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tv   The Exchange  CNBC  December 1, 2020 1:00pm-2:00pm EST

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which they are committed to. i like this name. >> playing a little bit more for the reopen josh brown, you're last but not least. >> did you happen to notice new all-time high in uber today. that stock is going much higher. i think it's a $100 billion market cap from here. >> good stuff. >> stay long, i am long. >> good stuff, everybody "the exchange" is now. >> thank you, scott. welcome to "the exchange." i'm melissa lee in for kell evans. here's what's ahead. bulls taking charge to kick off december for a record. are we setting off for more gains or did the november jump steal from the santa claus rally? plus, betting big on beauty. sephora will open hundred of shoeps in kohl's stores. and an inside look at just how hard airlines are going to lure back corporate travelers as they
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try to cut into their cash burn. let's start with the market movers and dom chu. >> reporter: you would think after the best month for the dow since january of '87 that things would temper off just a little bit here but, no, we've got a nice green screen across the board. dow industrials up 260 points, off the highs of the session we were up more than 400 points or the opening bill so 1% gains. 1.25% gains, 3667 for the s&p and the nasdaq reassuming that pole position, that leadership spot, up 1.33% 1257 for the last trade on the composite index. one of the big themes that shaped up over the last month is the real outperformance of small-cap stocks versus large-cap. look at ticker iwm, 19%, 20% gains versus 12.25% gain for the overall s&p. that gap, if it starts to go even wider, could signal more economic optimism. that small cap versus large cap,
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one trend to watch in the monday of december and then the stock of the day, check out what's happening with zoom video, over 14%, just off the lows of the session so far today this company has been hyper when it comes to growth, but that growth may be tempering now. at its peak this is a $162 billion company, melissa it's closer to around 117 billion right now but that's still for perspective, melissa, makes it a hair larger than citigroup and a hair smaller than boeing. back over to you. >> dom, thank you. dom chu. inflows into equity funds, one of the largest in years, $17 billion poured into equity funds in november and according to etf trends $510 billion moved into etfs for 2020. that's on pace for the biggest year ever. joining us now chris davis, chairman and portfolio manager of davis advisers and mark smith, vice president and portfolio manager at ubs wealth management great to have you both
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chris, i'll start off with you in terms of it these flows, what does that tell you, if anything, about where we are in the market particularly as we sit right at record highs here. >> well, we're really in a tale of two markets i mean, it's sort of amazing that you really recognize that five stocks have generated two-thirds of the total return of the s&p 500 this year so you really are in an opportunity where you had this bubble sort of valuation from areas of the market but also areas of the market that are really on sale today, and i think that difference between growth and value with the growth index up 32% the value index down still for the year, the financial index down almost 10% for the year got some real opportunities in this market. >> statement, you like the areas of the digital economy, and some might argue that's where the valuations are stretched the most as opposed to the value side it sounded like you liked the value side of the equation here. >> well, i do, but i would also say that you've got to break out both of those categories
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in the growth category, you have to separate out growth pretenders or unproven growth from the growth stalwarts. the difference is between the zoom that you mentioned earlier and the googles. it's just night and day in terms of durability, resiliency, growth stalwarts on the value side you have to distinguish between what we would call resilient value, think of the financials and then really speculative value or value traps. think of a lot of the industries where you are really betting on timing of the recovery and hoping they can skirt the edge of bankruptcy. >> yeah. mark, as we are up here with higher valuations, people are looking for value, and we have seen that sort of rotational trade take place chris is making the nuance and i think a very important distinct between types of value, types of growth, mark in your view what are some of the -- of the things in the market that look interesting to you right now, and what are some of the value traps that you think investors should really be aware of >> thanks for having me on and happy holidays to everybody.
