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tv   Closing Bell  CNBC  December 23, 2020 3:00pm-5:00pm EST

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year, tyler, of course, and if we do start to see the vaccines funnel through, that people will return to parks. >> there is no power lunch tomorrow it's a shortened holiday session of the we won't be here. i'm off next week. rahel and to all the viewers, have a wonderful holiday and new year thanks for watching. "closing bell" right now. >> thank you, rahel and tyler. i'm sarah isen with taylor in for wilfred frost again. one hour left of trade stocks shrugging off that new drama as a new wrench in the stimulus bill from congress. week ly jobless claims were better than expected spending and income both falling in the month of november
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energies leading the s&p higher as oil gets a boost with names like mayor than, diamond back. any close higher for the nasdaq is a record and we're on watch for a record for the russell 2000, which coincidentally past the 2,000 mark already. >> we'll have noted value investor scott black lay out his market predictions and give us two stock picks he likes at the levels we're at right now. home sales missing the mark for november we'll discuss the impact on the home improvement space with the ceo of angie home services, sarah. a lot coming up in the next couple of hours. >> all right we'll focus now on the big stories we're watching, mike santoli watching the market action as always kayla has the drama surrounding that new stimulus bill and meg
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tirrell on pfizer's new vaccine deal with the united states. mike, start us off with the market and the strength we're seeing, which is pretty broad right now. >> it is, and tilted toward those cyclical sectors that have sat out the last couple of weeks. largely flat around this range, hovering near the highs with some rotation underneath taking turns with different types of stocks, groups. it seems relatively healthy if not so energetic i think you can look at this as being the market just cooling off after that heated move from october 30th to the first week of december. however, while the s&p has been going sideways, look at these other subsectors of the market racing higher. i charted this since december 8th, which is the first day the s&p crossed above 3700 you can see very, very flat for the s&p, which is 75, 80% of the overall market value
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iclean, over 20% russell small cap growth, growth segment of the small cap market is up 9% in two weeks. arc innovation etf arc complex of etfs has been a juggernaut in terms of gathering assets, pushing the stocks and riding the great stocks. $18 billion in assets in this fund less than 2 billion at the beginning of this year they're 10, 12, 15% of some of the stocks they hold you have to wonder if some of this energy will get depleted. and a quick glimpse of sentiment, investment advisers every week, looking at the bulls and the bears. and a couple of weeks ago, moderate a little bit. still these are high levels by any stretch. back late 2017, early 2018, there was a sharp correction in the new year, january of 2018, when we did have similar momentum and sentiment conditions although not really a prediction just sort of sets the context
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for what you might not be surprised to see if, in fact, we hit an air pocket. >> the arc invest point is an interesting one. everyone thought kathy wood was crazy when he she came on our show, multiple shows, talking about tesla going up to, what, 7,000. people thought it was a crazy price target. >> i mngsed "the santa claustha rally. is that something you roll your eyes at it >> it gives you what the backdrop is, whether they're tail winds or headwinds. santa claus rally begins tomorrow, over that span hist y historically, i think you're up 77% of the time and it's one of the strongest stretches of seven trading days you'll have in the year a lot of that was piled up before people knew about this or front ran it
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you can't deny the fact that all else being equal you have an up ward impoetus for the next week in time. we'll move on to and and talk stimulus. president trump issuing an eleventh hour challenge to congress to strip provisions from the funding bill that for the most part his administration requested. he also called increase the level of direct checks to $2,000 a piece or else. house democrats immediately jumped at that last bit and are expecting to float a bill thursday morning there are a few different dead ends that could emerge number one, any member of the house could oppose it. number two, if it gets unanimous support in the house and passes there, any member of the senate could oppose it. if by miracle the president convinces all republicans in the house and senate to back this $500 billion add-on, it could
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pass both chambers but to even get to the house floor, it needs the support of gop leader kevin mccarthy, a key trump ally his office has not said whether he will stand with his party and block these higher dollar checks or stand with president trump and move them forward, not changing the $2 trillion 5,000-plus page bill would risk trump vetoing it, but in his message last night he didn't explicitly threaten a vito and there are votes to override him if he does he can also block it letting ten days lapse by signing it but unemployment benefits expire this saturday. the government shuts down monday all that would happen before the clock runs out on a so-called pocket veto, sara. even if he did do that, that would be detrimental to the republicans in the runoff elections in georgia, that have stood by the package that has both support in chambers
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there's a lot of dead ends it could run into. >> the market is shrugging it off, kayla the traders i've talked to, notes i've read this morning said we've gotten used to this trump style of negotiating, throwing a wrench in the last-minute effort to show that he is working for the american people, but that ultimately as far as investors are concerned, he's going to end up signing the bill and it's going to move forward. is that the right take is that what the upshot is here? >> i think so. it already has the support of both chambers. both chambers have already left town perhaps it's a measure to say i wanted more but if the house or senate can't gin up support for these higher dollar checks, at least president trump, in that scenario, could say i wanted this but i wasn't able to get it it still raises the question if the position of the white house was to have these higher dollar
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checks, why not do something like that in july and august when the political benefit that would have accrued to the white house and republicans would have possibly been greater? we'll see. sara >> and before mnuchin came on this week, to cnbc. >> exactly. >> to talk about how beneficial the stimulus version really was. >> exactly. turning now to the latest on the virus. cdc saying more than 1 million doses have been distributed thus far. meg tirrell has details for us how is this all going? >> reporter: they've finally reached this deal with pfizer. we've been hearing this back and forth with pfizer and the u.s. government around securing a second 100 million doses of pfizer/bi ontech vaccine delivering 70 million by the end of june, 30 million coming by the end of july. same as they paid for the first 100 million doses, almost $2
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billion. this adds to our supply of approved or authorized covid-19 vaccines we ordered 200 from moderna as well operation warp speed has set very aggressive target force rolling out the vaccines they said 21 million people should get their first dose in december, another in january and 50 million in february, guys we're starting to see timelines shift a little bit if you look at the update we just got from the cdc about how many doses have been distributed we're at 9.5 million distributed, 1 million administered so far. there's an operation warp speed meeting coming up in less than 30 minutes and bound to be
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questions about the pace of vaccinating people sara >> meg tirrerl, thank you. air bnb and doortash, take on those numbers, plus two new picks f s for the new year dow is up 216 points i will send out an army to find you in the middle of the darkest night it's true, i will rescue you oh, i will rescue you
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welcome back s&p 500 value etf negative for the year significantly underperforming the growth play. will value get back to black in 2021 delphi management founder and noted value investor scott black joins us now scott? it's been interesting to see values outperform in the last few months if you look at the best-performing sectors it's industry, russell 2000 up 30%. is it harder to found value these days >> it is more difficult.
