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tv   The Exchange  CNBC  October 18, 2022 1:00pm-2:00pm EDT

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>> class "a," the best offices in new york city >> okay, farmer jim? >> i'll step in front of kinder morgan just before earnings tomorrow >> okay, so still playing some energy, as a lot of people are as i said, i'll see you in overtime we have netflix earnings, united airlines numbers, the numbers, the reaction, everything that you need to know i will see you then. "the exchange" is now. >> yeah, there's something about netflix, scott, right? that's right welcome to the schexchange, everybody. i'm brian sullivan in for kelly again. stocks are higher once again today, though we are off the best levels. the dow up 1,800 points from thursday's post-inflation low. but can this rally really be trusted? not everybody is a believer. oh, a guy named bill gates is going to join us yes, that bill gates we'll talk to him about the companies he is investing in, where the money is going to fight climate change, polio, et cetera plus, with the midterm elections
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approaching, is it really all about gas and groceries? you can expect to hear those words a lot the next three weeks, as money and politics, they really start to collide heading towards election day we'll get to all of that and more but first, let's get a chick check on the markets today no dom today, you're stuck with me stocks are adding yesterday's big gains, but off the highs right now. still, dow up 269. the nasdaq is up .7% again, we've lost some steam will we end higher stay tuned to the market to find out. we've come down a bit, still, we are up lots of so-called activist firms making moves -- they don't like to use that term, because i don't know what they're activating for, but still, third point taking a stake in colgate-palmolive and starboard taking a stake in salesforce starboard's founder saying that the company is undervalued due to its subpar mix of growth and
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profitability. financials are up again today. goldman sachs, the big leader there, following an earnings beat and that firm also confirming their sort of internal reorganization plan. home builders, they're higher as well now, home builder sentiment this morning, it tanked it's at the lowest reading since august of 2012, but maybe as bad as it was, it wasn't as bad as the market thought, because home building stocks, despite that data being at a decade low, they're actually all higher right now. lgi, lenard, and kb home as well oil, by the way, taking another leg lower. it is off by more than 3% right now, back to $83.18 a barrel the physical market still a little higher than that. there's a disconnect between what we show you here and delivering an actual barrel of oil. but the price of oil is now below where it was before the opec meeting two weeks ago what do you think about that we'll get more on energy, i'm sure, throughout the show. but today's moves in stocks may make it easier to forget where
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we were only a couple of days ago. on thursday, the dow and the s&p fell to their lowest level since november of 2020 nasdaq to lows that you have not seen since july of 2020. but if you look at the nasdaq since that drop, we are more than 7% off the lows and wall street is taking notice. kristina partsinevelos has been taking notice, as well and she is lhere with a look at what they're calling the bull case for tech. >> i want to reiterate your word, "trust," all three indices are now tracking for their first monthly gain since july. the nasdaq is up just under a percent right now. several bullish tech names stand out in recent analysis commentary we can be quick to forget. companies that have already guided lower, the conditions may imply for upside foreign exchange fluctuations are already priced in. bernstein says that the export ban on high tech chips only affects a small segment of chip
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maker revenue. and holiday season around the corner, which usually bodes well for buying of course, the fiscal policy, the fed, takes a while to be felt in the economy. the big question for investors watching right now, where should you look software and services hold up better, and you can see intuit is up 0.4% and microsoft is still more resilient in downturns, although that stock price is hovering just below the negative right now, just barely lower and not everything is a buy. semiconductor names are mixed with the largest names negative today. deutsche bank just cut several price targets for qualcomm, marvel, nvidia, and amd, however, they still have a buy on several of those names. whether you believe it or not, tech is helping to lead this rally, brian >> it's like microsoft teams it just keeps popping -- you can't get rid of it. it keeps popping up.