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i think that there's a lot of potential in the health care sector right now everyone has talked to me about the vaccine and 95% efficacy i think that this is going to be a home run in 2021 to 2022 for the health care companies. biden and his plan is going to be somewhat thwarted because of the senate they will not be able to do this robust health care initiative that was once feared in the health care industry so i think the health care sector really does have a lot of potential growth in the coming year and two years. >> in terms of value traps in the market i think with so many investors pouring money into the market these days, they have got to be aware of what might look like value but really are just traps. >> yeah. i think that right now you have to look at some of the tech stocks that you've been seeing, some of the tech stocks have huge declines. i think there is not as much upside as there was eight months ago in the tech sector so you really do have to at this point -- >> sorry to interrupt, gentlemen. we want to go to president-elect
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joe biden and vice president elect kamala harris who are expected to name their economic team in delaware. >> even if it was far from the traditional large gathering of families and friends, apart from many we loved, i hope you had a good thifrks andanksgiving, andw times are tough and help is on the way. last week i announced the nominations and stafffor critical foreign policy and national security positions. a first rate that's going to keep us safe and secure, and today i have the pleasure, i have the pleasure of announcing key nominations and appointments for the critical economic positions in the administration. first rate team that's going to get us through this ongoing economic crisis and help us build an economy back not just build it back but build it back better than it was before, a team that's tested and experienced. it includes ground-breaking americans who come from
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different backgrounds but who share my core vision for economic relief here in the united states of america and given a fair shot and an equal chance there's nothing we all believe -- there's nothing beyond the compassitivity american people. let's not forgot who built this country. working class and middle class people built this country, and unions built the middle class, and from the most unequal economic and job crisis in modern history we can build a new american economy that works for all americans, not just some, all. we need to act now though, and we need to work together you know, in the weeks since winning the election, vice president harris and i have covered meetings with a number of people. we convened meetings with labor leaders and ceos at the same time mayors and governors of both political parties. there's a consensus out there that as we battle the covid-19 disease we have to make sure
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that business and workers have the tools, resources and guidance and the health and safety standards to be able to operate safely the goal is simple, to keep businesses and schools open safely and for millions of americans who have lost their jobs or hours and have had to claim unemployment, we have to deliver them immediate relief. that includes affordable health care for millions of people who have lost it and are in danger of losing, it child care, sick leave, family leave, so workers don't have to choose between work and family. relief from rent and student loans. we need to support small businesses and entrepreneurs who form the backbone of the communities that we live in, that are teetering on the edge you know, there's an urgent need to fund state and cities so they can -- so the frontline workers on those jobs can stay on the jobs you know, the founders are
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pretty smart i could have gotten this lesson from the future secretary of the treasury there's a reason all the states and localities have to have a balanced budget but we're allowed federally in order to have a deficit in order to deal with crises and emergencies that we have had in the past. we have to keep vital public services running we have to give aid to local and state governments to make sure they can have law enforcement officers, firefighters, educators. as we did in the recovery act of 2009 right now the full congress shouldcome together and pass a robust package for relief to address these urgent needs, but any package passed in a lame duck session is likely to be at best just a start. my transition team is already working on what i'll put forward in the next congress to address the multiple crises we're facing, especially our economic and covid crisis
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and the team i'm announcing today will play a critical role in shaping our plan for actions a starting on day one and move fast to revive this economy. they are going to help me help us help the country lay how the my bill back better plan, a plan that an independent analysis from moody's, a well-respected wall street firm projected a would create 18.6 million jobs it's based on the simple proposition, reward hard work in america, not wealth. it's time to invest in infrastructure, clean energy, climate change, manufacturing and so much more that will create millions of good-paying jobs it's time readdress the structural inequities in our economy that this pandemic has laid bare. economists call this current recovery k-shaped. well, like the two lines coming off of a "k," some people are seeing their prospects soar
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upwards while others are watching their economic prospects drop sharply for those at the top, jobs have come back. their wealth is rising for example, luxury home sales run over 40% compared to last year, but for those in the middle and the bottom, it's a downward slide they are left figuring out how to pay the bills and put food on the table. almost one in every six renters was behind in rent payments as of october let me be clear. with this team and others we'll add in the weeks ahead that we'll create a recovery for everybody, for all we're going to get this economy moving again we're going to create jobs, raise incomes, reduce drug prices, advance racial equity across the economy and restore the backbone of this country, the middle cross our message to everybody struggling right now is this help is on the way
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my dad, you heard me say this before when he lost his job in scranton when i was a kid and we eventually moved the family not far from here to claremont, delaware, just on the outskirts of wilmington. used to say, joey, a job is about a lot more than a paycheck it's about your dignity. it's about respect, your place in the community it's about being able to look your kid in the eye and say, honey, it's going to be okay and mean it. he also used to say, joey, i don't expect the government to solve my problems, but i do expect them to understand my problems this team understands. for secretary of treasury i am really pleased to be able to nominate janet yellen. no one is better prepared to deal with this crisis. i wish it weren't as much of a crisis, future secretary, but she will be the first treasury secretary who was lass chair of the federal reserve, vice chair
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of the federal reserve and chair of the president's council of economic advisers. janet is one of the most important economic thinkers of our team she has spent her career focused on employment and the dignity of work which is really important to me and to all of us she understands what it means to people and their communities when they have good, decent jobs respect across -- looked at by their neighbors and being respected, it matters a lot to them, and respected across party lines and around the world by main street and wall street, an educator, a mentor, above all the daughter of a working class from -- from a working class brooklyn neighborhood who never forgot where she came from her husband george is pretty good, too. he's won a nobel prize, but he's one that married up.