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you can't ostensibly say lagged growth over that period doesn't deter delphi from doing what we normally do, buying to buy high return with strong balance sheets and strong cash flows. our average in the portfolio 12 times next year's earnings while s&p 500. >> well, by historical standard s, it's the multiple you have the lowest race you ever had in the post war year, as we all know, multiples run inversely to interest rates. the lower the interest rates you
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can justify higher pes and if you look at the top five stocks in the s&p, they account for 22% of the valuation truthfully the only one that's way out of whack would be ama n amazon, selling 75 times next year's earnings, which is a great company. microsoft is 32 times and alphabet and face book around 27 times. those are expensive, they have sustainable earning power and dominant franchises. the ipo market and what you referred to on cnbc as the stay-at-home stocks that have nose bleed valuations, the greater area of investing. >> i wanted to ask you about those, scott yes, lower interest rates might justify higher valuations overall but do they justify a 260 times multiple for door dash or 225 times multiple for palantichlt r? 625 times earnings for crowd
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strike where are investors even getting those numbers from >> i think it's a lot of euphoria built in. you cover the stocks they obviously have interesting niches and make for good dialogue on cnbc, but this is really ridiculous. these companies, including airbnb and snowflake all have market caps, 50 to $100 billion. many great companies that don't have capitalizes, anything close to that. otherwise on opening day or opening of the year, people are projecting much too far into the future i mean, they might be interesting ventures but they're certainly not good investments they're way overpriced for what they are. >> but isn't that what netflix and amazon taught us you don't have to have profits up front and there's a lot of hope in momentum and sales growth and growing market share, and total addressable markets and all the other things that have gone with that. >> we'll have to see if it
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translates into earnings longer term tesla, the sixth largest market cap if you backed out, you take out the tax credits, they earn nothing on an operating basis. yet it's bigger than berkshire hathaway so the jury is still out, whether tesla can generate the kind of earnings to sustain a $500, $600 billion market cap. >> wanted to get to some of your picks, scott you like dr horton, which i find interesting. we've seen the housing market very strong and, in fact, put today's numbers with recent numbers there's some questions about whether that's hit a peak. >> i don't think it's a peak we hit 1.55 million homes, recovery high since '08. i checked yesterday at the close. 30-year conventional mortgage is down 2.26% we haven't seen rates like that since 1950
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horton has had a straight-up record for years the average price per home is really only $300,000 they've already given guidance for next year that they should do somewhere between 24 and 25 billion in revenue at the midpoint and 24.5 billion, up 24% for the september fiscal, it's a $71 stock, selling at nine times earnings. we talk about the markets 22 times. the company returns 22% on equity very low leverage, especially for home builder the debt equity is .1. they generated about 1.13 billion in cash. it's well diversified geographically and segmenting the market basic core, horton, entry level express and the one for adult, people who are 65 and older that are moving out of bigger homes, which they call freedom. it's a very well-run company you know, nine times earnings, i
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think it's a real bargain. >> but i guess you do still have to have, scott, the view that the housing recovery continues new home sales up 841k, which is a big miss. >> i agree, but i can't -- some of the day is going to be lumpy, quarter to quarter but i still think there's a big pent-up demand for homes the other thing is, they've been well diversified they're smart. they have economies to scale in terms of purchasing power. between option land and own land they havea five-year inventory of land. they have a subdivision of a public company called four star, people who want to watch and look it up, which is a conduit for them to buy lots and cheaply and put them on the book as they need them. h orton has been a terrific company. the earnings have compounded double digits the last five years and i don't think you're going to see real break in earnings at horton. >> you have another value pick
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for 2021. >> yeah. >> pent-up demand for boats as well >> yeah. last year we got back to 280,000. this isn't a stay-at-home stock but a social distancing stock. i talked to people there's been a big demand for boats because people can go out on the water with two or three people and don't have to worry about being next to somebody in a crowd. marine max, ticker is hco, $36.50 stock 800 million market cap they had a very good year this past year, record earnings $3.42. we figure they'll be up about -- to 1.8 billion in revenue for the coming year and about $3.85 in earn iings, which puts this n at about 9.5 pe.
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they have no -- if you take -- they have more cash than debt. no financial risk. net debt is zero, generated just under 300 million in free cash last year. if you looked at brunswick -- >> but scott >> yeah? >> sorry to cut you off. i just wanted to tell people, this was a $7 stock in march this year. it's had quite a tremendous comeback. >> it has, but the stock is still cheap. we bought it more cheaply. still, you know, it's roughly 9 pe stock if you look at brunswick, basically their production schedule is accounted for in 2021, that's selling at four multiple points higher so is malibu boat. this company is the largest recreational boat seller in the united states. well diversified they have 77 locations and a wide swath or wide spectrum of boats that go from the cheap end all the way into the millions. two suppliers, brunswick
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supplier suppliers, with sea ray and boston whaler. at the high end they sell for an italian company. there's no financial risk. and i think you're going to continue to see the boat business continue to grow because it's one place where people can spend money, have a good time with family and not have to worry about covid-19 in a crowd. >> boats and homes scott black, thank you very much appreciate you joining us. always good to talk to you kayla, you've been working on breaking news coming out of washington. >> yeah. during the course of that interview, sara, president trump officially vetoed the national defense authorization act for 2021 that's the roughly $800 billion spending bill that was coupled with the coronavirus relief to essentially make the relief bill a must-pass. but president trump, in his letter to the house of
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representatives, says that he is returning without his approval this bill for two specific reasons. he says that he opposes the fact that the act would require the renaming of certain military installations, which he has been talking about for some time. and also that it fails to make any meaningful changes to section 230 of the communications decency act he has also been talking about this this, of course, is the liability shield that protects the content published by those large tech companies and has been the subject of several fairly politically charged hearings in washington in recent months recently, several republicans in the senate namely had been trying to call president trump's bluff on this, saying that the defense spending bill was not the place to be litigating section 230, to which president trump went after those specific republicans on twitter that he is saying he still feels that way and that for those two reasons, he is going to be vetoing or has already vetoed
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the ndaa and is sending it back to the drawing board in congress meanwhile, both chambers are home for the holidays already, only meeting in pro forma sessions, not robust enough to take up any specific business. we'll see whether leadership in either chamber will be calling back their members to address this sara >> kayla tausche, thank you. glad we have you here today. we'll speak to the co-founder of bark box about his company's upcoming listing and the pet boom is impacting sales. 35 minutes left of trade dow is up 216 points
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. up 250% this year, but competition may be nipping at its heels. bark is emerging with a spac called northern star acquisition