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by the way, we have a guy named bill gates on later in the show. >> you can tell him how often you use the teams program. >> which is hopefully zero despite the recent moves higher, your next guest is standing pat he's not selling any rallies, but also not buying the dips welcome in jeff crumbleman he is chief investment strategist at mariner wealth adviser. so you're not buying, you're not selling. you're just sitting in a chair >> with a lamp behind you. >> i'm doing more than sitting in a chair with lighting, you know kbrimprovements that are needed but, yeah, we feel that the appropriate thing to do here is know what you own and assemble your buy list so you're ready to see if this thing has legs and is real. it fizzled in the summer, sure felt good when we had that rally. there are a lot of signs that the market wants to bottom we like the shift in leadership. it's more risk on than it was. we like the breadth that we're
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seeing but i think until,, you know -- you don't fight the fed. until investors truly see the data that we think we see, which is calming inflation, in the forward-looking inflation data, and comfort with the fed, indeed, can pause after a couple more hikes until that happens, i think that it's just too risky to have stock exposure >> given that we know the data, it's something -- i'll misquote it, i'll butcher it, but i'll be directionally correct, as they said if you miss the best two or three days a year over 20 years, your returns are cut down by half or something like that. so, you're advising your clients, stay invested don't sell, right? because then you're going to miss like what we have seen the last couple of days, which is, you know, a 7% rally for tech. >> that's absolutely right so what we did, coming into the year, we really did think that
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we were likely to see a correction and it wasn't just lows, just cost statements, that can happen anytime. we saw the transitions that were underway nart of the fed and we had three years of double-digit returns. so those outside returns over the last three ears, very well could have taken you well above your normal long-term strategic target, if you were 60/40 investor, you might have been 70% plus in stocks we said going into the year, hey, we allowed that to kind of run last year, let's take that off the table, go back to normal, so you're right, you're in the market, but you're not going to suffer if you did that from regret of trying to be greedy and staying at that upper end. by the same token, when that market pulls back, if you trim back a little bit, it will give you the confidence to say, you know what, i can step in at the right moment you're right i think hold your ground is absolutely appropriate you don't miss out you also aren't overly greedy. >> or look at some of these -- and i hate to use the term
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"boring. i don't want to offend their employee base. but companies that are very quiet. like a donaher, one of the names you likes. this is a big industrial, a mini ge, maybe better run than ge had been in the last few years, they don't hardly any media they just kind of grind it out, produce free cash flow, and kind of let their work speak for itself >> yeah, you have consistent earnings growth, there are life-sized stools and diagnostics in water filtration that's used in health care and part of the biotech companies and, you know, benefited from vaccine development and other things and so, it's just nice, consistent growth. i would also say, you know, we were kind of -- last time i was on here, about starbucks i mean, you've got 12% same-store sales growth at starbucks. as we go back to work, people are drinking caffeine. that's another great example and we have names like eli lilly that are in there, t-mobile with
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30% growth and yet it's priced at 23 times. it's great to be boring again. and we're seeing opportunities in those boring areas. and it's kind of fun to go back to some oldtime stock selection in those groups. >> that's it, don haher, t-mobie starbucks, jeff crumbleman, boring is the new red hot. jeff, thank you. j you're not boring. thank you. on deck, climate companies and venture capitalists are gathered in seattle to address the challenge of net zero emissions. the surmt immit is hosted by hi energy group plus, business on the ballot believe it or not, china may be a huge issue for voters in ohio. we'll explain how, coming up
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important update on a really big story, that's probably not getting enough attention elsewhere, especially here in the northeast and new england. the price of diesel fuel continues to rise as inventories crash. and by the way, crash is not too strong of a word supplies are at their lowest level going back decades in some cases, you've got to go
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back to the 1950s to find levels this low it's a real concern for transportation and the economy and by the way, it can also lead to export bans of refined products like diesel from the u.s. congress right now has been floating that idea now, if they do it, they ban exports from america to europe, that could help ease some supply issues here. but it could be another blow to europe, which of course has been importing more of our diesel fuel as they struggle with shortages. by the way, something else to watch with fuel, and that is not here, but in the midwest, and that is the low levels of the mississippi river. levels there are getting dangerously low. and that is already impacting barge traffic. if that happens, it would worsen some fuel supplies in the upper midwest. by the way, tomorrow, the ceo of the biggest barge company on the river, really in america, will join us live, and talk about exactly where we stand and if we're going to see more shutdowns in barges on the most important waterway in the united states all right. let us stick with energy and