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janet will be the first woman to hold that office we might have to ask lin manuel miranda who wrote about the musical about the first treasury secretary hamilton who will have to write another musical on the first woman secretary. that's what i'm working on janet. for office of management and budget i nominate neera tanden, a brilliant policy mind with practical appearance across government she was raised by a single mom on food stamps, an immigrant from india, who struggled, work hard and did everything she could for her daughter to live out the american dream neera did just that. she understands the struggles that millions of americans are facing, and she will be the first woman of color from south asia -- from south asia, and i
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think that -- to lead omb. we also have another one of those women as vice president of the united states of america so look i'll be very serious. she will be in charge laying out the budget that will help us control the virus and deal with the economic crisis and build back better, but above all she believes what i believe. a budget should reflect our values again, quoting my dad for real my dad, joe, let me tell you what i would value, and they would look at him as a high school educated guy, very well-read. he would say don't tell me what you value, show me your budget and i'll tell you what you value. that's what you're going to do for us as deputy secretary of treasury i nominate wally odierno wally, i don't know, i'll tell you what, senator warren really likes you. she highly rippled, but i wasn't sure she was worried that i stole you as well.
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thank you for being willing to do this. a skilled leader and think on issues ranging from macro economics to consumer protection and from national security to international affairs. i've worked with wally during the great recession. that my excuse to the senator, saying that's why i wanted to steal you, and i saw him tackle one paying job after another deputy national security adviser to president obama, deputy director for the economic national council, former chief of staff to elizabeth warren where he helped create the consumer protection bureau, financial bureau, which has done so much good it's designed to protect consumers and working people from unfair, deceptive and abusive financial practices it, and now wally will be the first african-american ever to hold this post and the highest ranking african-american in the treasury department's history, an immigrant from nigeria, the son of a nurse and elementary school principal wally understands everything we do is basically for the people,
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for families, hard working people to understand their struggles and most of all their dreams and he understands both. i want to thank you, wally, for being willing to do this for chairperson and the council of economic advisers i nominate not withstand, she was a very distinguished professor at princeton, i joke, my concern who went to penn always used to kid about it, butty is celia r 0 se, one of the most distinguished economists in the country, expert on labor, economics and race, poverty and education. dean of the princeton school of the public of international affairs. remember the council to economic advisers to president obama, an adviser to president-elect at at national economic council, more than that she's a proud daughter whose mom, a school psychologist, encouraged her to pursue her -- pursue economics and her dad, one of the
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country's first african-american astro physicists who dared her to dream she's done both. if confirmed, c.c. will be the first -- excuse me, the fourth woman to lead council of national economic advisers and the first african-american ever to hold that post, and as cea chair, she will serve as a member of my cabinet as well as a member of the council of economic advisers, we also appoint jarred person steerngs an old friend who has been with me a long time, a brilliant thinker, quit wit and heart as big as his head and the heart he got from his mom, an educator who raised him he served as my chief economist during the vice presidency he was there in that foxhole during the great recession with the economy on the bring and our country on our back. i couldn't think of anyone else who i would want to be on my
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side to face the challenges aside. jarred will be one of the leading voices in my administration on economic policy i can always count on him to deliver straight from the shoulder as his hero fdr used to say, straight from the shoulder. the one thing i can assure you is working people will always have a voice with jarred and this council as a member of the council of economic advisers, i appoint heather boucher. heather, thank you for all the help you had in the transition team and getting me here she's one of the foremost economists working to make sure we build an economy that works for all americans. the daughter of a union family, no wonder she believes so deeply in the idea that leave no one out. leave no one behind in this economy. during the campaign i relied on her council on address structural inequities within the economy, and i'll do so again as president because the -- that's one of the central issues of our time the to this team, thank you for
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accepting the call to serve of again. to your families and to your -- thank them for their sacrifices because it's real sacrifice. we could not do this without you, and to the american people, this team will always be there for you and your families. this is family-oriented team we've got to make sure that ordinary people get a chance to do well because they never -- when given a chance they have never ever let the country down. 11 years ago president obama and i entered office during the great reand implement mid the recovery act that saved us from a great depression i didn't see the map of america at the time nor did he in terms of blue states and red states. we only saw the united states of america. we worked with everyone, for everyone, and we recovered and rebuilt together as one nation vice president harris and i will
