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tv   The Exchange  CNBC  December 19, 2022 1:00pm-2:00pm EST

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serat? >> i like uber it's off today, but i think the tailwinds are behind ubobby. cintas >> love it guys, thanks for taking it easy on me. thank you, everybody "the exchange" with kelly begins right now. we kick off a fresh week with stocks again trading a little heavy the nasdaq down more than 1% the nasdaq 100 is down 30% this year we'll hear from one investor who thinking that could turn around. speaking of tech, apple reportedly bidding out for the nfl package. who gets the right we'll have that and other media predictions for the new year carter worth reveals his chart
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of the year no 2022. it was a pretty ugly one, maybe no surprise. he does also have one stock he thinking is well set up for here first, over to dominic chu >> hangover continues post-fed we see valuations contracting, just like the beginning of last week 3830 the last trade there, down roughly 21 points again for the context in the trading range for the s&p 500, up two points, so slight will you positive at the highs of the session, down 31 at the lows you can see we're tilting toward the low end. the nasdaq composite 10,585, off over 1%. one specific part contributing probably most to that down side has been the communication
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services sectsor it's down about 1.5% so far. it's been in a steady down trend. and meta could be possibly billions and billions of fines from the european union tied to alleged antitrust violations in those markets over there with online classified, others things like that. it's dragging the entire sector down it's m&a, merger monday, though it was kind of reported over the weekend. aerojet, they make a lot of things that move rockets, jets that trade is up about 1.5%. it's agreed to be bought out by l3harry technologies now, remember aerojet rocketdyne
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agreed to be bought up by lockheed, and regulators kind of nixed that deal. and there's a risk to this deal. the sector is down year to day, and now widespread fears of a recession is coming, but my next guest says tech is not dead. let's say oxygen goes out of
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the -- i think it has to go to the big tech, and i think that, in discussion with my team -- i was talk to go mea team the other day, but i think that would be the driver. >> we lake too talked about, why do you think there is going to be this mandate. >> that money is not available to invest in startups, and i think that 4%, we're certain see
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it from our clients. all we need is a month of tech rally, and people won't even remember what happened >> dom, apple, alphabet, you also say costco, j&j, airbus, what do you think? >> what's interesting is michael has an interesting point arguably since the, and have for quite some time. although they're becoming
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slightly more appealing these days, because they are much larger companies they say there's a reason for why -- but they have become the safe haven trade in many ways. the interest rate trade hays taken valuations down. so that's the reason why, but i'm pretty sure at this point, all it takes is people to see that microsoftalabet, even meta platforms has been crushed, could be some place they want to be back in. >> the biggest question is, if last decade was faang was the way to trade, everyone was basically just ghost tracking faang, is that still going to work once the dust settles here? or not, do you think i think you're going to be big
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tech i think some of the -- one of the things that even you had, kelly, about meta, for example, is this is a company that's in tremendous transition. with unfortunate things we like to avoid is companies where there's uncertainty about what the model will look like, and certainly meta is in transition. are they metaverse are they facebook? are they whatsapp or instagram it's hard to say i think the messaging has been hard for them. i'm sure you saw the head of the vr platform just resigns and resigned out of frustration. i don't like transitional names, but i think dom is corrects, that you will have a rotation toward this es go-to names i think they are more appealing. >> what do you think, dom?