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shift more now to renewables some of the biggest venture capitalists in the world are gathering today in seattle for a first of its kind climate summit it is hosted by bill gates' breakthrough energy, which has already funded close to a hundred climate-related start-ups. diana olick was invited to cover it -- either that or she just broke in -- and she joins us now with entrepreneur and billionaire -- i assume that you were invited >> reporter: absolutely, we were, thanks so much thank you, bill gates, for joining us you started breakthrough energy seven years ago in an effort to bring together public funding, philanthropy, capital all in the fight against climate change today, you're bringing in some of the big names larry fink from black rock, vionad kosla, as well as members of the biden administration. what are you hoping to accomplish here? >> with climate, we need to innovate to make the cost of
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doing it the green way far less than it is today and the goal of climate is to get emissions all the way to zero, so it's not just cars, but it's planes, it's trains, it's cement and steel, it's agriculture, buildings we have to have ways in each of those areas and making it inexpensive enough that not just the rich countries, but the entire world decides to get rid of the gigantic level of emissions that we have today >> when we met a year ago, at the united nations climate summit, cop-26 in glasgow, you said that it was surprisingly easy to raise capitol. fast forward a year later. we have inflation, we have fast rising interest rates, we have the war in ukraine, which is putting pressure on gas prices, not to mention a potential recession. how much harder is it now to raise that needed capital? are you making any deals >> we'll raise additional billions for these funds
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i think climate will be affected, but less so than many other areas. a lot of the private sector companies want to understand new climate technologies they see that this is going to be a huge growing industry and we have some success stories, some models of these innovative companies that have made really good progress, but, yes, it will have to have a stronger pitch, some climate companies will get out-competed by other climate companies but i don't think it will be a winter where you can't raise capital at i think a lot of people individually and corporations are going to make sure that we continue to get the billions we need >> but, i don't have to tell you that the tech sector has been hit pretty hard recently we saw microsoft today announce more layoffs tech has been such a greater supporter in climate how is bringing tech out of that do you feel that we're getting to a bottom, perhaps, and that
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that will help investing sooner than later or no >> i think the tech companies all have pretty aggressive plans. and you know, they'll be pioneering customers for the storage or cement or the steel solutions that these new companies come up to i don't see any backing off. you know, they're taking a long-term view they want to be very good citizens so they're engagement has been super helpful to the funding >> now, in corporate america, of course, and globally, we talk so much about esg now the "e" part of that, the environmental part, there are funds, there are people claiming that they are going to offset their emissions by planting more trees, et cetera how much is this companies talking the talk or do you believe that they're all really walking the walking? >> well, the part that i believe in is where you accelerate the innovation and so to me, it's not so much
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who you don't invest in, it's who you do invest in and there's a modest number of companies that are going to make it, the cost of being green, the green premium, they are going to drive that down. and you know, so there's -- i give people strong points, where they're making those investments and becoming customers of those green technologies so, yes, i think the "e" part, a lot of controversy, but i think there is a way to measure it in that it should be a, one of the factors that people look at when they invest in companies >> we don't even have a clear carbon market globally, yet. do we need more regulation at least in the u.s., because it seems kind of like this wild west of climate math going on. should we start to see that regulation >> we're not going to have a carbon tax, just politically in the u.s., it's just not likely to happen. and we did get three bills that went through congress, two were
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bipartisan, one was reconciliation bill. all of which increased the funding for climate in total about $500 billion extra so that is going to accelerate the movement and drive a lot of the new technologies to be in the united states. the whole measurement thing is a little immature. so, you know, sometimes people are allowed to count certain pre-planting things that don't last long enough, so they shouldn't be in there. i think the field is going to get mature on that but, you know, i think having that environmental incentive, a lot of investors really do want to get that information. >> now, as i said before, larry fink of blackrock is here. i want to get your take on something that he said last week, that blackrock would continue to invest in oil and gas. and he got a lot of criticism for that but he also got criticism from the other side for being too
