Skip to main content

tv   Power Lunch  CNBC  April 15, 2021 2:00pm-3:00pm EDT

2:00 pm
hi, everybody. welcome to "power lunch" along with courtney reagan, i'm tyler mathisen stocks are at session highs. the dow, well not really not for the dow, it crossed 34,000 for the first time hitting a record high along with the s&p 500. it's back down a little bit as you see there, nevertheless, up three quarters of a percent. nasdaq leading 3% from its all-time high it hit back in february second rocky trading day for coinbase as they deal with technical issues on its platform
2:01 pm
little bit embarrassing, i suppose. later retail sales surging in the month of march as stimulus checks get spent we'll talk to the former ceo of macy's terry lundgren on how long that boom can last as "power lunch" starts right now welcome to "power lunch" i'm courtney reagan. as tyler mentioned, stocks are smashing records thanks to positive early returns from earning season bob pisani is looking at the numbers for us hi, there, bob >> hello, courtney we knew earnings were going to be good and we didn't know they would be this good. the reopening story economic numbers powering the market to new highs here and 350 new highs on the nyc including well-known reopening names including united parcel service, expediters and csx also moving up and avis also moving up and the economic reopening is proceeding very
2:02 pm
strongly and that is showing up in the earnings reports here the analysts have dramatically underestimated how strong the recovery is going to be. look at these numbers. normally analysts, the companies will be by 3%, 4%, 5%. u.s. bancorp almost 50%. look at these huge beats, beats are usually 3% to 6% the analysts very conservative and the market has been a little surprised and so we're doing better if you actually look at how these companies are doing, though the responses have been fairly muted. overall market keeps going up and some bank stocks are noisy because beats around huge trading positions that have been very profitable and a lot of people consider that one-time noisy and not necessarily recurring. the overall market is responding to the better earnings number here how many companies have reported yet. just started 34 companies reported earnings so far this season and look at these numbers. 34 reported, 88% are beaten and
2:03 pm
beaten by 22%. this is an astonishing number for 34 companies as i said in the old days prior to 2020, the average beat tyler was 3% to 6% i think what you'll see as the companies start giving more guidance this quarter and following quarters, those differences will narrow a little bit and be a lot tougher for these analysts to be so very wrong because the companies will give them more guidance. guys, back to you. >> but, gosh, bob, trying to figure out guidance when you're looking year-over-year from when the pandemic was just starting is difficult, as well, no? >> what you see here the analysts can't really see the future they do not have models that are better than the ceo's models when the ceo models stop working, when they simply say we have nothing to tell you guys, left to their own devices, the analysts cannot see the future that is the bottom line. >> right right. exactly. well, thank you, bob
2:04 pm
so as strong bank earnings and stellar economic data do push the market to new highs here today, should you continue to ride this rally let's bring in jim pullson, chief investment strategist. jim, thanks so much for being here with us let's pick up on where bob left off talking about the earnings and, like he said, only a handful so far some of these big financial names, though, have really blown it out of the water compared to the analyst estimate albeit some noise in the numbers as bob was pointing out what can we read what we have heard so far some of the numbers from the bank stocks, for instance >> i think to bob's point, you know, we essentially have gone, courtney, from a depressionary bust and within 12 months a war-time boom. i think we just rarely had this type of quick change in our history and it's difficult for anyone, anyone on wall street, companies themselves to keep up with just how fast we've gone
2:05 pm
from death warned over to the biggest, one of the biggest booms in our history and it's showing up in economic reports this morning's retail numbers, everyone expected them to be a blow out and the reports were even a blowout of the blowout estimates. and i think we're seeing the same thing on wall street with earnings reports and i agree with you, i'm not sure how significant they are. everyone expected that they would be great what really matters is are we going to see more and more ceos talking more confidently about the rest of this year? and maybe not even bringing guidance, but just bringing some more confident statements about where they see their business headed and i think, i think that's part of the undertow here in the stock market is people are just being forced to constantly upgrade their estimates to the future >> and so if we're talking about upgrading to the future and we're talking about a boomtime like we've seen after wars and another roaring '20s here.