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>> i think a lot of it will defend on what happens in interest rates if you have a situation where in the first quarter to six months of next year, and you might start to see a call to action, if you will, about, hey, this is the time, and it may even be earlier than that. >> it might be happening now >> they're so geared, they want almost like in a football game when they're trying to bait you offsides on the defense. people want to get back in the trade. do you think the fed could spoil these trades >> if the fed continue to say ramp up rates. my thesis essentially is that
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the fed will moderate their rate increases, the steepness of the slope will go down if i'm wrong and they start doing three quarters of a percent, i think all bets are off. i don't expect that to happen. >> we will leave it there. michael and dom, thank you meanwhile, another troubling data point to house, the the sentiment came out at the lowest level, with a string of declines, and markets are bracing for more bad news. diana olick has more. >> it was the 12th straight monthly drop, but the smallest drop in six months, and the chief economist did say the recent drop in mortgage rates, the index may be near a bottom anything below 50 is negative. it was 84 last december when mortgage rates were less than half what they are now
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current sales conditions fell three points to 36, but the expectations in the next six months increased four points to 35, so there is your green shoot. affordable continues to be the problem. while 62% of builders surveyed said they are using incentives, with construction costs still way up, only 35% of builders reduced home prices in december. that's down from 36% in november so tomorrow we get the monthly reed on housing starts the mortgage rates are down a full percentage point. then on wednesday we get existing home sales for november, but those could still be ugly. they're based on contracts signed in september and october when rates were still hitting those highs. >> we thought they were down a bit, but then today we're higher >> i mean they were down quite a bit. we're off that 7.37% we saw at
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the end of october we're in the 6.3 range, but we saw bond yields coming up again. i've seen a couple analysts saying that rates are not going below 6% definitely not going much lower anytime soon. thank you, diana. coming up, the year ahead in media. one of them will merge with another big name these are just predictions from the annual media list. so you definitely don't want to miss it. plus the people have spoken and they want elon musk to step down tesla shareholders would surely want that to rally on the prospect, turning lower, now trying to play into a 1% gain. will he actually go? as we go to break, a quick check on the markets, the dow is down 100 points, and 1.1% drop for
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the nasdaq we're back in a moment
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all from the company that powers more businesses than any other provider. get started with fast speeds and advanced security for $69.99 a month for 12 months. plus ask how to get up to a $750 prepaid card with qualifying internet. welcome back to exchange 2022 has been a big -- to the --
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and in netflix, that maybe by off to a rockie start. joining me is media reporter alex sherman he spoke to 12 media executives on their predictions >> to be fair, kelly, i didn't call it personally city spoke to someone and then chose to include it. i'll take partial credit these are anonymous predictions from past and present, that hold, you know, i would say fairly significant in the media. >> i assume it wasn't bob iger himself who -- >> i mean, if it was i couldn't tell you, but that would be
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fantastic. >> so let's stake with iger. of the 12 predictions i listed, i think they rain to somewhat wild on the box to somewhat more feasible simply based on his track record, he decision to extend he contract it's possible that he doesn't choose a successor at all. he simply extends hi contract. he's 71-year-old he's certainly in excellent physical condition he has a famed early morning workout that he's continued to do >> what do we know
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one, he has had trouble letting go of that job in the past and, two, we know he loves being ceo of disney. why do we know that? he just took the job again those two things indicate that an -- >> let's move on to this call, which i find quite strikely. netflix with merge with another company. >> this is one i think that is more out of the box. if you go based on previous history. so however, what this executive told me, and what others have said over the past few months is
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that it's possible now, that if global growth is stalling, netflix may need to do something more out of the box to make sure it has the requisite amount of original content it needs to succeed against the other competitors for years to come moving forward one way it may do that is to merge with an existing legacy -- disney would be the huge one here -- >> can you imagine, actually imagine? it's such a stunning idea. but maybe the deals take so long to close, maybe it could happen under a different administration. >> i think to some degree there's a bit of wishful thinking bob iger is going to merge disney with flnetflix, and ride off into the sunset. reed hastings is very positive
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about bob iger, certainly publicly he had that tweet a couple weeks ago when he came back, sort of signaling i wish he would run for president instead of coming back you just saw regulators say the acquisition for microsoft's for activision was not going to go through, at least without a court satisfying they also clamped down on smaller deals, the simon@schuster publication deal. so the idea they may be a bit much paramount has paramount pi pictures i don't know what they would do with the legacy cable networks, that could be messy there and
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you think david zaslov could be under pressure, and you think the cost of sports rights will people, and you think -- >> youtube makes sense for the league, probably the closest fit for directv in terms of a legacy cable bundle, pairing up with sunday ticket. that way in the marketing, it can market all of the nfl games that are already on legacy tv for the next five to seven years. more than 2 billion users in terms of sign-up, 122 million monthly active users of youtube. that's a lot more than, let's
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say, we don't know how many people sign up to apple tv plus, but it's probably in the 20 to 40 million range so from a marketing standpoint, youtube makes a lot of sense google is a huge company, a big balance sheet, technical aspirations. there's a lot of fits there that liken it to, say, apple or amazon, which i think maybe it feasible the nba renewell are coming up i think everyone expects another big jump in price. what this person said is that person will be the last significant renewal we have where we're going to see those outsized sports rights a lot of the legacy sports are tied up for the next five to seven years. who knows what the ecosystem will look like at that point it could be possible that only sports fans pay for sports
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rights, which would bring the entire audience down. >> it feels like we're at that moment, doesn't it i recommend the piece to everybody. head over to to check it out we appreciate it that's our alex sherman. millionaire investors point to one issue heading into the next year. and carter worth with a notable chart, and one that's setting up well. the name is coming up.