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group valuing bark at $1.6 billion, expected to close next year in the second quarter and will trade under the ticker, you guessed it, b-a-r-k. executive chairman of bark joins me now matt, it's great to see you. why now is spac the right vehicle for you guys where do you expect the market goes once people start going back to work >> sure. thanks for having me the quick answer to why spac or why now has to do with our partners we partnered in this with john ledecki, and joanna kohls, on the board of snap for five years, on the board of sonos, consumer products and marketing genius just bringing those two people into the company really propole pels our growth in a pretty
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significant way. it's really about great partners we always wanted to be a long-term, independent public company. we are on that route towards a more traditional ipo we found this to be a more efficient way that added to great, great partners, that add a lot of fire power. that opens up huge opportunities for growth next year and long into the future. >> i like that the biographic we just showed said you serve 1 million plus dogs. really don't we all just serve our dogs in all seriousness you have a million monthly active users, 360 million american households that have a dog. how quickly can you get from 1 million to scale up and what do you think the ceiling is for these monthly subscriptions? >> yeah. our mission is to serve all 63 million of those households of the 62 million more to go. and the mission there is just
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grow, grow, grow we've got a huge opportunity to do that in a few ways. first off, we're a highly capital efficient company. over the first nine years we raised $57 million through this process in about 30 days we've raised almost ten times that imagine what we can do when we have ten times the capital we've had over our full history and new product lines teed up. we've been serving toys and treats for 1.1 million subscribers, we are now moving into food, health, home products like beds and bowls. that opens up just huge product categories for us to go into we are the only brand that is creating products for all four of those categories, fun, food, home and health. and then in addition, 1.1 million subscribers are direct to consumer, direct to the home, we're also serving now 23,000
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retail doors like target, pet smart, petco, great partners costco as well as amazon, where there will be over $4 billion spent on dog products next year. and then that's just the u.s we're really, really thrilled where the whole world is obviously an opportunity and we brought in a new ceo 100 days ago today. 100 days joining us from amazon where he was the director of global e-commerce expansion that is the perfect person to take bark globally. >> i feel like part of what is so buzzy about your company, matt, is the actual toys themselves, the home alone chew toys, for instance so good. how do you come up with these and how much is social media helping to drive your success? a lot of them are really instagramab
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instagramable. trying to create stories and characters from the very beginning and then we put them out there. i think we've got -- this is capital here they're all instagramable and cool you've got -- i just heard the breaking news right before but we've got the dog-nald he grunts like a winner. he doesn't squeak. the most popular is consuela the cactus when the dog tears her apart, the dog finds another toy inside she's happy on the outside, sad on the inside. it's complicated they are designed with that intention, that they're going to go viral, if you will, out in the world. and i leave that i have to tell you, i leave that to our creative team i'm not that creative. >> well, i like the noise that they make.
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it's enough to make you go crazy. matt, you know, you talked about how pet adoptions are up this year spending is up 21% for pets. obviously people who are home have more time to take care of them we're asking executives from every sector, how does life change, how do your numbers change how do your earnings change once people start going back to the office now that we do see this light at the end of the tunnel for the economy this spring? do people spend less on their pets because they're not around them all the time? >> no and i'm thrilled we're going back, it looks like, as you said, this year. i'm happy about that we've had great growth leading up to this certainly had that weekend at our back this year growth opportunity for us was in the new categories like food, where we have bark eats of the we've been running this in columbus, ohio, for about a year trialed a great service.
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and the food market is $25 billion to spend here in the u.s. it's a huge growth accelerant. what we do, we know our customers so well, we talked to a quarter over those 1.1 million subscribers every month. we take that information that we learn from them and then we cross sell and introduce them to new product like food. this opens up our opportunity much, much bigger. the other thing is everything that we sell, we make. it's ours. we enjoy a healthy gross margin of 60% or higher that allows us to take a lot of that and fuel it into marketing and growth and then finally, i love the subscription model we're carrying all of this growth forward with us in the next year it's highly predictable but it gives us so much data to get smarter and make better products like you just saw there. >> matt, thank you for joining us
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we will keep an eye on it. matt meeker, co-founder of bark box and executive chairman. >> time now for a cnbc news update with sue herera. >> hi, sara. at this hour, andrew yang is running for mayor of new york city election officials have confirmed he filed the paperwork. two recent polls show him leading the field that includes at least 35 candidates. ohio's supreme court has upheld the arrest of a man for holding his gun while intoxicated in his own home. prosecutors argued that the man scared his wife enough that she felt compelled enough to call police. in england, scuffles broke out when police tried to clear a route for health workers going to test truckers waiting to return to continental europe multiple testing units have been set up but the process is still expected to take days to complete. and in the southern atlantic, a massive iceberg continues to break up into smaller pieces still the largest is nearly as
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big as rhode island. the fragments continue to threaten wildlife on the nearby island of south georgia. you are up-to-date that's the news update, sara back to you. >> sue, thank you. still ahead on the show, ceo of mmt bank joins us for outlook for financials next year and whether more regional mma is on the horizon. check on bonds for you yields are higher in the session. better jobless claims and durable goods, though not as great as personal income and spending numbers ten-year yield, 9.51 it's a thirteen-hour flight, that's not a weekend trip.
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very unusual in its structure. what's happening two asset managers are merging and going public blue owl
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capital and makes it pigger than soon-to-be carlisle group, $1 billion in assets and crows some time in the first half of next year blank check company behind it is altomar, which already had another successful spac deal on 3d printing. some of the takeaways, all very 2020, credit markets and entire capital markets are strong spacs are all the rage this is a pretty creative and very complicated one it is a spin-out, a merger and a spac all in one deal maybe two complex for a traditional ipo. this way, the way they went about it in this market, they managed to raise more than $1.5 billion for investors, kayla. >> the fact that $1.5 billion is available for spac investors despite all the money raiseed through spacs is mind blowing this year of the what an
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interesting story. up next on "closing bell" nearly 1 billion hotel rooms have gone unsold year to date. the rks demaetunr most distress. that's on the other side of this break. i'm going to start the bidding at $5. thank you, sir. looking for $6. $6 over there! do i hear 7? $7 in the front! $7 going once. going twice. sold to the onion lover in the front row! next up is lot number 17, a spinach and artichoke dip, beautifully set in a hollowed-out loaf of sourdough bread. don't get mad get e*trade and get more than just trading investing. banking. guidance.
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the global pandemic putting brakes on travel this year with nearly 1 billion hotel rooms going unsold year to date. seema mody has more on that story. what do you know >> it's a starting number. 980 million hotel rooms unsold in 2020. it's why so many high profile hotels have had to shut their door this is year. in new york, hilton times square and the roosevelt and midtown among others in total, nearly 40% of hotels in midtown manhattan have fallen behind on debt payments. the key question now, how quickly will travel rebound with a vaccine. 5,000 to 10,000 people have been surveyed on a regular basis and found in the last couple of weeks more people are texpected to travel.