2:06 pm
should you be discerning with where you put your money to work >> well, i think you should still try to take advantage of people having to upwardly adjust their estimates. i think the current estimate, courtney, for real gdp growth is a little over 6% i think it is going to be north of 8 and the current estimate on s&p earnings this year is around 180. i think they're going to come in at 200 i think there's still room for upgrades as we go through the rest of the year if that's the case, then it certainly favors those companies that have greater profit leverage the biggest thing for me that comes to that are small cap companies. they've been out of favor in this last month. i think it's a great time to buy them small companies have narrower profit margins than large companies. and as a result of that, if conditions are weak in the economy, they have nothing left to cut they're generally run very lean to the bone to begin with and if
2:07 pm
there's additional weakness, it really hurts their bottom lines. but if there's an expansion of big proportions, they have great upside profit leverage to that and i think we're going to continue to see small caps regain leadership here they do well when there is excess liquidity in the economy for ill liquid trading stocks. that's good for sure they do good with heat when there's better growth, that's better well in inflation environments and, indeed, the best small cap era was the high inflation 1970s on a relative basis. and they're selling at a big discount they have a trailing or a forward right now on the s&p 600 small cap index is about 90%, 90% of the s&p 500, that's the lowest it's been since 2001. so, i think a lot of good things around the small cap market place. >> two questions, jim. first is this, if i'm persuaded by your pitch on small caps, should i buy an index. if so, which one >> yeah.
2:08 pm
well, you certainly can do that that way there are, there's the etfs, you know the ijr and also the, i think microcaps, the iwc, tyler, right now is very attractive small caps in general are going to do well within that universe, i would be more cyclicy oriented if you're going to buy individual stocks or sectors and still lean towards financials and industrials overall. i would think even within the small cap universe >> if you were to identify apart from small caps another area of the market whether it's a region of the world or a pocket and a sector within the u.s. market that has been underloved and underdiscussed and you'd see putting some cash into what would it be? >> well, i think my second favorite area would be the international markets, particularly the emerging markets. it's not necessarily not
2:09 pm
discussed, but here's the difference i would look, i would buy emerging markets ex-china. i think china is going to be a post-pandemic loser for a host of reasons, including theirdick their stealing of proprietary and uncovered the fact that all countries will have diversified small chains and move away from china. but ex-china i think great value and great ownership and i also expect the dollar to weaken here during the balance of this recovery, all of which can continue to drive those securities higher. >> thank you very much >> we appreciate it. >> thanks, tyler. shares of delta down 3% today after the company reported earnings phil lebeau speaking to the company's ceo about the results and the recovery in air travel phil >> and, tyler, even though delta reported a wider than expected
2:10 pm
loss for the first quarter, the guidance for the second quarter that has some people saying, okay, these stocks including delta all the airline stocks have come so far in the last several months is it time for a bit of a pause the guidance for the second quarter is a pretax income loss between 1 and $1.5 billion a few analysts that said that was steeper than i was expecting. the capacity for delta is down 45%. remember they're still blocking the middle seats through april revenue down 50% even though ceo says they are seeing a big resurgence in bookings >> we've seen a huge surge in bookings just over the last couple months. in march we had twice the amount of bookings that we had just in january just two months earlier and that is what led to the elimination of cash burn to generation of real net cash flow positive, $4 million a day in confidence as we look forward to the thing of that, phil, i'm
2:11 pm
most amazed by, we're still doing this while we're still missing 50% of our revenue base. >> remember, as i mentioned, that they are blocking the middle seats on all of their flights through the end of april. then they will start to sell them i had a chance when i talked with ed bastian to say, look, given some of the mostrecent studies that have been done by the cdc saying that you want a little more distance on a plane that you could potentially not spread a virus as quickly, he said, look, that data, they've looked at the studies and they feel comfortable that they should sell all of the seats starting on may 1st. if you take a look at shares of delta, they are projecting, tyler, to be break even by the third quarter. remember, that's coming a long ways from some massive losses, especially in q3 and q4 of last year >> wow, that is really something. we also wanted to ask you, george, about the many major
2:12 pm
companies opposed it and similar laws in other states coke, a local company, as well, there in georgia, home depot what is the latest on that >> well, remember, there is a new, if you will, pledge that was put forth by ken frazier where they were circulating among a number of companies asking the ceos of those companies to sign the pledge saying that these companies were going to be fighting any efforts to have more restrictive voter laws passed. we asked ed bastian why delta didn't sign that most recent pledge which started circulating in the last day. he said, look, i put out a statement a week and a half ago and we were clear in our criticism of the georgia law no reason for me to sign this pledge we have made our statement and our position extremely clear that we are opposed to the new laws that have been put in place here in georgia. but in terms of signing any new pledge, they are not doing it at this point tyler, back to you >> the deeper question i suppose, phil, not for this last