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welcome back it's been a high of 118 and lowest of myroninus low 118 let's turn now to the drama-filled world of crypto, where sam bankman-fried is now headed back to prison in the bahamas after a court hearing, where he was widely expected to accept extradition to the u.s. apparently there was a last-second change of heart here >> i was talking to one is appears he got cold feet, but there was a sense of confusion, court in bahamas has been adjourned, sam bankman-fried headed back to jail. a source familiar with the matter told me earlier he went in planning to surrender himself to u.s. extradition, meaning he was coming back to the u.s., but
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his defense attorney today saying in court, he wants to see the indictment against him before agreeing. a lot of prosecutor was saying he understood sam bankman-fried was there to waive extradition and his bahamian attorney requesting that he's allowed to speak to american attorneys in custody. he arrived in a suit, but he still look disheveled, his knees were shaking, so we got some details. last week, they said they planned to fight extradition, and has been in a fox hill correctional facilities since his first court appearance last tuesday, he was indicted in a new york federal court last week on eight criminal charges, facing civil suits from the s.e.c. and ftc
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also where in clipprypto, binan agreeing to buy voyager. >> so an ironic turn, it would be binance, who is the one that caused the decline of ftx. does it almost sound as in the gravity is sinking in. i don't know if he's been in personal denial, but if that's how it's prosecuted, he's facing a significant amount of prison time >> it seemed a few hours ago that that was moving forward that delay tactic, as someone described it, was sort of going away he's going to come back and the trial will get underway. he'll be arraigned the process can just move forward. this appears to be another delay tactic based on what legal experts were telling me, an
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someone described it as him getting cold feet. there may be a built of a disagreement between him and his parents or the legal team. if he has any opportunity, there's sort of a window for him to get bail in the u.s. and get some deals done and negotiate. he may be losing out on that, that window that i'm told is very, very narrow. >> kate, thank you let's get to tyler mathisen for a cnbc news update hi again >> welcome to see you. here's your update at this hour stelantis have confirmed another death from an exploding takata air bag. they're warning older dodge and chrysler vehicles to stop
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driving them under the bags are replaced. 36 people were injured after an aircraft encountered severe turbulence shortly before landing. the january 6th committee believes it has enough evidence to refer the former president trump to john eastman for possible criminal charges. the memo from eastman -- during certification on january 6th the legal arguments used in the memo have been disproved back to you, kelly sue he in half an hour if we told you fixed income would be one of the important stories, you might have laughed, we'll look ahead at what's in tore for 2023. "the exchange" is back in two.
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welcome back to "the exchange." as we wrap up the year, let's look back and see how far we have come in the bond market
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now we're just shy of 3.6% that's 200 basis points in 12 months what does it mean if you're a bond investor? the tlt, down 30% this year, a horrible return, since the year low, that is much 13%. is it time to jump back into the bond market? let's bring in brian weinstein brian, great to see you. you know, i can understand the kinds of this is a enter entry point argument, but tell us where you think the most attractive marsen. >> as you say, it's been a wild ride if i look at the boon market here, there is a couple risks, but i think it says if you buy high-quality income, that number you quote d is about as big a
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move as we've ever seen, really. >> as we turn to dom for the latest wonky but wonderful, whatever we're calling it, this, dom, the largest point is there is an alternative to the bond market can you get yield. how much are you giving you if all of a sudden we have a soft landing. >> there's a bit of a paradigm switch with how you're doing fixed income or credit investments in this kinds of environment in general we used to tilt our conversations all about how they're geared toward people who are older, people who are in retirement or getting there, or very close to it but all of a sudden, there's more of a discussions these days, because there isn't a need for picking individual bonds there's etfs and funds for everything, all of a sudden if you're in your 30s or 40s or
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50s, you're getting towards there, these are times when you can start building positions in these things, not taking a massive bet. and these are what these opportunities are right now. >> usually i talk to jon fortt about tech stocks, but lately it's all about cds look, i'll take a one-year cd, take 4%, or do you think there's more compelling opportunities? >> i think there's more com bell, by the way, i love this conversation i'm in my 30s or 40s, but i think you're right you can buy in cash. cash is great. but if you're paying taxes f.
