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tv   The Exchange  CNBC  September 27, 2021 1:00pm-2:00pm EDT

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brenda >> cvs should benefit fourth quarter traffic from boosters and a cold and flu season >> shannon >> cgnx >> all right it is good to see everybody. keep your eye on that ten year, just below 150 it does it for us. "the exchange" is now. ♪ ♪ thank you very much, scott hi, everybody. i'm kelly evans. ahead this hour, ongoing supply shortages, worsening gas crisis in the uk, debt and power problems plaguing china and an imthem government shutdown here in the u.s is the recent rebound in stocks setting a trap for investors we will discuss the latest on that first speaking of a government shutdown, stifel's brian gardner says the risk has a u.s. debt default decreases. what he says the democrats need to get done and what it means
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for markets. empty store shelves and a necessaritive call on amazon all coming up later on i'll run you through numbers where the dow was up 263 points at the session highs we are hanging on to a 90-point game here, a quarter percent higher the dow is the only one in the green today. the nasdaq is biggest laggard, down 123 points right now. the energy sector is getting a ton of attention today as prices spike for the fifth straight session. both brynn and wti climbing 2% today. look at wti crude over $75 a barrel, a huge snap back we have seen in the last couple of weeks if you want to call it that. the energy spdr trading up 4% today. brynn, the highest since october of 2018. xle up nearly 4% today more on the energy trade later look at the ten-year note. just a hair below 150 right now. we were over that level earlier on, we have backed off a touch
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if you wonder what the spike here was all about, it was the better-than-expected durable goods report at 830, about triple what people were expecting on the month good pace for durable goods orders good demand trends for the u.s. economy. we will talk to steve about that in a second. is the fineringie trade from the first quarter of 2021 back on? banks are climbing because of the move higher in bond yields the financial etf1.25. wells fargo sitting it out bank of america and jpmorgan and citigroup up in the range of 1.5% to 2% all of the bond moves and the latest on the minds of investors today. steve liesman is here with more for us steve. >> yes everything in one minute and 15 seconds. a strong bead on durable goods driven by aircraft, but showing businesses in august continue to invest we have had good numbers here. business investment up nearly 14% year over year august marked a string of strong monthly gains with only one decline. that goes back to may of 2020.
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so amid all of this covid uncertainty businesses have continued to invest. that bodes well for the future communications equipment and fabricated metals and appliances in august did well the ten-year yield kelly talking about, other treasuries marching higher, a sense inflation could hang around longer because of supply chain disruptions and talk of tapering by the fed. it would have been back in march. the fed governor lael brainard saying it is a bit short of the bar needed to taper but added it may be soon, adding that if the fed is going to taper you should not take information about tapering rates from the decision john williams saying tapering may soon be warranted, assuming the economy continues to improve. he expects 2% inflation next year and points out he sees signs of inflation moderating now. the recovery, he says, shows
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solid momentum but a full recovery, kelly, will take time. >> but, steve, how about the personnel move eric rosengren retiring. you have the chair himself, one or two others whose seats have to be filled or announced in coming months, now all of a sudden a fourth? i think this could change the politics for the fed, right? >> yes well, part of it is that the fed, as you know, kelly, changes anyway, at least the voting members in the -- the president voting members will change rosengren was going to be a voter next year so we don't know who will fill that slot right now. there was a first vice president who will take over eric rosengren citing health issues saying he will resign cemen september 30th instead of planned june of 2022 when he would have to retire because of hitting the 65-age limit there he was also among those mentioned in the conflict of interest discussions we've been
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having regarding eric rosengren buying mortgage-backed securities while the fed was buying and making multiple trades in that he said as of september 30th he would sell but now he will be resigning. >> his replacement as boston fed, how does it work? >> the boston fed board of director it will meet and decide who will replace him right now it is kenneth montgomery, who is interim, and it has to be approved by the washington board of governors. >> very historic steve, we appreciate it. steve liesman with the latest. while the dow just touched the highest level in nearly three weeks today, it is still on track for the worse month since january. the s&p and nasdaq having the worst month since last october and morgan stanley is warning anyone buying into last week's rally is in trouble, saying it is too frothy and government is