2:13 pm
little moment here is where were these companies when that law was being debated and they were not very public. >> yeah, just so you know, david faber asked him that question point blank this morning and he said, well, a number of things changed between our initial interpretation of the law and when we came out and forcefully against the law. obviously, some people will listen to that and say you should have done it in the first place. why didn't you do it in the first place? that was the question put to ed bastian this morning and things changed over those five days and had a better chance to take some stock of what the law meant. >> phil lebeau, thank you. courtney. >> thanks, tyler. bank of america falling after the earnings report. more on the big bank moves black rock on the other hand, though, up about 2%. little under 2% right now as its profits boom plus ceo larry fink said crypto might not be worth the hype. por nc cinrit g gh
2:14 pm
2:15 pm
2:16 pm
welcome back big bank earnings bank of america, citi topping estimates and bank of america lower with heightened expenses. regional banks also in focus the group is lower today but 20% higher so far this year. one name in particular, wafd
2:17 pm
saying despite the pandemic loan losses were insignificant. here's brent, ceo. welcome back good to see you. >> tyler, good to be here. >> not only earnings higher than the estimates 56 cents a share versus 49 cents and you said the loan losses were insignificant, you over the last year generated 9% more in total loan volume and loan originations up 49% in the midst of a very difficult economy and a time when most of your employees, i'm sure, were working remotely >> yeah, thank you for recognizing that you know, in the midst of this pandemic it was a choice many banks chose to pull back very nervous about what the economy would do we chose to take the other path. we leaned in we took the opportunity to take market share and it's fairly remarkable last year was a record year for us we had $6 billion of
2:18 pm
originations this year we're on pace for $8 billion of originations and as you point out even with repayments higher than they've ever been we have grown our total portfolio by $1 billion outstanding. >> loan originations up 49% in a year, who's borrowing? >> you know, it's this economy that it's the dichotomy. we have so many of our clients that are doing so very, very well one thing i hope we talk about is the surge in deposits we've seen so many people because of this fiscal stimulus, those that started off well off are doing even better and those are the ones that are borrowing. they're taking advantage of the opportunities whether it be multi-family projects and whether it be new manufacturing facilities or just to refinance old debt because of what the federal reserve has done with interest rates >> you yourself have retired some old debt, didn't you? >> we took advantage we went out and issued $500 million or $300 million of perpetual preferred stock in
2:19 pm
less than 5% for a bank we review that as roughly half the cost of capital. >> let's talk about the question of deposits which is very interesting to me. a lot of talk that people are going to take the federal money and they were going to spend it, which some of them have on necessities. there was a lot of talk that people were going to put it in the stock market i don't think that's really happened but one place they have put it is into bank accounts, right. >> >> they sure have the fdic just came out with an announcement that the loan to deposit ratio has just hit its all-time low at 53%. so, if you think about that, you know, banks are in business to take in deposits and lend it out and only roughly half of those deposits are lent out. so, there is all kinds of pent up supply for our consumers and businesses to grow their balance sheets >> you operate in, is it eight, mostly western states from texas
2:20 pm
all the way up to washington state. you've had the benefit of really good real estate markets, particularly in the northwest, particularly around seattle as you and i know do you see that persisting >> i do. it's simply supply and demand and demand is so high right now and supply has never been more limited. and so i think real estate values will continue to go up over time. certainly there could be a correction i think the number was 14% nationally year over year in values so there could be a mild correction but longer term, i'm bullish on our eight western states net into the states where we're at and we're investing regionally >> not wafd, it's up higher. brent, thank you for your time >> you bet >> stick around for the closing bell at 3:00 the bank of america ceo always interesting brian moynihan will be along to join
2:21 pm
courtney well, coming up, hedge fund heavyweight taking aim at elon musk and we'll tell you what has him fired up about the billionaires plus april is financial literacy month sharing messages from business and thought leaders about the importance of financial education. here's former u.s. senator heidi hidekamp >> one of the foundations of our democracy is the free enterprise system is that we all can contribute economically and when we all contribute economically, we succeed so having that kind of economic resiliency in american families is critical to the success of the american democracy and critical, obviously, to the success of the american family stay restless with the icon that does the same. the rx crafted by lexus. get 0.9% apr financing on the 2021 rx 350
2:22 pm
experience amazing at your lexus dealer.