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ritholtz wealth management hey, josh. russell 2000 on track to close at record highs. the bank action is notable today, goldman sachs up another 3%, leading the dow. so is jp morgan. these stocks are up 5%, 6% for the week there's a newfound enthusiasm after the stress test and green light on the buybacks. is it enticing to you in. >> yeah. so i'm in jp morgan. i've never been overly excited about this group but i did want to have exposure i was having a conversation with john roque, who i think has been on this show before, and he's really excited about the banks, too. basically the way we're look at it, it's one big yield curve steepening play. so, if you've watched the yield curve and watch the reopen, that's the only two things the banks need right now make more money on what they will lend and have more demand, more consumer demand mortgage demand, no problem. but really a full reopening of
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the economy and people looking to spend on credit cards again, et cetera. so that appears to be what's driving this trade and i'm happy. like i'm in some of these names. i think it's notable, though, you did not need the next generation financials to sell off. there was no rotation necessary. you're still getting new highs out of the squares and the paypals of the world so really everything financial is working right now with few exceptions and i think the next stop to break out -- that's really what i'm here for, right? berkshire hathaway is pennies away from coming back to that february 2020 high one of the few names that hasn't gotten back above that of large cap stocks it's right there when it does take that out, there are no sellers and it's not that the company has like this run away business in financial anything it's just that it's a very, very
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large financial with tons of optionality, given all the cash on the balance sheet 140 billion, 200 billion stock securities portfolio lot of big holdings in some key stocks that's the next one to go. i think it can go this week or next week. >> that flashy, fledgling start-up, berkshire hathaway josh brown is calling for. >> underdog. >> totally do you think that as far as the old lying banks go, do you think that some of the recovery in the economy is enough to offset what we're expecting to be an extremely long period of low interest rates that will hurt their net interest margins josh, ool throw that question to you since you were just talking up the banks. >> well, look, the fed is going to keep its boot on the overnight rate and you're seeing a rise in the ten year i think we're at year ly highs
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for that spread. that's all you really have to focus on if you go ahead and take a look at a chart of swrchlt p morgan, spreads are better now but the stock price is lower now versus last december, january period. it makes no sense. these banks should catch up. swrchlt p morgan will buy that stock, buy backs of v of a that will happen next year plus a lot of possibility, loan lost reserves that turned out to be unnecessary rather than a wave of bankruptcies this year, the fed and treasury worked together to just put money out there. so, a lot of that money that was set aside for big losses may be unnecessary. you might see that comeback to shareholders as well so i think that's what's fueling the sector it makes a lot of sense to me. i think it can have legs i think a steepening yield curve is probably not a bad call for the first half of next year.
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>> all right volkswagen ceo responding to apple's alleged foray, linkedin comment, he said apple's virtually unlimited resources make it an even greater competitor than the likes of toyota volkswagen ceo adds the most valuable company in the world could be an automaker, whether it be tesla, apple or volkswagen shares of tesla down 7% so far this week as it enters the s&p 500. mike, what do you think the ceo of volkswagen was intending with this post? do you think he was trying to be snapped up by apple, get on tim cook's radar >> i would doubt he would think that's realistic, because it probably isn't strikes me as somewhat realistic also in the sense that who knows, down the road if you do have dominant providers, dominant manufacturers with massive access to extremely cheap capital, then the auto sector is one that, in theory,
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could become much bigger in equity market cap than it it used to be gm used to be the biggest stock in the world it's not that crazy. we don't know apple's intentions here but they borrow at government-like yields there's $100 billion or so in net cash on the balance sheet or any given moment yes, they can muscle their way it doesn't mean they can own the industry soon. i think it is fascinating that all this talk about whether apple could have, should have or might have acquired tesla as elon musk suggested, down the road, i don't think that's the point here if tesla makes any sense at 600 billion, theoverall market has to be so massive which is probably why apple feels perhaps it can't ignore it as a direct player. >> tesla up .8%. still having a down week in the s&p. shares of nikola falling after the company announced its deal with republic services to
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develop electric garbage trucks was canceled, citing longer than expected development time due to a combination of new technologies and design concepts as well as unexpected costs for parting ways nikola founder trevor milton weighing in on the significance of the deal back when it was first announced in august. remember this? >> it's a fully executed contract it's worth about -- between $1 and $2 billion they have the right -- they're obligated to buy up to 2500 of these electric trash trucks and have the option to go up to 5,000. it depends on how many they end up picking up, but ultimately the agreement is for at least a minimum of 2500 trucks, biggest order in history for ev. >> news flow seems to go from bad to worse for nikola, josh, down .6% still opportunity here on the short side, on the long side perhaps? >> i'm not good enough to short stocks like professionally
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i'm not doing that this is a clown car and continues to be. and i don't really quite understand how it has a $5 billion market cap like i don't think that anyone is like sticking up for them in terms of their technology at this point, and nobody thinks that any of their partnerships are going to be money good, or at least executed at the same level they originally announced that so i think if interest rates were normalized and this were not a market selling at 25 times earnings and people weren't doing 400 separate spac deals this year, things like this would be crushed to a much greater degree than it already has been for some reason, though, there's still money in this. and i just don't get it. maybe there's something i don't know >> mike, do you think that's the right call valuation cut in half over just the last month stock down 10% today do you think the numbers justify
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th that. >> there's not a business here really there's a plan, a link to some technology. >> i have plans. >> what i think it tells you, interestingly, though, is the fact that all of these -- even very tentative agreements that nikola was able to strike with gm, basically a supply deal in exchange for equity, which has now gone away and this tentative from public services, it shows you the established companies feeling a need to grab at anybody that seems like they can offer access to this emerging part of the industry and this emerging market. tess a shotgun approach. the market right now is just buying stories and then paying up more for them tomorrow even though the story hasn't changed. that is what's happening and that is the back drop for why nikola can have a billion dollar market. >> energy stocks surging with xle having its best day in nearly three weeks dom chu has a look at what's
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driving the sector higher. >> kayla, from new energy to old energy, right?performing sect y energy, and the big driver has been rebound, especially in the last couple of months, covid vaccine front have driven optimism over the global economy. since the end of october, u.s. benchmark crude futures have gone up roughly 35%, making oil and gas stocks star performers during that can and you cannot mention the upswings without the big downside story the sector is still down a whopping 36% on a year-to-date basis. that means, guys, it has a lot of ground to try to make up in the coming months. back over to you. >> top performer for the mo month and the last three months. two months to go in the trading
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day. mike, market internals with nasdaq and russell. >> outperforming s&p look at the volumes split in the new york stock exchange, 2.5 million shares to the upside versus 7.5 million on the downside take a look, too, as russell 1,000 value versus growth. today value is up 1% growth is is doing nothing week to date they're flat. this is not a market that's necessarily saying this is one or the other for rotating around and staying still, volatility index. just to check in on this, holiday closures come ug up. volatility should get a little bette of a decline 22.8 right now should be going lower, all things equal, sara. >> 30 seconds left of trade. dow off session highs up 140
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points the banks are taking the lead today. spa 500 is higher. it's higher for the first time in the last four days. the nasdaq lower it tonight look like we will get that record close. russell 2000, index of small companies the star of the show chosing at a new record high also hit an intra-day record high today and crossed that 2,000 mark for the first time ever, kayla. >> welcome to "closing bell" i'm kayla tausche in for wilfred frost, along with sara isen. mike santoli is here as well the dow is up 113 points, oscillated between gains and losses the last ten days s&p 500 closing up by just about three months and then you have
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nasdaq, down about 37%, barely missing a new record close there. we did see the close at a new record high. the standout index of the day. coming up on "closing bell," ceo with the outlook on his industry and new stimulus bill washington josh brown from ritholtz wealth management is still with us. well-go bark first to mike san toli can we include that momentum back >> and pockets of this market. adrin lynn and injury in the trendy and small stocks.