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do that all over again with an outstanding team they are red on day one. to it the united states senate, i hope those outstanding -- these outstanding nominees will receive a prompt hearing and that we will be able to work across the aisle in good faith, move forward as one country, so let's begin the work to heal, to unite, to rebuild an economy for all americans. they deserve and expect nothing less thank you. may god bless you, and may god protect our troops i now turn this over to the new team starting with our next secretary of treasury, janet yellen again, janet, thanks for accepting. appreciate i think they are going to clean this off for us here
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>> thank you, mr. president-elect and madam vice president-elect it's my great honor to have this opportunity to serve of you and the american people and to join this incredible economic team at this moment of great challenge for our country. the president-elect, when you reflect on what your father taught you about how a job is much more than a paycheck, i hear my own father who raised our family in working class brooklyn when he graduated from medical school during the great depression, he looked for a home
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and a place to hang his shingle near the brooklyn docks. back then bush terminal on the upper new york bay was a thriving hub for manufacturing and transportation, and for the union workers whose livelihoods depended on them knowing they didn't have cars, my father found a home near a bus line he started his family practice in the basement while we lived on the floors above. at the end of the day, he would talk to me, my brother and my mom about what work meant to his patients our friends and neighbors, especially if they lost a job, the financial problems, the family problems, the health problems, the loss of dignity and self-worth the value of work always stuck with me, so much so that i
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became an economist because i was concerned about the toll of unemployment on people, families and communities, and i've spent my career trying to make sure people can work and achieve the dignity and self-worth that comes with it. president-elect, i know you've done the same. i saw that understanding during the last great recession and the recovery act that followed, and now we're facing historic crises again. the pandemic and economic fallout that together have caused so much damage for so many and have had a disproportionate impact on the most vulnerable among us, lost lives, lost jobs, small businesses struggling to stay alive or closed for good so many people struggling to put
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food on the table and pay bills and rent it's an american tragedy, and it's essential that we move with urgency. inact will produce a self-reinforcing downturn causing yet more devastation, and we -- we risk missing the obligation to address deeper structural problems, inequality, stagnant wages, especially for workers who lack a college education. communities that have seen industry disappear with no good jobs replacing lost ones, racial disparities and pay. job opportunities, housing, food security and small business lending that denis wealth-building to communities of color, gender disparities that keep women out of the workforce and keep our economy from running at full force
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it's a convergence of tragedies that is not only economically unsustainable but one that betrays our commitment to giving every american an equal chance to get ahead, but i know this team will never give up that commitment as you've said before, president-elect, out of our collective pain as a nation we will find collective purpose to control the pandemic and build our economy back better than before to rebuild our infrastructure and create better jobs, to invest in our workforce, to advance racial equity and make sure the economic recovery includes everyone, to address the climate crisis with american ingenuity and american jobs. working together with the
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outstanding national security and foreign policy team you announced last week to help restore america's global leadership and above all we share your belief in the american dream of a society where each person with effort can rise to their potential and dream even bigger for their children i pledge as treasury secretary to work every day towards rebuilding that dream for all americans and to the great public servants of the treasury department i look forward to working with you and wally to rebuild the public trust to the american people we will be an institution that wakes up every morning thinking about you, your jobs, your paychecks, your struggles, your hopes, your
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dignity and your limitless potential. thank you. >> thank you >> quite a bit of focus there on family in the announcement here of the biden economic team as we watch them wiping down the podium as janet yellen speaking there addressing the president-elect but also very much addressing the american public as well, making the case that this economic team is going to be about family and about ultimately building back this economy as the vice president said, building back better a couple of interesting things to note there when we heard the former vice president and the president-elect joe biden talking, we got a little bit of an inkling there that maybe some concession to political reality when he talked about an economic relief package that could come between now and the end of the year in the so-called lame duck session. he said any package that comes in the lame duck session is
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likely to be just a start. nancy pelosi and house democrats have been pushing for a big bill in that lame duck session. biden there perhaps by my read anyway acknowledging that that might not be possible here with the political reality the way it is, and so saying that this is going to be a start, sort of a down payment politically on an economic team here, so a fascinating moment as this team, which has so much experience in dealing with the last financial crisis now prepares to deal with a financial cries, an economic crisis that doesn't come from the financial system that comes from a boy logical cries, entirely different crisis but a different set of figures in many ways i'll toss it back over to you. >> i'm owen javers in washington, thank you. >> let's get more on that package that president-elect biden spoke about just moments ago. let's gets to ylan mui also in washington monitoring the developments here on capitol hill as negotiations start again. ylan >> well, that's right, melissa