2:23 pm
this is wealth. get 0.9% apr financing on the 2021 rx 350 ♪ ♪ this is worth. that takes wealth. but this is worth. and that - that's actually worth more than you think. don't open that. wealth is important, and we can help you build it. but it's what you do with it, that makes life worth living. principal. for all it's worth.
2:24 pm
after elon musk among others in his latest letters to investors and leslie picker has the details. hey, leslie. >> hey, tyler. that's right the real target of this letter is regulators. but in doing so he points out activities taken by david and
2:25 pm
robinhood amid the whole gamestop volatility saga that took place earlier this year he points to robinhood saying it suspended trading in certain stocks because it was undercapitalized it was possible, he said, that it wasn't following regulatory requirements and a relatory sanction is probably necessary declined to comment in response to this letter from einhorn and elon musk he notes the real jet fuel came whose appearances on tv and twitter respectively at a critical moment further destabilized the situation he goes on to say that has been done through a dspac which competes with robinhood he notes and left us with the impression that by destabilizing gme, he could harm a competitor.
2:26 pm
and then he also goes on to say that he half heartedly wants to defend musk because if regulators wanted musk to stop manipulating stocks they should have done so with more than a light slap on the wrist when they accused of manipulating stocks back in 2014. a long-time bear on tesla. he hasn't provided an update on his positioning in sthis letter but has been critical in the past with regard to regulation, he says for the most part no cop on the beat it's as if there are no financial fraud prosecutors to engage in malfesance have little to fear. he goes on to say that many who would have never supported defunding the police have supported and for all intents and purposes have succeeded in almost completely defanging if not defunding the regulators he says for the most part
2:27 pm
quasi-an aarchy appears to rule the markets. a nice antic dote towards the end of this letter it is publicly traded and owns a single deli in rural new jersey and that deli had about $14,000 of sales in 2020 it was closed due to covid in march through september of last year and then somehow managed to reach a market cap of $113 million. so, he points to that as just one more example of some unique aspects that are going in the market and notes i think in a joking manner that it must have some very good pastrami. we've reached out in addition to robinhood to palihapitiya and elon musk. if they do decide to comment, we'll let you know what they say, guys.
2:28 pm
>> wow, really interesting stuff, leslie. anything about -- >> so he uses the term arch-egos. very small mention he says if congress wants to understate why gme did what it did or more recently how the arch-egos fund cornered the market in a handful of stocks better to call to account the absentee regulators and their philosophical backers. that's the extent of what he said but maybe there will be more in his next quarterly letter on that front >> covered a lot of ground in that letter it seems thank you very much. >> yeah, thank you well, up next, an explosive retail sales number. consumers flocking to spend the stimulus checks. what this means for the industry coming up next plus coin base sitting below its opening price. ahead on the show we'll speak to
2:29 pm
one company taking on the crypto exchange's dominance "perun" lle ghow lchwi brit is hum to help you get back to your future. edward jones. for skin that never holds you back don't settle for silver #1 for diabetic dry skin* #1 for psoriasis symptom relief*
2:30 pm
and #1 for eczema symptom relief* gold bond champion your skin what if you could have the perspective to see more? at morgan stanley, a global collective of thought leaders offers investors a broader view. ♪♪ we see companies protecting the bottom line by putting people first. we see a bright future, still hungry for the ingenuity of those ready for the next challenge. today, we are translating decades of experience into strategies for the road ahead. we are morgan stanley.