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it looks like basically it will run the tank empty overbought, technically, as tp ever been. it has this remarkable one, doubled off the lows this year it can be owned as an etf. it's not like you have to buy a basket of little stocks out there. i think the overall market showed you a little bit of -- not so much listless, but some fatigue to the end we should be seeing rebalancing and roegs markets absorbed that really well on a broad level there's push/pull underneath the surface here has everybody gotten positioned and priced in the good stuff in the economy that almost everyone is expecting right now we have to see the verdict on that as the weeks play out. >> and we ask it every single day. >> yeah. >> as the market pushes higher. >> market is flat in the last like 2 1/2 weeks
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sideways is good after you've had a good run. >> russell has gone up. >> that might be one of the reasons it might be flat. >> how about wee call it even. ele inform a, you mentioned 2.5 billion. how are you positioned now after a lot of good news in the market >> yes, absolutely we continue to be overweight real assets. we think kind of the biggest, you know, risk to what mike was just saying, that maybe people are now taking into consideration is the potential of rising inflation, right balance of risk in terms of inflation has shifted. instead of globalization, we have a push for deglobalization. how much more productivity can we get from automation, and you have central banks telling us they're going to let inflation
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rise uh-uh have a huge amount of debt that all the countries have had to take to help with, you know, the pandemic for us it's been portfolios, to with sustained inflammation. we bought gold back in march we continued with that positioning. back be when we rebalanced portfolios, we would love to add to base metals in a backup right now we're kind of standing guard. >> josh, what do you think of that, positioning for inflation? >> look, if you say we're not going to have just where we are right now on cpi, it's either got to be lower or higher, obviously i would say higher i think it's the good kind of inflation where employers go to their employees and demand to be paid more. we saw one of the most interesting results of the election that we just saw was in red states where they went for trump. they also went for state-wide
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minimum wage hikes you don't see that very often. these aren't socialists. these are just people saying guy, i can't live this way of the a combination of companies like amazon, walmart and target doing more for their employees, plus i think 12 or 13 individual states this year raising their minimum wage after several other states have been doing that. i think you will get that type of inflation i don't know that there's a great read-through from that to like base metals i could be wrong for me i want to be long stocks, reets historically, the best guard against inflation unless things get totally out of control, which i don't expect. >> what about small caps, elena? they outperform on days technology does well and where cyclicals and value.
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>> we have added, back in march, because the index didn't have that and we thought it would come back as we got the recovery on covid we're not adding to it right now. i think just the general theme of recovery trades, right? you look at the russell, it's been amazing the turnaround that it has had with all the reasoning behind it and now it's erroring. we have looked at other sectors and added that to portfolios, such as leisure and hospitality, just getting them ready for post-covid recovery. >> we'll pause there for a second and talk a little bit more about the markets and the opportunity for stimulus on the other side of this first the latest on the stimulus bill, after president trump asked congress late yesterday to
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increase the level of direct checks checks to adults to $2,000 house democrats jumped at that, but it's unclear whether house republicans will support that to put it up for a vote it would need to pass the house and senate with unanimous support, nothing short of herculean, based on the wide range of ideas on this issue senate republicans, general unease after adding $500 billion more to the bill whether he would sign this $2 trillion bill that combines government spending through september with this relief package. he has another winkle following through on a fairly well telegraphed veet owe threat to veto a defense bill because it remaims monuments and didn't
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reveal protections for tech content companies. i got off the phone with the senior gop aide who says the house is expected to vote to override the ve. to december 28th as far as the larger $2 trillion package, there's still a question over whether addressing the president's concerns could work through any poe sengs veto or pocket veto threat there. will he see. when you look at how they've been expected this money to flow, how much does it become a by nary event where you have $200 or $600 in people's pockets or you have benefits lapse this saturday and people are hurting even more. >> certainly the direction of surprise would be nothing or indefinite delay of any support
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checks going out and the expiration of those benefits clearly that's not where the market is positioned for 600 versus 2,000, there's a premise here there is going to be more money that's going to be flowing in the coming weeks, that's going to help things out and buffer whatever weakness we have in the winter i wonder if there's a larger inference that can be made here that both sides, both parties have now, at least by their actions, essentially given some kind of approval to massive fiscal capacity and have money spent by people in the country it's just something that wasn't necessarily the case a few years ago, and does that change political equation and policy mix for the coming administration very difficult to say. i think the market is comfortable with where fiscal situation is right now again, if there is indefinite delay, it becomes something that really falls by the wayside, that's definitely a negative surprise. >> josh, the market shrugged off the president's latest curveball
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over the stimulus, assuming -- other washington smart people are saying assuming he will end up signing the bill. what if he doesn't what if the stimulus bill falls apart at a time when they run out? will investors respond to that >> all right so i hate saying this out loud investors will probably react to it for two days and whatever they sealed they'll take their money market funds and buy something new. they'll panic at microsoft and go buy netflix the real is that the people hardest hit right now, this winter, from the covid, from the pandemic, don't have a lot of money invested in the market traditionally. we have got to get them help noter ben pets from spacs. but what had the market do the
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market literal is whistling past these people every day i don't think it will do much. i hate that that's the truth but it is. one point i would make, though, the market has been right to look past a lot of this stuff because, to mike's point, directionally, something is going to happen. and if we have to wait four weeks into january it's not great, it's not optimal. it's also not totally the end of the world. i have a combination of just not being thrilled with the fact that there's a political debate but also respecting the market's ability to say okay, we'll talk about it in two weeks. >> josh brown, getting a lot of -- i think i would say rave reviews for the get-up today, the fashion choice on the mint sweater. nice look. thank you for joining us elena hernandez, thank you for joining us as well always good to have you. >> thank you for having me. members of operation warp speed have been holding a briefing meg tirrell with the highlights.