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climate forward. that is, louisiana divesting in blackrock. how hard is it for folks like him and for folks like you who are investing to get this kind of criticism, no matter what you do >> well, blackrock and larry in particular are a great example of private sector leadership anyone who says that climate shouldn't be a factor in how you evaluate the future of a company, you know, that's not capitalism, because companies that have emissions, you know, they are going to be subject to border adjustment tariffs or taxes. you also have to think about companies, you know, if you're dealing with severe weather events, that's got to be factored in. is the company ensuring that are they becoming more resilient? so the attacks are kind of illogical, because climate does affect the economy, which does affect investments the idea that we still need oil and natural gas is also, you know, fairly clear
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we're not going to drain all the money away from that today, it's how people avoid freezing to death in the winter. and, you know, people did get a little optimistic about how quickly the transition can be done now without the russian natural gas being available in europe, you know, we're -- it's a setback. you know, we need to find non-russian hydrocarbons to substitute for those, so there's cold plants running and a variety of things, because, you know, keeping, you know, people warm, keeping those economies in decent shape is a priority on the other hand, it's good for the long run, because people don't want to be dependent on russian natural gas, so they'll move to these new approaches, more rapidly >> and you talk about companies protecting themselves. what do you think about the fed stress testing banks for climate? >> i'm not an expert on that, we
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should understand, you know, for all of the events that can take place, is our financial system robust against these things? you know, probably people didn't think about a pandemic beforehand, and you know, that, of course, meant that we weren't as ready as we should be and that i think driving innovation with some incentives like the tax credits that the u.s. has now, that's the right policy mix there's a lot of discussion about should permitting be faster or not. that will be important, because all of the clean approaches will require a lot more transmission and building new projects. so it's good that that's at least being looked at to not slow things down >> and you were a big part of that bill being passed, the inflation reduction act with billions of dollars towards climate. you also announced last year,
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breakthrough energy catalyst, which not only brings in that public funding, but also puts names together like american airlines, bank of america, gm, microsoft, of course, and shell, to innovate in four different sectors of sustainable aviation, for one thing, and direct air capture. what is the progress on that so far and how much has the i.r.a. helped that? >> those tax credits are targeted, a lot of them at new areas like green hydrogen that have been the very tough areas and sothat will mean that the new companies are building projects here in the u.s the infrastructure build provides some funding for that the breakthrough energy effort called kat list will fund some of those projects so we can make sure they're picking the right technologies that can become very low cost. it's part of the whole theory of rolling these things out and getting their price to come
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down, like solar energy did or the lithium ion batteries, we need that for seven or eight other technologies to get at the whole scope of the mission so the combination of these new bills plus private efforts like breakthroughenergy catalyst mean that you're going to get to go to a lot of plant openings, where people say, okay, this is green steel, green cement, green hydrogen, and a lot of those will be placed in places where the hydrocarbon jobs will weigh, is people get a sense that this is a just transition >> i could talk about this for the rest of the day, but unfortunately we don't have the time bill gates, thank you so much for joining us brian, back to you >> diana olick and bill gates, thank you so much. great stuff. coming up, it has been a disaster of a year for netflix the stock is down $450 a share in a year. so will tonight's results turn that around? that's ahead as we take a quick break, here are the dow leaders.
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goldman sachs doing great. you have intel, can't get out of its own way. it's the worst performer yet again. "the exchange" is back right after this
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[ chuckling ] ♪ and i hope whatever you've got to do ♪ ♪ is something that... ♪ [ music stops ] [ beeping ] cars built with safety in mind, even for those guys. the volkswagen atlas with standard front assist. ♪ ♪ welcome back to "the exchange." markets right now are higher off the highs. dow's high was 652 we're up 1%. nice little rally the last couple of sessions for the overall markets. all right. what about individual stocks for the cruises? they are cruising. carnival, norwegian, royal caribbean all up more than 6%. check this out carnival cruise lines actually having its best month since february of 2021 right as the vaccines rolled out. also higher, defense and aerospace. they are rallying today after lockheed martin beat earnings,