2:31 pm
it's moving day. and while her friends are doing the heavy lifting, into strategies for the road ahead. jess is busy moving her xfinity internet and tv services. it only takes about a minute. wait, a minute? but what have you been doing for the last two hours? ...delegating? oh, good one. move your xfinity services without breaking a sweat. xfinity makes moving easy. go online to transfer your services in about a minute. get started today.
2:32 pm
welcome back i'm rahel soloman. oxford university says the risk of developing a blood clot after having covid-19 is eight times higher than it is after getting the vaccine. it developed with astrazeneca. while the benefits of the vaccine are seen as much bigger than the risks, several countries are still limiting its use in younger people due to those concerns with the update on the numbers from the cdc more than 125 million people in the u.s. have received at least one dose of the covid vaccine approaching half of the adult population and three in ten adults are now fully vaccinated covid deaths in france deals with a third wave of infections. france is the third european nation to reach that mark. global deaths during the pandemic now approaching 3 million and almost one in five has been in the u.s. tyler, you're now up to date i'll send it back to you >> thank you very much. where the markets stand on this green day, folks.
2:33 pm
the dow industrial record highs today peaking at 34,035. right now back above 34,000 on the heels of a 0.84% gain and up 283 points the dow s&p 500 record territory, as well 41.68 there and nasdaq just a percentage point or so away from the all-time high back from february up 1.2% and russell gaining, as well courtney well, thank you very much, tyler. well, it's been a challenging year for many retailers. there are signs a recovery is under way. retail sales for march jumping nearly 10%, blowing past estimates. the biggest gain since last may. here with more on the spending boom and whether it can continue is terry lundgren. the former chairman and ceo of macy's terry, thank you so much for being here i have to ask this first question whenever i look at the government's retail sales numbers, i'm always a little skiptical. i remember a conversation i had the ceo of home depot some time
2:34 pm
ago and that category and the government sales was lagging for month after month but home depot was putting up blockbuster results and they're the biggest in the category. so i guess what my question is to you, it says the department stores gained 12% in march from february do you feel like that really happened in the country? should we really be counting on a recovery this strong in retail >> well, everything, first of all, good to see you, courtney and tyler. but everything is relative, courtney particularly in the retail business where you're always comparing this year to last year or last month. last year it was a year of two different paths for retailers. if you were an essential retailers, chosen by the government labeled by the government, then you had probably an outstanding year if you are nonessential retailer, you got crushed. you were closed for a good part of the year and became out of sight, out of mind this year the consumer is going to decide who is essential who is essential to their buying trips. so, i think that changes
2:35 pm
everything to your question, i think we're against small, weaker numbers in the department store sector and so on that base, yeah, there definitely is growth and a lot more to come in the future >> okay. you know, jamie diamine said on a call this morning with reporters as thinks the consumer has so much money and paying down their credit card loans and they're coiled and ready to go they're ready to start spending money. so, if you're looking at the retail landscape, who is going to win those dollars >> yeah, well, you know, first of all you think about the money that was spent last year because retail sales were pretty darn good in 2020, especially considering we were in the middle of a pandemic but certain categories were dominant whether they were the food categories or whether they were the home improvement categories. you know, they were dominant now, you know, what haven't they spent their money on
2:36 pm
they got money to spend, to your point. savings rates are still very, very high. plus you got these new stimulus checks that are filling up their bank accounts and they got money to spend i think it's where they haven't spent it the pent up demand area. they will want to travel again and go out and be with friends and socialize. they're going to want to go to restaurants and for all those reasons, courtney, they'll buy apparel. apparel is an event-driven business i just named a bunch of events that haven't taken place in 2020 that are still in front of us. i think it's an opportunity for the apparel-based retailers and footwear and accessories that haven't been sold in the last year to satisfy the need for those events in the future >> i mean now that you're not the ceo of macy's any more maybe you can give us some names when we're talking about the apparel and retail and for so long this
2:37 pm
barbell trade you win on the high end or low end and in the middle, wasn't so lucky. what are you seeing now or what do you think is going to happen with some of those middle players? >> well, first of all, there's the two categories that i described. and those categories, those that were in that essential category last year performed extremely well i talked about in the past. walmart, home depot, lowe's all these guys did really well so did target. who came the furtherest, you know, inivvested the most and compared themselves to continue to dpgrow into the future i think target has done a particularly uniquely strong position there from where they came from which, frankly, they had a lot of room to improve but they have really been firing on all cylinders i like them going on top of their strong comps of 2020 and then, actually, on the other side, it's partly this beaten down group that i've talked to you about because they're going against really easy numbers.