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this bipartisan proposal that we've seen from a group of lawmakers is really just a starting point for people to get back to the table. it's a $908 billion package that includes more than half of the money coming from repurposed funding from the cares act now, the breakdown of this package includes $16 of 0 billion for state and local governments. $288 billion for the paycheck protection program $45 billion for airlines and transportation and $16 billion for the vaccine and testing and tracing. this proposal would also extend unemployment benefits through the first quarter of next year and give more money to schools and also ensure that businesses could have some temporary liability protection the plan was put together by about 15 republicans and democrats from both the house and the senate they say that the leadership of both parties have been briefed on the plan as well as the white house, but democratic senator mark warner said not everybody is going to be happy with this, but there was good give and take
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with republicans now, it is clear, melissa, that there is growing demand from the incoming administration as well as from capitol hill for some type of additional relief that could pass alongside the government spending bill that would bet passed sometime next week, and we're hearing more lawmakers say that no one should leave washington until this gets done back for you. >> ylan, i'm kierious. how did you read president-elect biden's comments about a stimulus plan? i thought i heard no matter what is passed during a lame duck session, if anything is passed, there is a promise of more stimulus to come which i think would be very, very positive for the markets. >> yeah. i think that what we heard was him going permission to democrats to back away from that $2 trillion plan that they have held so fast to for so many months democrats are getting behind simple extensions of unemployment benefits. we saw this package today which draws back on some of their demands for the amount of money
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state and local governments would get, so this is a way for democrats to be able to pass something and do it quickly because there is a deadline here, and that way they can then turn to what the priorities of the next administration might be whether or not this actually gets done, whether it's a nearly trillion dollar package or just individual measures that could get bipartisan support remains to be seen, but i think democrats are timely acknowledging that the $2 trillion heroes act that they passed back in the spring is not going to see the light of day this year. >> i think that's a good waive putting it, ylan, permission to go with something smaller which would increase the chances of something getting done thank you so much. ylan mui in washington. >> a big bet made on beauty and department stores teaming up with sephora in hopes of driving more traffic during the economic boon. >> the beauty wars are really heating up
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like you said kohl's announced a ten-year deal with sephora this morning aiming to open 200 sephora locations within kohl's stores by about the fall of next year raising that up to more than850 locations by 2023. now this announcement comes on the heels of target just last month announcing its tie-up with alta beauty to open alta stores in more than 100 target locations. kohl's has also says it is plans to triple its sales in beauty in the coming years joining me now to discuss this deal are kohl's ceo michelle goss and john andre rogo thanks for being here with me today. michelle, my first is for you. why is now the right time for kohl's to make such a big bet in beauty, and walk us through exactly what this experience is going to look like when we visit a kohl's store. >> sure, lauren. great to see you i would say a couple of things first off, just a couple months ago we launched our new strategy we've had our sights set on
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beauty for some time, and with all the disruption that's happening in the retail industry we've really taken a step back and asaertd nserted a new strat being for all things active, casual and for wellness in families we'll make active and athleisure and beauty and then downsizing other categories we've had our sights set on beauty for some time kohl's as big as we are we're very underrepresented in beauty and yet we serve 65 million customers, 70 which are female, and they have been telling us they want a bigger bolder experience in beauty so we could not be more excited but to partner with the world's expert in beauty which is sephora, and i think combining the expansive reach that we bring, 1,1630 stars, 95% which are off mall, hugely convenient coupled with
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our omni channel presence and combine that with sephora's expertise and their loyal customers, we know that we're going to convert a lot of our own customers as well as attract millions of new customers and younger customers into kohl's, so this is a transformational partnership and deal, certainly for kohl's, would i say for both company, and then in practice you know, how that's going to work is we are building true shop and shop inside-of-kohl's typical store 190,000 square feet the sephora shop which will be in prime real estate in the front of the store will be about 2,500 square feet, so it will house many of the fantastic brands that you find at a sephora today. we're also doing something a little bit out of box which is we're branding one of our doors. most kohl's stores have two stores so it will be unmistakable that there is a sephora inside of kohl's and you'll see that from a distance so, again, we could not be more excited and pleased with the announcement that we shared today.
