and crude oils. but those retoolings also take a tremendous amount of capital and take a tremendous amount of time so you're going to see likely a transition away from some of these dirtier, as you mentioned,
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these heavier crudes into some of those lighter, sweeter crudes but that's going to take capital. there has been a flight of cap can tall not only from the upstream sector but certainly the downstream refining sector as well. >> fascinating and the oil swings don't do much to help people get comfortable about making long-term commitment to the space. thank you for your granularity today. >> thank you >> port of corpus christi ceo in texas. jthe u.s. looks for alternative oil suppliers, the president is reportedly considering lifting the trump era sanctions on venezuela let's bring in the president of andy and capital advisers which manages money, advises money managers in latin america. daniel, it's great to see you. what's the long-term significance of the warming of relations between the u.s. and venezuela? >> good afternoon.
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incredibly controversial considering what's happened in ukraine and russia, stomping russian imports of energy into western europe, into the united states that oil has to be made up from somewhere else is venezuela a possible candidate? more from the middle east? more from canada and colombia? now, controversially, venezuela has had terrible ties with the united states and with the neighbors, colombia and brazil they used to produce 3.5 million barrels a day. now they're about 700,000 barrels. i expect if some investment, the production could double in two years. we have to make a decision in the west are we willing to reengage to make up oil we're losing from what's happening in ukraine? >> and arguccording to analysts venezuela is only going to had after a million barrels a day this year and next year. a drop in the bucket compared to the 3 million barrels we could
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lose from russia or started to lose i always thought of venezuela as kind of a russian ally or someone who usually enjoys warmer relations with that country. am i wrong about that? >> not at all. russia has a strange roll rolex of friends they're close active commercial ties with the chinese. they're close to south florida and were always close ties they've gone the wrong way in the last 10 to have 12 years >> it seems strange we would be warming relations with somebody who has traditionally helped russia right? >> yes i think stresful times call for controversial measures i think reengaging with venezuela is being considered as you said at the top. two americans were released by the venezuelans yesterday.
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that show of good will means something. that means there is dialogue and communication and there could potentially be a lifting of sanctions on venezuela and venezuela oil with high viscosity coming back into the u.s. >> could this be a way to try to bring venezuela back into the u.s. sphere of influence, or orbit? is that a possible up side here or do you think that's a pipe dream? >> i mean, we've had financial sanctions on so many countries with the idea of enacting regime change and that strategy hasn't failed. yemen, syria, iran, cuba, north korea, venezuela nicaragua. so maybe we do open up maybe we start trading again and have the free market topple these regimes and not our stick policy of trying to strangulate them financially >> this illustrates the geo
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political tight rope we're trying to walk to keep oil prices from spiking further. great to have you. thank you for your time. >> thanks. good to see you. >> daniel with andy and capital adv advisers amid the volatility, ib ves or thes fled to youutilities asa safe haven nearly every member of the s&p index. we'll dig through the names to find some standouts that offer high yields and steady growth. we're back in a moment (vo) verizon is going ultra!
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welcome back, everybody. utilities are taking a breather after being one of the best performing sectors over the past week dom is here to dig through the names and some of the places offering the best yield now. >> how about the second best performing sector in the entire s&p 500, yes, it's in negative territory but only down by 2 % that makes it the second best performer after just energy. we know how gang busters energy has been
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when it comes to the utilities sector, the outperformance over the broader market in times of stress really highlights some of the defensive nature of this particular sector. and the dividend yields that come along with it many times investors look toward the dividend payments when it comes to utilities they're viewed as safer, less volatile the in times of market stress we look at the s&p 500 utility sector 29 stocks there. look for everyone with a dividend yield above 3%. the sectors yield is a notch below 3% among those, dh of them still have positive year today performance? most of the sector is doing well right now. the three best ones in terms of yields fitting those criteria are pinnacle west, 4 .6 dividends there. duke energy 3 .7, and on ed son 4% when it comes to the overall picture of why utilities are important, they are maybe arguably the least consequential sector of all of the s&p 500 it's basically a dead heat
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between materials, real estate, and utilities as the three smallest sectors in the s&p 500, but in times of market stress, people pay a lot of attention to them and those dividend yields >> investors may be warming up to all three still ahead, sticking with the safety theme 2022 has been a rough year from muni bonds citi says we've moved past peak pain whether you should be seeking elr er nt.shtethe,ex
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welcome back to "the exchange." with the anticipated fed rate hike a week away and the market volatility investors seeking safety plays but muni bonds have been an understood performer this year. my next guest says the fed could be creating an attractive entry point. joining me is jamie from new burger newman. let's say how bad it's been. >> it's been a really tough start to the year. january was one of the worst total return months that we have seen in the market but with that in our view comes opportunity.