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we were having some audio issues there, meg, which is why we didn't take you there. what were highlights in the news >> we got an update on how many doses were supposed to go out of moderna and pfizer's vaccines next week and the week after allocations will be 4.67 million doses, 2.67 million of pfizer's vaccine and 2 million doses of moderna's vaccine. that will be on top of the 5.9 million that went out this week, from moderna and the 2 million to pfizer and last week, 2.9 million. the week after that, they should be sending out 4.5 million doses, stretching into the first week of january there. that is slightly behind schedule they've been planning on 20 million in the month of december also asking about the pace of vaccination. more than 1 million people have received their shot in the
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united states. operation of warp speed said that's a little slower in terms of pace there. he also gave a development update say iing on johnson & & johnson trial is is fully enrolled and is expecting emergency use filing in late january, early february. astrazeneca shortly after that the vac is in talks in the u.s. for its phase three trial. that's been pushed back a couple of times but they're hoping to start that soon. that would add to the supply next year. sara >> meg, i have a question for you. just about this whole of government approach to launch a campaign to get people to take this vaccine that's the next hurdle once these vaccines are distributed is there any sign public opinion
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has changed after two weeks where we've seen so many public officials on both sides of the aisle receiving this vaccine >> i haven't seen if there's been a poll so recently as to try to take into account that people like dr. fauci have received their shot, for example. but we did see people's improvement in wanting to get the vaccine with the trials so positive at 95%. some health care workers absolutely over the moon excited to get these shots, and that's the majority of what we hear but there are places where there's skepticism and there are doctors who are hesitant in trying to get this shot. that's an uphill battle and something we'll continue to see getting worked on as these vaccines get rolled out. >> the highlight of my week has been my friends who are doctors sending me picture, emotional pictures of them receiving the vaccine. i just got one as we speak from
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my ob. that's been nice to see. meg, thank you meg tirrell. coming up, stressed out. m & t bank ceo on why they had to raise tirhe buffer on the latest stress test what that means when we're back in 90 seconds. we want both - we want a hybrid. so do banks. that's why they're going hybrid with ibm. a hybrid cloud approach helps them personalize experiences with watson ai while helping keep data secure. ♪ ♪ from banking to manufacturing, businesses are going with a smarter hybrid cloud, using the tools, platform and expertise of ibm. ♪ ♪
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key corp region financial and fifth third bank on the heels of last week's stress test results with the fed announcing it will allow share buy banks to resume in q1 of 2021. one bank seeing attention is m & t bank some analysts calling them a negative standout. joining us now to talk about that and a whole lot more, in a cnbc exclusive, rene jones great to have you here again what's the takeaway? why are analysts saying m & t didn't do as well because of some of your real estate exposure to the rest of the banks? >> thanks, sara. i guess i would start by saying overall the stress tests were really positive, because, you know, the fed designed a really, really tough test, designed to get the most stress points in the economy today, the real estate is among the most stressed areas and the results were strong. it showed how strong the banking industry was you know, i have to start also by talking that, you know, we probably have the strongest
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underwriting performance over the last four decades. and why the test was relevant to us is we have about 5% of our loan book in retail and about 4% of it in the hotel space and it's a lot of discussion about the more dens, urban areas. of course, getting covid for us in new york city, in both retail and hotel combined, it's about 2% of our loan book. we've been there for a long time we tend to be relatively conservative underwriter in those books, for example, where loan devalues of about 43% think of it this way in the properties and our customers carry more than 50% in cash, ownership of those entities so, we believe that over time what we've learned is that they behave differently than if they were funded by capital markets overtime what the fed did was they -- >> so -- >> go ahead, sara. >> oh, no.
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i wanted you to finish but also if you could, tell us if any buybacks are planned in the capital resubmission. >> it's one of the interesting things, that, you know, different from the model, if you look at our actual financial performance, this year will probably be one of a few banks that covers its cost to capital this year. we're a very profitable bank so by the fed's rules, we probably have the strongest ability to distribute capital come i coming out of this because we remain really profitable throughout the course of 2020. you know, we'll have to decide what we actually do with that. we do have that ability. y and i think it's a critical asset. >> of course, the personnel of the fed might change in the next 12 months or so. randy quarrels' term is set to expire and jay powell after that when it comes to federal regulation, to undo the
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overreach of the post-crisis era and provide a light regulatory touch to allow banks to participate in the market xwen i'm wondering, based on what you've seen on the personnel front from the biden administration so far what you think their approach to financial regulation will be and whether they'll continue to allow some of this stuff that has been beneficial for your sector to continue >> i guess the way i think about it, sara, i have to go back a little bit think about where we are in the great financial crisis, there's extraordinary amount of tightening regulation. we had to reshape, and restrengthen the financial system it probably needs to be right si sized. really what's happen ed is we'v been much more effective, and a great example of that is when you think about the new
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proposals around cra and the way in which the fed engaged in that, to help, you know, modernize that system to help low and moderate income neighborhoods, there's been a lot of innovation in that space. i expect that around social issues to continue i think the banking system and the banking leadership today say lot different than it was probably a decade ago. and most of us are leaning into those spaces as well i do expect to see some of the issues over the last five years or so maybe re-emerge i think they'll have a different twist around social justice, hitting low and moderate income communities, which is really what's needed. and we've changed our operating models to make sure we serve those communities. >> rene, i know you've been very focus on small business pain as a lot of banks have. in this new stimulus legislation, if it does ultimately pass, 284 billion is allocated. is that enough
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what is the state of small business in your regions >> one of the things that we've seen is monetary policy, fiscal policy has been really, really effective. maybe more effective than we thought. and i think that's why, you know, this current stimulus bill is so widely sought after. because if you think about it, we really need -- with the increase in the virus that happened in the fall and the lack of more stimulus, there was a lot of uncertainty around restaurants, entertainment, gyms and a number of those small businesses most of whichply less than 50 people and so the idea that this came out and can serve as a critical bridge between today and when the vaccines get fully distributed is really, really powerful what i also like is they've honed it in and targeted it relative to the past so there's a preference to meet
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the needs of underserved communities. we already have things like borrower certifications that allow the banking system to move much faster. we are the fifth largest sba lender in the united states, even though we only operate in about seven states so this space is really, really important to us. and i think, you know, we saw firsthand what it meant to actually go out and sit across from the kitchen table with some of these individuals and allow them to be able to get their ppp loans that would allow them to continue to employ their employees. >> right. >> i think something like -- we gave out about 35,000 ppp loans in the first round, over 7 billion. and 92% of that went to small businesses that employed less than 50 people. >> interesting they call it relationship lending for a reason and there's going to be a lot more to go around.