2:38 pm
so, there's a lot of them. so just pick the best of class in every one of those categories for apparel or footwear. i mean, honestly, little bias here but i think macy's has an upside potential here because of the difficulties that they had and they're an outstanding omny channel retailer and they were strong before and continue to be strong i like lululemon and dick's sporting goods you talked about on your show with lines out the door why are there lines out the door because people want to try on product. you know buying apparel online it's been a big business, it's not a satisfying business. up to 40% of the products that are bought online in the apparel and footwear category are returned how good of an experience can that be? so, getting back in the store and trying on that product or in the case of dick's, swinging a golf club instead of buying it online, those are experiences that i think haven't been met in the last year and i think it's the opportunity in front of us is very, very powerful
2:39 pm
>> terry, a couple thoughts here it's tyler how central to the refreshing of wardrobe and the sale of apparel is the return to work trade? i think of men's clothing and men's suits. there's probably no business i'd least rather want to be in then men's suits right now because nobody's wearing them. i guarantee you this when i work at home, as i do two days a week, i am the only guy in my montclair town sitting in his basement working in a suit i guarantee you. >> listen, you're not wrong about this and i listened, i've been in contact with several ceos over the last couple of months and talking about these, you know, what we believe. by the way, by the way, none of us know for sure because we as consumers are the worst predictors of our own behavior in the months ahead. we think we know exactly what we're going to do and we're just wrong so often historically.
2:40 pm
a lot of these ceos talking to their employees are hearing up to half, in some cases more, really prefer to stay at home and the number one reason is the commute. maybe it's the dress code, also, tyler. you know, from the waist down. but the commute is the biggest reason why they are preferring to stay, work at home. honestly, i think they'll miss that water cooler collaboration and socialization in the office and after work and i think over time this is one of the areas where consumer or employees change their mind and gradually migrate back to the office i do not believe it will go back to 100%. absolutely not but i do believe it will be more than people are expecting it be and with that will come purchases of apparel for work. >> i think you're probably right on that. not go back to 100% and as employees see fellow employees going back to work, they are
2:41 pm
going to want to go back to work because they think they'll be missing something or going to be at a disadvantage on promotion, salary increase and so forth terry lundgren, thank you, appreciate it. >> thanks tyler, courtney. the bond market, rick santelli hey, rick. >> well, i tell you what, it has been a wild, wild day, tyler look at one-week chart it is easy to see that technical forces were at work because the minute we started trading under 1.60 it was like a dive off a cliff in oca poco and so many things we pointed out over the last month that gave us early signs. note over bonds and done some solos on this. look at this spread. this spread peaked on february 24th at 86 it's down 22%. many times when that note over bond spread 30 year minus ten-year yields starts to go in a different direction than the market flattening when rates are going up, usually a warning
2:42 pm
sign look at tens the lowest yield close since march 10th not only that part of the curve. tens minus twos at 137 will also have the flattest close since march 10th one other clue that is going on is the dollar index. the dollar index has been spongy for a while and if you look at this chart, certainly looks like we're closing at basically one dollar low on the index even though it is unchanged today maybe the reason rates hung up so high is because they had so few correctionsmaking traders bit nervous. that nervousness seems to have passed the minute we traded under 1.60 tyler, back to you. >> mr. santelli, thank you so much. we'll tell you why shares of virgin galactic are coming back down to earth. coinbase is public we'll look for the next in crypto
2:43 pm
stay with us
2:44 pm
when it comes to autism, finding the right words can be tough. finding understanding doesn't have to be. together, we can create a kinder, more inclusive world for the millions of people on the autism spectrum. go to
2:45 pm
time for today's power movers we start with virgin galactic.