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you pay decent tax rates, that gives you 6%, 7% if you like high yield, yes, you can get it there, too. it doesn't mean we're at the bo bottom. >> a couple years ago, if it looks like this much of a sure thing, and destroy this whole party by hiking it and ruining returns again? >> the bond market is very sure inflation will go to the mid 2s, so the risk is that persistants inflation and the fed keeps raising rates, but if you guy cash assets, if you're wrong, reup at a higher rate, so growth
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will suffer, it will go down, so i like buys very short-duration things it doesn't mean you win right away, but if you buy it over time, if you're wrong, you'll survive. by the way, if you're wrong, i think it will be a harder time than easier. if you absolutely fear are default, first and foremost, and then inflation possibly a distance second, the biggest wild car is whether or not will it's not really another default asset, certain, the
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persistent story, it takes away a lot of alose of that -- and all of a sudden you may start to see things change a bit. people will maybe focus on risky assets just as a frame of thinking, because they feel inflation will be a part of the story. >> so if the fed fights inflation and protects you that way, they risk a downturn that could wipe out your credit if they don't fight inflation enough, the companies may pay out the obligations, but you may come outb hind inflation, so that's the tug of war we're in >> no doubt, no doubt. the risk is inflation stays high so, yeah, this isn't a call for take 100% and put it into bonds. there are still risks out there, but as part of the discussion, should i own some?
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yet, and the bond market i think is at odds with a lot of other opinions we'll find out. >> you mentioned munis, any kind of last opportunities up to name call for people doing research at home? >> the place where we have seen the most inflation fighting is in emerging markets. if you want to see yields that are high, you can look at emerging market debt funds and find high yields countries that are fighting inflation successfully like >> i don't want you want to buy an index on things like that, but a combination of emerging debt and there's some great opportunities there. >> we went from boring safe treasury income to emerging market debt just like that. >> wonky but wonderful brian, thank you very much and dom, thanks as well.
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still ahead, 57%, that's how many people voted yes in a twitter poll, asking if he should step down he's promised to abide by the result will he make good? we'll explore after this quick break. "the exchange" is ba itw ckn o.
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welcome back elon musk had promised to make twitter the common digital town square the common people have spoken. the ceo asked if he should step down, more than half of the 17 million voted yes. >> there's no word whether he'll make good on his word, but the results of the poll were clear, 17.5 million votes, with more than 50% saying yes. he's already said he doesn't plan to run twitter forever.
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just last month he testified in a hearing challenging his compensation much of that question in that case focused on his time at twitter instead of tesla meanwhile, tesla shares are down about 40% since he took control of twitter, and over 50% since he offer to buy the company in the spring last week he sold more shares, presumably to fund twitter operations, as advertisers reportedly reattitudesed our pulled their spending, and it comes after saying he wouldn't pull any of his shares he arbitrarily suspended some journalists, and cancel some rules. well, he says this week there is no successor yet by the way, tesla shares are positive now, they're up even more premarket when polls close.
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>> i wonder what he means, no one who wants the job can keep twitter alive. it sounds bearish on the prospect, and his personal value is so tied up here between the shares he sold out of the tesla, the price that was arguably overpaid for twitter, and the necessity for him to make this company work >> he's almost setting up the successor for failure. the only metric he's been able to brag about it, is more e engagement is great. that's why re heard those rumors that maybe he's trying to raise more money so, look, it's either finding new way to say monetize, or he keeps having to go back to the piggy bank and cash out more tesla shares
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we know that elon musk has set a lot of things, or any of his various side projects. it's not that anyone is too surprised by this, but i think it's remarkable, that he's put his money where his mouth is >> and other people, too. >> even for himself, selfishly, it's not as if he's coming in on someone else's dime. he has to make this work >> i'm going to shock you, kelly, that is how he's -- robo -- there's solar tiles, and they didn't turn out that way, plus there's a lot of issues with though. so he excels at overpromising and under-delivering
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so maybe he says maybe i have to quit and step down, and set themselves up to fail. coming up, carter worth giving us thinkhis chart of the, and we'll reveal the name and lessons from it, next. ♪ ♪ a cyber-attack can grind everything to a halt. cisco security keeps your company moving forward. because if it's connected, it's protected. cisco.