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284 billion in ppp in that new stimulus bill if it crosses the finish line. for now, rene, we have to leave it there rene jones, ceo of m & t bank. >> thanks. happy holidays. >> same to you. after the break, the s&p 500 is now up more than 60% from the march lows where does the rally go from here mike santoli breaks down a chart that could provide an answer how is that for a tease? as a reminder, you can always watch or listen to us live on 'lbeig bppund the cnbc a wel rhtack. in a land not so far away,
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will the bulls continue to run the market next year let's send it over to mike santoli, taking a closer look at that chart. >> hey, kayla. march 23rd of this year, from time to time we take a look at how those ramp off those lows, greatest bull markets from all time after nine months, here in blue is the current example very, very close to what happened after the 2009 bottom and that run into 2010 and then 1982, and the beginning of that really incredible 80s into 90s
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run. what happens next? the general rule is that there's been moderation of gains, some chop, some corrective opportunity. in 2009 we did run higher here into sort of a higher level in 2010 before giving some back and, of course, none of this is scripted we don't know anything in advance. it's logical to think after you've had 60% in nine months you might have more back and forth action the fed policy, all the other stuff is distinct now, versus other times. i think it makes sense to understand just in general how markets have metabolized moves like we've just seen guys >> it shows how early on we are in that chart in the long run, mike. >> one hopes, exactly. >> yeah. mike, thank you. it's the clash of the tech titans meanwhile apple announcing an update to its privacy policy, allowing iphone users to decide if they want to share their data for advertising purposes facebook, coming out as a
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staunch critic, launching a campaign against the policy, saying it would crush small businesses that rely on targeting advertising to reach its customers. this marks just the latest in a long string of battles between the tech giants. for more, let's bring in cnbc's kovak. gentlemen, good to see both of you. gentlemen, i'll go to you first. when did the feud between zuckerberg and cook start, and this just the latesti iteration of that? >> exactly, that's right this goes back, kayla, to the beginning and infancy of the iphone, when people are still trying to figure out how are we going to use the internet on these devices? you had apple's view that it should be app centric, this curated app store with privacy controls and each app that goes through apple is approved before a user can actually download it. on the other side you have
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facebook's view with an open web view and wild west view that everything should be free and supported by ads, which is obviously facebook's business model. that's just accelerated through the years to where we get where we are today where the two are beefing over this privacy rule where facebook says this can really affect people's abilities to advertise on facebook and across the iphone and apple is saying that's still allowed but you just have to get permission first. >> it's interesting that zuckerberg is coming out swinging so hard against this initiative, in particular, because hasn't this been what washington has been asking these tech companies for, for all this time you need to be more transparent with your users and your customers about where exactly you're tracking them and picking up their data? and shouldn't zuckerberg be on the side of supporting that, if he is truly in favor of transparency and regulation of these companies?
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>> yeah, exactly i mean, if anything, this is just another example of facebook's congenital inability to read the room under anti-trust investigation it's been sued by the federal government in virtually every state in the union and all they're asking -- this change -- facebook is billing it as almost like a nuclear bomb being detonated on the internet as we know it when really all they're trying to do is make explicit, what for years has been unspoken, this idea that, okay, we will give you this product for free in exchange, we collect your data to serve ads. theoretically, there should not be a problem here. of course, facebook knows that faced with that bold, stark statement, do you want to be tracked, most people will say no.
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>> steve, what's really going on here what are both ceos after they're obviously fighting their own anti-trust battles for regulation that's friendly to them why the tension? why has it reached a boiling point right now? >> that's what we're trying to understand, what's the end game for facebook launching this campaign oouf been talking to people on the company and both sides of the issue and no one can understand why they're doing this it can be a distraction for their own anti-trust levels and it's a deep irony here that facebook is saying apple is abusing its market power for their -- apple's decision here is going to crush small businesses who thrive by advertising on facebook. the problem here is that argument exposes facebook's own market power facebook is the only game in town for the small businesses to
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advertise. if facebook had a viable competitor, this apple change wouldn't matter to those advertisers. and i think that's getting lost in this whole debate. >> yeah. and facebook has now built a model that depends on those small businesses advertising danny, you raise the point that tim cook has raised many times, which is if you are not paying for the product, you are the product. so, it sounds like if facebook were to strip ads from its platform and charge users to use the platform, that wouldn't necessarily solve the issue. what do you think, danny >> exactly this is a fight between two of the biggest landlords on the internet and what they're doing is trading insults over how they extract rent from each of us of course, apple is also under investigation. they're not saints here they control the app economy. 2 million plus apps. every cent of the money that flows through that system, apple takes 30% cut. that is being investigated and facebook, you know, it goes
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back to this unspoken bargain. by bringing -- by shining light on to it, you are really calling into question, you know, the whole diface on which this empire is built and that's what's scary for facebook. >> we'll leave it there. it tonight sound like it's the end of the story steve and danny, thank you so much check out steve's new piece on right now. still ahead, private equity firms are trying to cash in on the commerce boom this holiday season it's not purchasing retailers. what is on their shopping list instead later on "closing bell". it's been a tough year.
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new details about moderna's vaccine. uk variant will mean to the vaccines moderna putting out a statement essentially saying because it covers the entire spike protein on the coronavirus, the protection that it provides is broad. now it says that it plans to run tests to ssessentially confirm t vaccine that it should still be protective against the uk variant. based on the data today, it expects the immunity would be protective against the variants in the uk.
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this is similar to what we've been hearing from biontech and pfizer and expectations from the scientific community as a whole. because vaccines provide sort of broad protection, not just to one area on the spike protein where you might see this potential mutation, we should not expect these vaccines not to work, for example. but it will be a few weeks till we see definitive answers from tests on these questions guys >> good news for multiple reasons but also because a lot of experts say that variant is already here in the u.s. meg, thank you meg tirrell with the moderna news. still ahead, trouble on the home front new and existing home sales disappointing for november, raising concerns about the housing market we'll discuss that and what it means for home improvement and industries as a whe tholwi the ceo of angi home services after this break
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time now for cnbc news update with sue herera sue? >> thanks so much, kayla good to see you. a federal judge has blocked a trump administration rule aimed at lowering drug prices from taking effect on january 1st the judge ruled that the public had not been given a chance to
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comment on those changes before they were implemented. in new york, health officials are working obje inin that would allow some buffalo bills fans to attend their team's first playoff game in more than two decades. 6600 is the number of fans being looked at. all, of course, would need to be tested beforehand, wear masks and socially distance during the game. new more virulent strain of the coronavirus is been detected in northern ireland. on a lighter, happier note, in australia, some baby animals celebrating their first holiday season this koala joey is nameed pipsqueak, enjoying a nibble while surrounded by two tasmanian devil joeys having a good time there. that's the news update
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back to you. >> sue herera. weak data, angi home svierces on what it will mean for home improvement projects we'll be right back.