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>> thanks for all that additional detail. john andre, i wanted to toss to you as well, and this obviously is not your first time partnering with a big retailer back in 2006 you struck a deal with jc penney jc penney has since filed for bankruptcy during the pandemic, and they are in the process of emerging, but you will be cutting ties with them han moving out of those stores and now moving into kohl's why did kohl's make sense as the next partner for you >> well, lauren, as you know, sephora is the number one prestige beauty retailer in america and has been for a few years now. you know, we also obviously have a very large dotcom presence, and we have been delivering, you know, surprise and delight to consumers for a long time for very unique developments, for really expert beauty, you know, advisers our problem is reach you know, we have only 500 stores and most of them are in
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touchan centers, traditional malls, and we have not been able to reach, you know, consumers in american suburbia the way we would like it tonight. the reason that this deal is so great is we'll be able to leverage the extensive network of kohl's but more importantly the fact that their location is so convenient, you know, off malls, easy to park, easy to access that is going to be a blessing for our consumers to be able to discover sephora beauty in an easy, convenient way right next to where they live so for us it's a transformative deal we will triple the network of stores, in the next two or three years, and we'll be exclusive beauty retail on kohl' as you know, kohl's has done significant investments in dotcom and also last mile like curbside and we'll obviously leverage all of those
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investments to help sephora, so it's a partnership that will be very complementary very few of our stores overlap we are urban and they aremore suburban so it's a big win for kohl's consumers and sephora consumers. it's also a big win for us to get a much bigger reach across u.s. to a much broader consumer group. >> michelle, how should investors think about how you make money from this partnership in terms of revenue-sharing, from the products sold, in terms of cross-selling, in terms of whether you're capital gains tax and serving the existing customer base that you have or you will actually bring in other customers who will buy other items in your store? >> first, let's start with the beauty opportunity this is a true partnership we're both all in for a long-term commitment at least ten years, hopefully decades beyond that it, and so the economic mod sem a shared operating profit model, but on
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the sales side kohl's will book the revenue, own the inventory, et cetera, but from an operating profit we'll share in that we're hugely invested in each other's success which is fantastic, and in terms of it, you know, the long-term opportunity for kohl's, this is a tremendous opportunity for us to acquire new customers, new counselinger customers i do think it will absolutely resonate and convert our existing customers i mentioned 65 million customers and 70% which are women, and we're looking forward to converting those customers into being beauty buyers as well, but i think importantly all these new customers that we're going to bring in. we're going through a big transformation inside kohl's as well so we're looking forward to bring them not only into sephora but also into great kohl's customers over the long term. >> michelle, is i wanted to ask, you know, this announcement obviously comes in the thick of the holiday season and we just
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got through black friday and cyber monday what are you seeing in stores. the there was a large decline year over year in traffic in stores and on black friday and online as well how are you working through that hand any feedback from the weekend? >> yes, lauren so as we shared earlier in the month, we were really meegsed how we kicked off the holiday season like many retailers, we did a lot of things to move some that have demand up earlier as customers were telling us that they wanted to shop early. a lot of the categories trending going into the holiday season continue to do well, home, athletic, even toys for kohl's, and we're pleased that we we are seeing lots of customers shopping online and also coming to our stores. we still have a lot of big days and weeks ahead of us, so, lauren, i'll look forward to sharing those results when we're on the other side of the holiday season >> absolutely. thank you. well, thanks to kohl's ceo michelle gass and sephora ceo
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jean-aduran roegeot for joining us >> for more on the beauty deal, visit k.airbnb packs up and hits the road show a vote of confidence for door shsh and nasdaq's big diversity pu all of that coming up on today's edition of "rapid fire." the "the exchange" will be right back n my career. so when i heard about the applied digital skills courses, i'm thinking i can become more marketable. you don't need to be a computer expert to be great at this. these are skills lots of people can learn. i feel hopeful about the future now. ♪ i feel hopeful keeping your oysters growing while keeping your business growing has you swamped. (♪ )