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the market reset itself in a significant way. we think investors should be thinking about deploying capital. we are right now. >> i think they dropped 2.5% people are experiencing the declines in the stock market doesn't sound so that bad but why is the asset class under pressure >> what you don't want to see is the muni markets to sell off from liquidity reasons what you have is as you said people expect the fed to raise rates. treasury rates have been moving higher but this reset has really made valuations attractive. just this week california is in the market with a large geo deal they have huge surpluses and you can buy the bonds in ten years
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at a yield around 2% that's pretax better than the yield on the u.s. treasury we are looking at that deal and getting involved. >> when you are buying them for a ten-year hiorizon we could se them underperform for a period of time. do you think that people should pocket a decent total return >> i think they will when you get backups like this you put money to work. we also talk to clients all the time and advise them think about the muni bond allocations not as a trade but in it for preservation if you don't good bonds you get to a really good destination in this asset class. >> the elephant in the room is inflation.
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for people who are concerned about keeping up with inflation and tomorrow morning could be in the 8% range if getting 5% after tax return isn't good enough for them, what do you say to people who say i don't know why to hang on to an asset that will underperform inflation. >> you have to invest with a framework. keep the asset short have a lot of bonds due in one to five years. if the scenario plays out you have a lot of bonds coming due to redeploy back into the market the other thing is focus on quality. you are getting a competitive return on high quality munis unlike 2021. so play it safe. keep it short. i think if investors do that they can get a competitive
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return >> great points. jamie, thank you so much >> thank you. up next, this etf is down 5% over the past week despite the ukraine war triggering high hdis. for theolng we have the name and what's behind the sell-off after this break.
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welcome back don't be fooled by the green the cyber sector is down for the week kristina partsinevelos joins me now to dig into the numbers. >> we know malicious cyber attacks are on the rise. department of homeland security warns u.s. companies to face threats at different levels. almost every company is talking about it i listened to a qualcomm shareholder meeting and brought that up and the projections could reach $250 billion by
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2025 but despite these geopolitical tensions several big names are trending down over the past week fortinet up today after plunging yesterday. but in the past week off 17% compared to s&p 500. other names now on the screen. other names in the sector down like crowdstrike, sentinelone and then larger swings zscaler off 44% which is quite a dramatic drop and the individual constituents are worse off this past week compared to the etfs that track the names those aren't down as much right now and trying to look for a bright side and crowdstrike comes out after the bell
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three separate analysts, rbc cut on the company the xen is expected to lose money in 2024 and if you wonder the drops this past week is no company specific news but the tensions play a role with technology and when technology is weaker cyber falls into that trend. >> we are reminded with oil today if there's an improvement in the situation the price can plunge, maybe with cyber, too. people wonder if it's a little bit of a scramble to protect themselves right now. >> i actually don't think it's going to be something to disappear. we have data to prove it i was looking at verizon they put out data every year about breach investigations and traffic goes through verizon breaking into a company, 5% of those breaches meaning the data
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shared with an unauthorized party. by 2021 that number of 5% jumped to 18% players are joining the game with financials showing that the majority of actors are trying to make mullah. it's trending upwards unfortunately. >> even prior to what's happening in ukraine thank you. that does it for "the exchange." "power lunch" starts right now ♪ thank you. welcome to "power lunch. yet another busy day go figure. here's what's ahead. wall street back in rally mode the market doing an about face from yesterday and you can say that again stocks are rallying hard extending that bout of volatility if you like volatility you like this market. we'll talk about what's driving the volatility and whether it can last and whether the rally
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