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helped by its f-35 fighter jet sales. that stock on pace for its best day since march of 2020. by the way, a company cfo will be on "power lunch" at the top of the hour. 2:00.eastern time with morgan brennan and tyler with more on the quarter. i referenced tyler let's go to the aforementioned tyler mathisen for a cnbc news update >> and here i am, brian. thank you very much. here's what's happening right now. across france, strikes calling for wage hikes to keep up with inflation are spreading to more and more industries. in paris, protesters tore down a metal barrier and faced off with police in riot gear. regional train traffic cut in half, classes in some schools have been disrupted as well. back home in ohio, two people have died after their plane crashed into the lot of a car dealership eyewitness video shows flames and smoke at the scene of the crash. authorities say no one, mercifully, on the ground was hurt the philanthropist mckenzie scott that has given $85 million
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to the girl scouts of the usa and 29 of its local branches it is the largest gift in the organization's history the girl scouts say they will use the money to recover from the pandemic and improve science and technology education for its members. on the news tonight, the white house trying to discourage american businesses from working with saudi arabia and how some u.s. generals and admirals have already taken jobs with the kingdom. that's tonight at 7:00 eastern brian, back to you >> that should help geopolitical relationships. >> yep >> tyler, thank you. all right, still ahead, the neck and neck fight for the senate in ohio and why china may play a big role in the outcome. role in the outcome. stick around just part of the h. ♪ ♪ opportunity is using data to create a competitive advantage. ♪ ♪
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all right. welcome back we are just three weeks away from the midterm elections and control of congress hangs in the balance. 35 senate spots are up for grabs and there are really a few critical races to watch across the country, including the race for ohio's open seat let's get now to ylan mui with the latest there and why china may emerge as a key issue for ohioans. connect the dots, ylan
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>> yeah, brian, you're right the race for ohio's open senate seat has been a nail biter democratic candidate representative tim ryan and republican j.d. vance traded volleys during their debate in youngstown last night. they clashed on everything from guns to abortion to immigration. but there's one issue they actually agree on. the need to be tough on china and bring jobs and manufacturing back to the u.s. and in fact, they tried to outhawk each other >> if we don't do it, you know who's going to dominate these industries china. and we can't have it >> if you were half as good of a legislator as you pretend to be, youngstown wouldn't have lost $50,000 jobs and those steel workers would not be coming to me telling me that you failed them >> but china is not just an adversary, it's also a big investor in ohio according to state data, china has a stake in 34 businesses and blows about 5,600 people chinese direct foreign investment in ohio totaled $1.7
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billion at the end of 2020, and that doesn't include the new $900 million that broke this summer to make ev battery film sprarts. so brian, whoever wins this race will have to balance their current rhetoric against some of the market realities back over to you >> yeah, there is. it's certainly youngstown, i think, was probably the place to highlight it you go up to northeastern ohio, cleveland-ish, erie, pennsylvania, warren, ohio, that whole region really has been decimated by jobs. where do you think this might rank with people if you go after china, is that going to be a selling point? >> it's really interesting, because i think this is a very salient point in ohio. tim ryan has made this part of the centerpiece of his campaign, even putting out ads that angered some people in the asian american community, because of some of the rhetoric he used, saying point-blankly, it's us versus china in some of his advertising. so i think because of the job losses and because of the challenges that the rust belt
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has felt over the past two decades, longer than that, that's one of the reasons why trade and jobs is such a big issue, particularly in ohio. >> and i think people hopefully are smart enough to realize that the chinese -- going after the chinese government is not going after the chinese people the chinese people have nothing to do with it. it's the chinese government that makes all of the decisions there. so big difference there. ylan mui, thank you very much. all right. so, while the two ohio candidates vance and ryan battle it out over china, your next guest says the election is going to come down to, quote, gas and groceries. joining us now is libby cantrell, head of public policy at pimco and libby, i don't know if you saw it yesterday, "new york times" new poll, i posted it out as well, 44% of likely voters surveyed by "the new york times" and others said the most important issue for them was the economy and inflation. 44%. the next highest was state of the democracy at 8%, and then everything else was, you know, a couple of percent. were you surprised by that >> yeah, in some ways no, in