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welcome back to "the exchange." let's get a quick check object markets. just off of the highs. the dow is up by a percent and s&p up 54 points and the nasdaq up 1.6%. all 11 s&p sectors, by the way, are higher right now led by communication services have, financial and technology okay let's gets to rapid fire and catch you up on a few stories that should be on your radar here with their dikes, dominic chu and deirdre bosa and bob pisani airbnb kick off its road show with the company filing an updated filing with the s.e.c. saying they would have a valuation of up to $35 valuation, topping its peak
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private valuation back in 201. airbnb took a big hit at the start of the pandemic but seemed to recover when people were looking for bigger spaces outside of the city. deirdre, what are the surprises here in the s-1? >> what are the surprises, i think just that incredible resilience we talked about this earlier, but that's certainly going to be sort of a buzzword surrounding the road show in the lead-up to the ipo, but airbnb was just hit so hard earlier this year, and the depths of the pandemic, brian checky, the ceo, laid off about a quarter of the staff, pulled back on some of its more ambitious projects like real estate and hotels, and i guess the most surprising thing would be that they were actually profitable for a moment this year amidst all at challenges that they have and the fact that they are going to be a going public in a valuation could be as high as $35 billion it's really at least the valuation has come full circle the business though still has
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some ways to go, so they will be making that case over the next few weeks and the lead out to that very anticipated ipo. >> bob, would i think that this is not a surprise and it would be well-received by these kinds of markets looking to go out on the risk spectrum with stocks at record highs. >> well, i think deirdre had it right. talk about timing, talk about the right ipo at the right movement this is it the 2021 story. this is the reopening story. this is the perfect moment for it what would have happened, deer drag, if it had been back in april? the last night of funding was $18 billion. that was the low part of the market now they are talking about a $35 billion. talk about timing. they always say ipos are about timing this is the perfect time, so 2021, are the reopening story, boy, did airbnb catch a wave right here. >> i would say both, an ipo for all seasons, ipo for pandemic times and post-pandemic time,
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people rented houses, want to be by a lake or in the mountains, not in new york city. >> that's probably reflected in the 35 billion valuation this is about timing, a timing issue for the company and for investors who are looking at this as an investment. how much more can you say is upside that is left if you have a valuation that is now in the private markets just about doubled at the high end of its range. i'm not sure investors will be saying is yes, i want the ipo but at any price i don't know what that price will be. it's certainly something when you have the renaissance ipo that you a showed, it's triple from the pandemic lows that's how hot the i'm control market is and that should breathe some caution. >> melissa. >> last word. >> this is one of the oldest
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unicorns around. talking about it going public for at least five years. yes, the timing worked out but some would have preferred to see this company go public years ago. >> next up, exxon is facing an historic write-down of up to $20 billion in nat gas properties and cutting spending to its lowest levels in 15 years as the company is aiming to protect its dividend exxon is still down more than 40% for its worst year ever, perhaps made worse by the stock's exit from the dow jones industrial average bob, is what is staggering is the amount of debt this company has. it's up to a 30% debt-to-capization ratio from 20% earlier this year, and i guess the question is that dividend, what happens to it >> yeah. this is as company that was about big spending, big capital expenditures and increasing the dividend every single year for years and years and now it's transitioned to a company that's a lot more cost cautious and
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they will cut capital expenditures, they are going to sell assets off and now they are talking about a stable dividend, so, wait a minute, big spenders, big increasing in the dividend, cutting spending, stable dividend the issue is the dividend and i think the question is enough -- they are cutting the capital expenditures a lot i think the street is betting that that may be enough so that that can cover the dividend without having to raise additional debt as you a referenced there if they can do that the street may be perfectly satisfied with a dividend where it is right now. certainly no more increases, but likely they are trying to signal unlikely to be cutting the dividend. >> that acquisition, dom, of xto way back when to get on the gas side of the business, so to speak, that's got to be one of the worst timed accusations in history, in any industry. >> it may not have been -- i guess timing, it couldn't have been -- it's not necessarily a bad timing question right now.