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super drop from what analysts were expecting short housing supply and record low interest rates, which has fueled the market. and keeping folks indoors more money is going toward keeping people's homes up. on average, $13,000, up four grand from last year, have been spent on home improvement. joining us now is brandon residenhour, ceo of angi home services is it still keeping up at the pace that you've seen in recent months >> yeah. you know, right now, home is the most important place really for all of us. we saw that developing the second half of the year for obvious reasons. we begin to see a torrid pace of demand for home services and that's continued up until today. some of that is driven by the time we're all spending in our homes and additionally we think a lot of it is driven by structural changes that have happened, including the ability to work remotely and renewed
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interest in being a homeowner, the aspiration of home ownership. some of these trends continue even as the pandemic wanes near term hopefully. >> what are some of the more popular services right now because, you know, the economy that we've seen as far as the recovery, taking housing aside, has been a boom in goods and you've seen that with furniture and people decorating their homes, but not as much with services so, tell us a little bit more about what you're seeing. >> you know, it makes sense, with everybody spending more time in their home that a lot of consumer spend shifted out of dining, leisure and travel and into making your home a more comfortable place. and some of that means buying actual physical products and some of it means, you know, getting projects done around the home that make it more comfortable and more pleasurable to spend time in we've really seen growth across the board, as you might expect,
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a preponderance, swimming pools, everything you can imagine to make spending as much time as we're all spending at home a lot more pleasurable it's been across the board we've seen a ton of demand in just about every category. >> the one of the unique attributes of this pandemic in particular has just been this reticents to be around people. social distancing and masks. people want to do things to their home but don't necessarily want a crew of strangers in their home when they're trying to protect their family and keep their bubble rell of itly small. i'm wondering if you think that the population generally, your user base generally is becoming more kfbl with that, with people wearing masks and working in different rooms and if they're figuring out how to troubleshoot that. >> it's a great question we have seen certain services like cleaning services that have
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take n a big hit. and some of those categories like cleaning, people ar choosing to do it themselves rather than accept the additional exposure. for most home services, you need specialized expertise. and people have had to make -- as we've all had to shelter in place and spend a lot more time at home, people have had to make a decision around whether they want the improvement to their quality of life that comes with that specialized expertise or whether they want to stay absolutely protected people have found a way to get more comfortable with getting this work done it's not a huge amount of people you typically have in your home and swrenl speaking there are ways you can do it to keep everybody reasonably safe and distanced from each other of the we've seen the desire for home improvement really win out over some of the fear that we saw maybe in the first half of the year. >> we talk a lot about small and independent businesses, brandon, every day, going out of business and finding it tough what have you seen in terms of
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service providers? is that a source of growth for you? >> you know, there's two sort of different forces affecting these small businesses on the one hand there's definitely been a boom in demand from homeowners and consumers and homeowners and that's helped this particular industry do better than perhaps a lot of the other local businesses that we know are suffering so badly at the same time there are immense challenges with labor, with the cost of labor, with the ability to even find labor, find people that are able and willing to work. the supply chains have been extremely disrupted. the cost of, for example, lumber has set records and been extraordinarily high so i think if you talk to most of these businesses they've stayed busy. they're very happy to have been able to persevere through this they're not exactly necessarily thriving because of the effects of the pandemic. certainly the industry has fared
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better than many but will look forward torks , as we all will, getting past the pandemic. >> reporter: people making plans for their homes. thank you for joining us. >> thanks for having me. >> reporter: meanwhile, private equity firms are trying to cash in on the consumer this holiday season, but retailers aren't on the shopping list. find out what pe firms are buying up when "closing bell" returns. i'm searching for info on options trading, and look, it feels like i'm just wasting time. that's why td ameritrade designed a first-of-its-kind, personalized education center. oh. their award-winning content is tailored to fit your investing goals and interests. and it learns with you, so as you become smarter,
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private equity firms are placing a big beth on ecommerce this holiday season, but it's not retailers they're after. leslie picker has the details. hey, leslie. >> reporter: hey, kayla. it's the warehouses that support those retailers. blackstone is the biggest player here with a whopping of $90 billion in warehouse assets. the pandemic has turned warehouses like this one which is owned by blackstone located in clifton, new jersey, into gold mines for them. every $1 billion in additional ecommerce sales requires 1 million more square feet of warehouse space. that's pushed up valuations for many warehouses especially those
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located near urban areas like this one and it's allowed owners to charge more in rent >> we've watched for a decade as year after year the demand for warehouse space has expanded covid has expanded that. people who were not users of ecommerce have been converted and we see the demand for the spaces we own continuing post covid. >> reporter: but looking to make investments in the future, the question becomes has this area gotten too hot to support the ecommerce demand once the world returns to normal, guys? >> another question, leslie, why they're not investing in any of the distressed retailers trying to turn them around and go into the tech side of it? >> right you would think so we've seen a huge slump in investments in distressed
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retailers this year. largely that's because the private equity firms that are currently invested in the retail space and would be potentially interested in them if buying on the cheap, if interested in buying on the cheap, they're currently trying to really focus on their own portfolio companies that have been struggling this year due to obviously the closures brought on by the pandemic also, you haven't seen too, too many bankruptcies, especially relative to what people were initially expecting, so perhaps if more companies got pushed into bankruptcies you could see more buyouts coming out the other side. >> leslie picker, thank you very much as we look ahead to tomorrow and the holiday shortened trading, quickly, mike, what will you be watching >> we'll see if the market continues to hang around here. we've mentioned there's a strong bias to the up side in the final several are days of the year and of course you have all of these sort of high energy speculative names that people who are at home and trading the fun stuff, they've been very active
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we'll see if that gets to a point where it's too much for the overall market to take but it's been the theme all month. >> after a solid day today for the overall market first up day in the last four. just a reminder, christmas eve does bring a shortened trading day. closing bell is on at noon for a change we'll be on noon to 2 p.m. eastern. kayla, thanks for joining us that does it for us. "fast money" begins now. i'm melissa lee and this is "fast money. guy adami, tim seymour, and nadine martin. tonight on "fast" the next aol this high flyer could be in for a reckoning harkening back to the dotcom bust. fireeye rebounding from the hack earlier in the month and plus we knew tech goesch


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