2:46 pm
richard branson, the company's founder, disclosing that he sold more than $150 million worth of stock. that was recently. and that's more than 2% of the company. shares down almost 15% next up, quantumscape falling after short selling by scorpion capital. the report is titled quartanscape a dump by silicon celebrities that make their look like amateurs. doubts the company's claims about its batteries for electric vehicles shares are down 12% on that report we end with wine garden realty kimco is buying the company and specialize, both companies specialize in outdoor shopping centers. shares of both are higher. kimco higher by 1.6% and weingarten higher by 3%. coinbase slightly lower and
2:47 pm
$100 below yesterday's peak. up next, we'll talk to a coin-base competitor about keomssnsidypto fees could see li cmiio d we'll be right back. ♪ i wish that i knew what i know now ♪ ♪ when i was younger ♪ you need a financial plan that fits the way you want to live in retirement. a plan that can help grow and protect your money. now or in the future. with an annuity in your plan to help cover essential expenses, you can live the retirement you want. the right financial professional can show you how. this is what an annuity can do. ♪ ♪ if you wake up thinking about the market
2:48 pm
and want to make the right moves fast... get decision tech from fidelity. [ cellphone vibrates ] you'll get proactive alerts for market events before they happen... and insights on every buy and sell decision. with zero-commission online u.s. stock and etf trades. for smarter trading decisions, get decision tech from fidelity.
2:49 pm
2:50 pm
give you a quick check of the dow right now above 34,000 by just a hair that's good for 0.8. we're going to be back with more on the markets looking ahead to the next big thing in crypto there's always something new in that space coming up next on "power lunch."
2:51 pm
did you know that petco, is now a health and wellness company?
2:52 pm
their groomers work wonders for my confidence. i trust their vets, and i'm known to have trust issues. they deliver high quality food the same day. i was outside digging, what'd i miss? just everything regarding our physical, social, and mental health. exciting. i'm gonna take a spin around the room. great idea. ♪ ♪ petco. the health and wellness company.
2:53 pm
shares of coinbase slightly lower today above the reference price but above where it began trading yesterday. you can see shares are down by 2% but now that coinbase is public, investors are looking for the next big thing in crypto kate rooney joins us now to explain. hi, kate. >> hey, courtney investors are hoping that the coinbase debut is just the beginning for the crypto economy. you may have heard this buzz word recently, defi or decentralized finance. it's an effort to make the rest of the financial world more like bitcoin. if you think of how the economy works right now, most things are controlled by either a company, a government or some sort of central authority. so those would be centralized. bitcoin is a currency that's not controlled by a government or any other authority, so that's decentralized. in this case blockchain technology replaces the middle
2:54 pm
man to keep track of everything. advocates say that it increases transparency because you can track transactionson a public ledger startups are looking to take this same concept to other parts of finance some are building decentralized stock exchanges so they call it a dex. others are taking on mortgages, loans and other banking products a lot of these startups are built on the same infrastructure or network, so etherium is the main platform developers are using for these decentralized apps these can be tailored to lots of different uses most nfts are based on that technology coinbase bulls are saying crypto is already a leader in the case and will benefit from the defi economy. that can help justify some of those high expectations baked
2:55 pm
into the stock price guys, back to you. >> easier bitcoin. okay, we'll see. so who's funding all of this, kate where does this money come from, dex, defi? >> i know, a lot of buzz words in venture capital right now it's coming from a lot of the same investors that invested in coinbase a lot of interest from vc, but folks i'm talking to say there are a lot of new crypto millionaires and billionaires as a result of the coinbase listing. those guys will be looking for the next big thing, next seed investment and ways to grow their money. defi is where they seem to be placing a lot of their bets. >> kate, thank you very much for more on bitcoin and the crypto economy, joining us now is steve urlich, ceo of a crypto trading firm steve, thank you for joining us and welcome. you've had amazing growth. tell us a little bit about how