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the xto energy deal may have made sense may not have made sense the price they paid for it the natural gas explosion here in america has made america the swing producer of natural gas all over the world right now in addition to just about every other petro chemical you can think of with exxon bob mentioned the stable dividend. the stable dividend is one thing. time when i say "slightly", i mean a penny a share a quarter, that kind of thing. exxon and chevron are two of the oil majors out there that have consistently grown their dividend for 25 years. by the way, they're two oil majors in the u.s. there are oil majors around the world, their counterparts, light royal petroleum or bp have cut their dividends over time. door dash getting its first
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nod from wall street and it hasn't even gone public yet. the pandemic helps expand, a price target of $93. they are expected to go public next wednesday and price in the range of 75 to $85 a share talk about perfect timing for the perfect kind of stock, dierdre. >> again we just talked about airbnb. door dash will be an interesting one. this isn't an intirely new concepco -- entirely new concept but what is remarkable you asked me what the is surprising thing about the airbnb was the fact it showed
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profitability and the fact that uber is so far away from profit the in their food delivery business it's remarkable what the ceo has been able to grow their market share to 50% while the other guys are lagging somewhere in the 20s and they've really come up from behind by going into the smaller suburban markets that has been a really good strategy and certainly one that d.a. davidson pointed to in that note. >> can i be a debbie downer on this >> of course >> if 20-21 the airbnb story, isn't door dash the 2021 story am i looking at this wrong, dierdre? this company would have done better if it went public a year ago. >> a year ago we had no idea we'd be ordering everything in our lives online, including burritos and salads, bob
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so isn't if the time now >> it would have gone through the roof >> it's the sustainability that bob is pointing to a lot of investors will be asking about >> next up here, nasdaq is asking the sec's permission to require companies listed on its exchange to disclose their board's diversity. company will be required to have at least two diverse board members, one woman and one who identifies themselves as diverse. >> we think it will give women more confidence and in exchange we should play a role here at the end of the day, it is a matter of companies making their own decisions and disclosing and explaining to investors their decisions and letting investors determine what they want to do on the back of those decisions
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>> time, huh, dom? >> goldman sachs says they're not going to take companies public unless they have a diversion quotient in play here. this is a very big kind of move here by this whole thematic, sustainability government type of regime and has been for months if not years now. if companies cannot access public markets in as efficient a way as possible without being board diverse, that puts a huge hurdle for some of has to companies. it may be the act needed to open up the boards. melissa, it comes down to a choice that companies are going to make, choices that they make actively could open up moore doo - more doors for them down the line >> quick, bob. >> this is only the start of it. wait until you see the questions about the environment. you'll see a lot of questions about climate change.
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>> does the sec give the green light for climate change >> they're going to start saying not on the regulations, how are you thinking about climate change you ask questions and it makes the people on the other side say, huh, we should be doing something about this we should have a position. that's how you get action on this i'm nomt st saying on either si but you're going to see this happening. >> to recover from the pandemic, airlines need business travelers to fly again but with covid cases surging, how do you convince corporations it is safe phil lebeau joins us with more >> you give them a tour. that's how you convince travel managers it's safe to put their employees back on the road again. yesterday we're at boston's logan airport as delta was giving a tour to takata and the woman in charge of travel for takata, which is a japanese pharmaceutical firm. they take them down the jetway,
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on to the plane, show them how they're spraying down the plane, wiping down the plane, promoting social distancing they've given tours to 850 corporate clients and they believe this is the key to winning back corporate travele travelers. >> we've actually found that these airport tours have been a great way to showcase what we're doing and bring people out here and see it firsthand that really builds that confidence and shows them that there's actually a lot of things being done versus seeing an info graphic or just seeing it in writing. >> here's something in writing that is not good news for the airlines the current level of corporate travel down 85% according to last year. they believe post-pandemic it will be down 36% the trips do you technology, they say those aren't coming back and that's why many people, as you take a look at the shares of delta, many people believe it's going to take two to four years, even ed bastion at beltia has said it's going to take a
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while for that corporate travel to come back >> it seems they would first have to return to the office before they return to the airplane but we shall see, as they say. >> that does it for "the exchange." stick around for "power lunch. coming up we'll have a look at who could be first in line to get vaccines and why, right after this quick break i made a business out of my passion. i mean, who doesn't love obsessing over network security? all our techs are pros. they know exactly which parking lots have the strongest signal. i just don't have the bandwidth for more business. seriously, i don't have the bandwidth. glitchy video calls with regional offices? yeah, that's my thing. with at&t business, you do the things you love. our people and network will help do the things you don't. let's take care of business. at&t. keeping your oysters busihas you swamped. you need to hire. i need indeed indeed you do. the moment you sponsor a job on indeed
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welcome to "power lunch. i am jon fortt. the dow is less than a percent away from record levels. check out micron. and big technical players facebook and apple up almost 4%. and the centers for disease control meeting at this moment to determine who gets the vaccine first ones it is approved we're expecting a decision in the next couple of hours we got all those details "power lunch" starts right now


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