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some ways, "yes. if you just think about what's happened with gas prices over the last year, up, you know, 10%, grocery prices up 13% this sort of saxaxiom in politi is an adage for good reason. gas and groceries do kind of way on voters. it's ever-present in terms of what voters see and what they experience so in many ways, no, i'm not surprised that this is a polling as sort of the top issue i think what is surprising, just given what's happened over the last, you know, few weeks, last few months, in light of the roe decision, it looked like abortion rights were kind of right up there with the economy and with inflation that receded i think that may be what is surprising about that polling. there was a lot of fervor, a lot of enthusiasm about that particular issue in august, that does seem to have been receded
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and supplanted by the good old gas and groceries. >> i'm not a huge believer in polls. i think we've learned in the dl last decade or so that the polls aren't worth the paper they're written on >> that said, if you believe this poll, to your point, abortion an extremely emotional and passionate topic for many, but it only came in at 5%. climate change was 3% and covid was 0.5% in fact, covid actually was a hash mark among certain age groups i mean, this is an economy and economic-related election. that's it! >> yeah, so going back to james carville and the saying, it's the economy, stupid. the economy again, still looms large. now, brian, we should just caveat and put that one poll into broader context that is just one poll. some of the other polling does show that some of these other social policies are really important, particularly for democrats, as it relates to
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abortion rights and also in good terms of gun control the other thing i would point out here, brian, which is important, is on sort of the enthusiasm issue because what we've seen is, that democrats have actually in terms of their enthusiasm, their engagement around the midterms, that has increased very significantly over the last few months that does seem like it is related to, again, this roe v. wade decision. so, again, it still could impact and inform the election outcome. but it may not be showing up in some of the polling that you're seeing >> let's talk about polling -- i was looking at a bunch of polls last night, as a matter of fact. in fact, the polls vary. one poll will show some guy up seven points another poll will show the same person up two points pennsylvania, obviously, looks like it's closing in ohio is very close but what was shocking to me, libby, were a few things number one, oregon may elect a republican governor. she's leading for the first time in what, 40 years.
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nevada now is leaning towards the republican candidate and is it possible that new hampshire could go republican? these are not thingsthat we talked about with any seriousness two months ago >> yeah, although, i will say that in june, a couple -- you know, four months ago, we were talking about that i mean, it does seem like new hampshire was definitely in place. it seemed like nevada was definitely in play again, i think that democrats sort of got their hopes up that given some of the legislative achievements of president biden and given that roe v. wade decision that those concerns were in the rearview mirror. but as you point out, they were not. again, the economy, gas, and groceries are looming large. i think from a markets perspective, brian, and sort of zooming out on that, the most important thing, "a," is control of the house that looks like regardless of what the margin is, it looks like republicans will take back the house. and then senate control. that's probably a toss-up, because to your point, this polling is imperfect and all of these really
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important senate races, whether it's ohio or pennsylvania or nevada or georgia, all of them are polling within a margin of error. that is a toss-up. but from a markets perspective, control of the house by republicans or control of the house and the senate, it doesn't make that much of a difference really, the house is the most important in terms of the gridlock and the oversight that we -- >> quickly, i'll poll libby cantrell what's the odds that between pennsylvania and georgia, we will not have an outcome the day after election day >> and i would zoom in on georgia in particular. of course, one candidate has to get a 50% threshold in that election in order to stave off a runoff that seems difficult that means that we won't know maybe until the direction of the senate until december 6th, which is when the runoff for georgia would be >> whoever loses, i guarantee you that side is going to say there was something wrong with the election 100% chance. libby cantrell, pimco, thank you very much. up next, he has spent 25
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years on the floor of the new york stock exchange. but now he's here, right there, at cnbc headquarters bob pisani revealing the lessons he has learned in his new book, "shut up and keep talking. h's out today and we're going toear from the man himself after this after this bob, good to see you ♪ ♪ ♪ ♪ - [narrator] if your business e pandemic, ♪ ♪ can qualify you for a payroll tax refund of up to $26,000 per employee, even if you got ppp. and all it takes is eight minutes to find out. then we'll work with you to fill out your forms and submit the application. that easy. has helped businesses like yours claim over $1 billion in payroll tax refunds. but it's only available for a limited time. go to powered by innovation refunds.