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welcome back no matter how you slice it, it's been a tough year for stocks each of the averages currently ride ago two-week losing streak, but where you didn't invest could be just as important as where you did this year. we ask carter worth for his "chart of the year" in 2022, and for another name he sees sets up well for 2023. carter worth, good to see you again. drumroll, please, your charity of the year is >> when considering all that, and we know there'sic epic moves, it became such a fad, but such a nothing, beyond meat. for the record, i've never had
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any of it. here's the thing there's the real thing in life and there's always the fake thing. consider -- think about --i'll give you something funny since 2000, butter sales are up 23%, margarine down 32 sometimes just eat a little 32%. sometimes eat a little less of the real one or don't eat it at all by why have a fake hamburger? this company's market cap was $15 billion. >> wow. >> under $1 billion now. $900 sainking atestament to one of the great rupes in markets, don't buy stocks in down trends. sums up 2022 almost better than anything else probably could what about for 2023? >> well, i mean, if one were to try to be careful, prudent, one of the things to do always think large cap. another thing is to think
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defensive in terms of sector or theme. and then to pick a marquee name. united health care has to come to mind. it does to my mind, anyway a stock that is clearly domestic, doesn't care about currency doesn't care about oil doesn't care about putin it is just operating its business in the managed care space and trades in a market multiple, in fin cares about that not what i do but worth noting and devgfinition of a stock in uptrend. considering all things as good as pick as any looking forward. >> does it make you nervous calming off a 14-year win streak and that a lot of people now, we've heard, i can't even tell you just this past week how many are bringing big health care names as best ideas for 2023 does that crowding effect tell us, either this is just a market we're in, or is this actually some kind of trend to fade much like if only we knew beyond meat back last january, only knew then this was the short of the
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year >> remember, a year ago, which is ironic, stock down 60%. venture value traps now here it is down another 78. >> wow. >> thing about health care that, if the secretariy sector underp market, peak perform in '15-16 not that crowded a space i know a lot of sort of thinking that, when the administration changed there would be, you know, drug price issues and so forth. listen, that's outside my purview and i don't think anything can do that all stick with tried and true things relative strength, beyond meat relative. >> it's poor, stay away. united health care, good, embrace it. >> wasn't just beyond meat gopro, zoom, sofi, other names with similar trajectories. what are lessons to be learned obv obviously rsis but retail traders piling into a consumer
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trading boom and these names went way high especially during the pandemic and the air completely came out? >> right think about those names with a basically consumer gopro what is it a camera on your head. remember lending club popular, all wiped out. same, i don't know, but all what established down trend and usually that's a problem. >> all right carter, thank you. appreciate it. >> you bet. >> carter worth. worth charting. still ahead, the s&p is down nearly 20% this year, and if the results from cnbc's millionaire surveys arto be e believed, 2023 might not be much better why is the bear here to stay, that's next.
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one more thing before we go today. it's results of the cnbc millionaire survey and they're not particularly optimistic about next year. robert frank is here with the collusive results. robert >> consumer story we've been hearing is weakness at the bottom and strength apart the t. might be about to change 80% millionaires plan to spend less this holiday season according to our cnbc survey polling investors with $1 million or more in investable assets millionaires cutting most. virtually all millennial millionaires polled said they plan to spend less due to inflation, and if you look at baby boomers, it's only 78%. more than half are more price conscious when shopping and saw walmart reporting more shoppers with six-figure nshgs in their grocery lines.
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one-third of millionaires cutting back on restaurants and 28% are cutting back or eliminated major purchases they think inflation will stick around for a while most say it's going to last at least for a year or more you can read full coverage of our millionaires survey including their forecasts for stocks which is very bearish in fact, the most bearish since 2008 you can read all of that on kelly? >> robert, we heard elsewhere. a white collar recession already. that job openings for tech and finance and insurance feels are way down stock market returns, a hit obviously. yeah actually the blue collar, lower segment of the workforce seeing strongest wage growth and best demand right now. >> yeah. not just layoffs but if you're a business owner, whether small or medium-sized business and wealthy, you're looking right now to cut spending, cut capital
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investment and maybe even cut jobs when doing all of that in your business, even though you may be doing okay financially, you're not going to be in the mood to spend on a big-ticket item or restaurants or a vacation right now. >> exactly. >> a lot of that is not just the money but the mood. >> sure. that mood can absolutely end up trickling down as we know. certainly in the market, worried about a broad recession. thank you. robert frank head over to and that does it for t"the exchange" today. speaking of bears sentiment, coming occupien "power lunch" mikey nike reports tomorrow after the bell debating more coming up right now. good afternoon, everybody. welcome to "power lunch. i'm tyler mathisen along with kelly evans good to be back together again here's what's ahead, folks 2022 promised to be a banner year for bank investors but the
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opposite happened. the sector on pace for its worse year now since the financial crisis and there may be more pitfalls to avoid in 2023. we've got the ceo of the year, yale university with our power rankings find out which executives top the list and which found themselves embroiled in controversy in getting the short end of the stick. >> tyler, so nice to be back together as long last hi, everybody pap check of 9 market not seeing a pretty -- this is a familiar story from the past we're. trading heavy and heavier throughout the afternoon starting with the nasdaq and spreading. nasdaq down 1.5% s&p down 1% to 3815. watch that 3800 level, watching for downside price action, and dow down 200 points nowor abou two-thirds of 1% yields moving high perp not helping the ten-year yield up around 11 basis points 367 the latest there tesla shares, that's the whole other story.


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