2:56 pm
fast your platform is growing. >> well, it's been an amazing 12 months thank you for having me, first it's been an amazing 12 months for voyager. we've just exploded. we have millions of users on the platform now we've grown from literally about $5 million of assets 15 months ago to close to 3 billion if not over 3 billion of assets today by our consumer so we've seen amazing growth that has happened over the last 12, 15 months for us. >> 270,000 plus funded accounts. what was that a year ago >> it was probably about 8,000 funded accounts a year ago so you can see how much we've grown in just 12 months. >> you compete obviously with coin coinbase one of the things we talked about in our tease to this segment was that there was some concern over those who follow this business that those companies that rely on a fee-based structure to make money are goin go to the bottoms
2:57 pm
the competition heats up you don't charge fees. why, and how do you make money >> first, we have an expansive coin list. we have over 50 coins that consumers can actually invest and earn on our platform with about half of them you actually earn interest so we earn a spread revenue on coins as well because there's no natural better offer so we're connected to ten exchanges and market makers to do that so we make a small spread on every trade. we're only 50 basis points on our fee on the spread on bitcoin. and so we're already at a very competitive price to allow consumers to actually create the wealth and keep most of what they're making in addition to that, we're actually giving people interest on bitcoin and on the usdc stable coin from 7% to 10% so
2:58 pm
consumers really can create wealth using our platform. >> year to date your stock is up it looks like 467% as bitcoin has moved up and some of the other cryptocurrencies have as well but you do see if you chart cryptocurrencies, they do a lot of that. they're very volatile. what do you think the ultimate effect of that volatility is going to be for acceptance of cryptocurrency and for your business the two things could be very different. >> you know, it's interesting. so i harken back to the time i spent building e-trade back in the early 2000s where volatility was at play with a lot of stocks i do think it brings interest in i think people have the ability to make money. i've heard a lot of people say this and i tend to agree with it to get to a point where there will be less volatility with crypto, we have to get through the volatile stages. as more and more people come onboard and more and more people adopt crypto, you're going to
2:59 pm
have volatile points at some points there will be some steadying off but i think that's multiple years out here we saw that with stocks with the advent of online brokerage there was an increased volatility that took years before it flattened out. i think we'll see the same thing here. >> a quick question, we're into our last minute of the program are you concerned as our friend jason trennet is that eventually governments can come in and bigfoot cryptocurrency i know you think mr. gensler at the s.e.c. is a fan. >> no, i say no way. i don't see that happening i think krimt crypto is the fut all financial services and is very important to the financial ecosystem in the long term. >> we appreciate your insights today, thanks. >> thank you. let's talk about the markets as we look at a day where the dow and s&p 500 have both set records. the s&p is up 1%, the nasdaq by
3:00 pm
more than that and the dow industrials sitting right there on 34,000. how about that >> right exactly. >> it's the court knee reagan effect. >> i think as wilfred would say, it's bang on, right there. >> court, great to see you thank you for watching "power lunch. "closing bell" starts right now. >> thank you both very much for that welcome to "the closing bell." i'm wilfred frost along with sara eisen another day, another record high for the dow and s&p 500. stocks firmly in the green with the nasdaq leading the pack, up more than 1% bang on 1% for the s&p 500, just above 34,000 on the dow. the economic rebound producing some very strong data this morning. retail sales surging 9.8% in march and jobless claims came in at their lowest level since the beginning of the pandemic. earnings remain in focus as inst


info Stream Only

Uploaded by TV Archive on