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i want to show you shares of twitter. they're higher right now there is a report out that the company will lock employee stock accounts in, quote, anticipatio of a deal. so perhaps this elon musk deal for twitter may be going through. twitter shares up about 2% to 5 51.62. let's turn to a man who needs no introduction. bob pisani celebrating 25 years down at the exchange and in that time, he has learned a lot. right now, he is here with us at cnbc hq with the release of his new book, "shut and keep talking: lessons on life and investing from the floor of the
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nyc. bob, great to have you on. >> great to be here. >> congratulations on the book >> thank you >> we don't want to give it all away, because we want people to buy the book you have an extensive tie collection to support, my friend >> i have to have you as my agent. >> you do not want that. how closely related are the life lessons and the trading lessons? >> they're very similar. one of the big lessons is, you have to embrace change, technological change so look at the new york stock exchange floor when i came there in the summer of 1997, there were 4,000 people on the floor imagine 4,000 people packed in like sardines, screaming at each other. they did 80% of the volume of the new york stock exchange happened right on the floor. today, there's a few hundred people, they do 15 to 20% of the volume that's technological disruption. that's what happens when you get computers suddenly being able to match orders to buy and sell, prices change, you get more efficient pricing, and you can be nostalgic on the floor. i'm the floor guy, i love the
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new york stock exchange floor. but time moves on, technology changes. we have to embrace change, we have to embrace new technologies other than that, you just turn into some nostalgic old guy. >> there are actually tourists there on the balcony it used to be, if you got a job on the floor as a runner and worked your way up, it was a golden ticket. you became -- as long as you lasted, you effectively became a millionaire, and these people, 90% of them went away. >> it was an elite -- it was an elite organization, and yes, a lot of people never went to college who worked down there. >> and made millions >> one case in point, art cashin himself who came really out of high school. never went to college. he always would say, his university was the floor and the bars around the new york stock exchange only one man who has a single chapter devoted to him and him alone. >> is bobby vanns in your book >> i spent many, many years across the street with art at bobby vans
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the lunch club closed in 2006 when the nyc went public they closed it as a cost-saving measure and art and his friends, we called them the friends of fermentation, decamped, across the street to bobby vans and have been there ever since and bobby vans just closed a few weeks ago. >> that's sad. i'm going to steal that line, friends of fermentation. if somebody comes up to you and says, bob, i need investing advice, i know you're not going to recommend stocks, but if you have one lesson you've learned in 25 years about investing, what is it >> first, the average person is best served staying in low-cost index funds. secondly, don't ever try to time the market don't ever think you know to go in and when to go out, because the academic is, you don't stay invested long-term. this is what we're seeing this year, brian, very unusual. down 20% years almost never happen they've happened 15 times since 1926 and 60% of the time, the next year you're made whole within a year so there's only a few times when
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it's ever gone past 30% to the downside but why does the market keep going up three out of four years, 72% of the time, the s&p 500 goes up, every single ear and it's very rare when it drops a lot. so look here add these two up the market impose up 57% of the time, year over year look at that, 36 plus 21 but it's only down 10% or more 12% of the time. this goes back to the 1920s. why this has happened? look, it's up 72% of the time year over year it happens because we have capitalism and we have capitalism as a ruthlessly efficient al indicator of resources. and so, if you believe in capitalism, and i do, and i know you do, too, then that's why you'vegot to keep playing this game >> if people ask me, why does the stock market go up over time i say, simple, if it didn't, there wouldn't be a stock market the reason it works is because it works "shut up and keep talking. bob pisani, looking forward to the next 25. >> i'll be here. netflix reporting results in
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just a couple of hours we're still a few weeks away from the launch of their ad-supported tier, but what will we see tonight we'll talk about it, next. - oh, the stock market is doing that fun thing again. news from the future: you're going to live through that about 10 more times! (laughs) no stress. i just discovered yieldstreet. they vet investments that don't ride the stock market rollercoaster. - [narrator] yieldstreet: private market investing. the new iphone 14 pro is amazing. the camera is incredible. and you'll get our best deal.
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netflix set to report results after the bell the street is focused on subscriber growth. an ls expecting 1.1 million net adds for the quarter 4.1 million for the fourth will the announcement of ad-supported tiers meet their expectations joining us, michael proctor, and mark douglas mike, i'm start with you what are your expectations what would make you happy tonight? >> i think anything over a million is good enough and i think any loss of u.s. and canadian subsets fewer than 500,000 is good enough more people are going to focus on the guide, and i don't think they'll guide to 4 i think they'll guide to 3 because they don't actually know what the ad-supported tier is going to generate in terms of churn. but if they guide to 3, good
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enough stock doesn't move. they need to clarify the ad-supported tier will generate as much revenue as the subscription tier does essentially the ads are going to sk generate $8, $9 a month per subscriber i'm interested to hear what mark says >> can they? will this work >> i think the thing to think about netflix is, their problems are on another scale their problems are opportunities for the business they're the problems every other streaming service would love to have they have 100 million people using the service and not yet paying for it, huge opportunity. they have all these people watching, a quarter billion people watching that now they can bring ads into it. i think it's almost not about subscriber growth. it's seeing them monetize these things that were treated as problems early, and now everyone is realizing are big opportunities. >> mark, i'll go back to you and then mike. if you rur reed hastings,
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running netflix, would you rather have a paying subscriber with no ads or an ad-supported free subscriber? who's going to be more profitable for you ultimately? >> they both generate somewhat similar revenue. they're essentially going to be making the same amount of money as the full price tier, the ad-supported tier, except now half the revenue is coming from advertisers and half from the subscriber themselves. traditionally, netflix likes the subscription tier, but the growth is going to come from ads. >> michael, any indication that amazon prime, football, the new lord of the rings thing, which i thought was terrible, by the way, what am i missing on that hbo with house of dragons, they're taking netflix customers away, or do you think there's enough band width,everybody ha everything >> i think that what they're actually doing is accelerating churn, and i think that there's a ton of recidivism, so i don't
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think that people sign up for netflix and then quit and never come back. i think they quit every six to nine months and then they come back six to nine months later. >> that's a terrible business model, though. >> it is, but it's been the model since they started they stopped telling us about churn in 2014, but literally, they lost 30% to50% of their subscribers every year, and they're obviously winning them back the lower priced ad-supported tier is going to be what your cable company offers you when you call and quit. they offer you $30 a month for six months if you don't quit netflix now can offer you an ad-supported tier if you don't quit we did a survey, 25% of all subscribers say they're highly likely to switch to ad-supported and over 50% who said they were going to quit said they would switch and not quit. >> you agree with that, mark >> i think there will be a big
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reduction in churn, but they have these two huge monetization models to set up to monetize the 100 million people if i walked in here and told you i was starting a new streaming service, and they had 100 million people using it right now, and i just have to start monetizing it with ads, it would be one of the hottest investment opportunities out there. that's what netflix has on the table today. >> let's do it i work in tv i want streaming to work out i don't want people to sign up, pay for a week, binge watch a show, and cancel that's a terrible model. mark, michael, thank you very much netflix numbers out tonight. up next, we're hitting another name reporting after the bell united airlines. philashereewne h t pvi, xt
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one more thing before we go, shares of united airlines are higher today ahead of earnings
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after the bell let's bring in phil lebeau for the key numbers. what are we watching for, phil >> well, we'll see big numbers for the third quarter. we're going to see that from all the airlines when they report their earnings results really what you want to look at is two things. one, will they give specific guidance for the fourth quarter? what do they say about demand growing beyond the holidays? we know that there's going to be a lot of people flying through the holidays what do we expect in the first quarter? and also the question of how do you grow in terms of trance atlantic we know they're expanding their offerings next summer, and what about expanding the fleet? especially when it comes to wide bodies lots of news surrounding united and a potential order with either boeing and airbus, either one, or potentially a split there. lots to discuss with ceo scott kirby. you don't want to miss our "squawk box" exclusive tomorrow morning. before that, we'll get the numbers after the bell we'll see what this have to say about the fourth quarter and beyond back to you. >> i'm sure we're going hit them
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because i'm filling in for melissa on fast money. thank you. united and netflix tonight we will see you there, 5:00 p.m. for "fast money" tonight we'll see you back here for the exc exchange i can just eat these nine seconds. "power lunch" starts right now i'm going to fill the hour that way welcome to "power lunch," everybody. along with contessa brewer, i'm tyler mathisen here's what's ahead. profits are powering wall street for a second consecutive day the earnings apocalypse that many feared is so far missing in action, but can this rally really be trusted? we'll talk to someone and get a perspective there. plus, lockheed martin tops expectations the stock surging today, gaining 22% this year. that trounces the 20% drop in the s&p 500. the cfo wi


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