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on a crash course for shutdown and fed tapering around the corner joining me from the bonson group, are you more sanguine, david bahnsen, or how is it shaping up >> it dependon when they write the plan i worked with him at stanley morgan and he leans negative he made a call on this about 15 times lately all people pointing out logical things that don't look good all the time in the markets. the markets have had an opinion of their own so i wouldn't make any short term decisions around the report from morgan stanley. i hopefully don't have clients making short-term decisions at although you know, we want to be able to have a little longer term view, and that's where the sanguine comes from, is that we do believe through time the way that particularly our dividend orientation is positioned will do quite well. but as far as the markets needing an excuse to have a correction or some downside
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volatility, there's plenty excuses out there to choose from >> there's a ton of investors, david, breathing a huge sigh of relief to see financials and energy back in the leadership, people who were overposition, looking for rates to finally move to the upside and so forth. is this really sustainable though should the trades remain married? on the energy side i see chevron is one of your picks but i have to wonder how high oil prices can remain, how much higher they can keep going you know, maybe we have a few more months of this ahead of ourselves but if we go back to 100 or over a barrel, i have to imagine there will be long-term demand destruction, screaming from policymakers, expanded supply why is chevron a name you want to bet on for the long run >> well, our thesis on chevron has absolutely nothing to do with the price of oil. so there's sort of two different questions there. i agree with you completely. oil prices getting near $100 are not good for the energy sector it drives a lot of margin for the short period of time, but as you exactly pointed out, long-term demand destruction is
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a real phenomenon. there's a sort of sweet spot in this supply/demand crux. i suspect it is between $60 and $80, we're at the upper end of the range now, back above $75. chevron makes a lot of money at $60 oil, so the price of the commodity is not the thesis. it is that the valuation of the company is extremely low relative to its normalized free cash flow. chevron is a 5.5% dividend payer in a weak part of the market, leaving plenty of road ahead but you also have to remember the natural gas story and the downstream story >> oh, yeah. >> these are integrated companies. chevron has a lot of ways they can make money regardless of the oil plies. >> no, and this will be an important story. i feel like i could talk to you about only that. i want to mention you also like 3m, lyb, blackstone here there are a number of other things going on. to take the example of chevron for a moment, is it that you don't think the oil price is relevant or you think it will
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stay in the $60 to $80 range again, the yield, like you said, 5.5% is tantalizing. but if you look at the size of the energy sector in the s&p 500, it is -- it has not recovered from where it has dwindled to. in other words you just have to wonder if investors really see a lot of potential here for strong returns in the years ahead >> well, plenty of investors don't which makes us like it even more. so the fact there's a sentiment issue there's an argument in my favor. i don't like to bet on things that all of the sentiment is already positioned there by the way, chevron is basically doubled from its low point of covid and energy is a lower percentage of the s&p than it was at that point. how is that even possible because the overall market has moved even more? so there's a sort of relative weighting in this as well. we're bottom-up people and when we look at chevron and some of the energy names we particularly like midstream, we just believe it is a story that american
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supply is understated right now. we need more production and you're exactly right if oil prices continue going higher i don't care what people's political orientation is they're going to demand more u.s. production of oil, which i think is cleaner and better for the environment than middle easterner producers anyways. at the end of the day we have a story here of a company that has a very important place in american energy narrative that i just think is under priced the sentiment and some of the technical and extraneous factors can't ever change the fundamentals of cash flow generation >> yeah. >> they have really reduced their cost structure and so we like the profit margins going forward as well. >> i mean we've seen the performance of, you know, going back to the altrias of the world after that era of divestment, speaks for itself. we will see if it is the same story. we'll leave it there hope to check back in soon david bahnsen is cio of bahnsen
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group. the man behind the call will appear at 4:00 p.m. to talk about why he thinks it is a trap for investors. kate rooney is here with a story as shares move down to 1.5% >> coin base is taking on payroll. the crypto company announcing plans to let users deposit any percentage of their paycheck into coinbase accounts directly. they say they will convert paychecks into crypto from u.s. dollars for zero fees as well. in a blog post the company talking about this really removing a step in funding some of the crypto accounts and they talk about instant access to the crypto economy it also talks here about financial services as the next leg in that digital economy. so beyond just trading, really looking to be what they call the most trusted full suite of crypto for financial services. coinbase, of course, best known for offering bitcoin and crypto trading which is heating up. there's a lot of competition
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with entrants like robin hood and he have sofi there as well unclear how 68 million users will want to put their paychecks directly into coinbase or crypto because it is volatile this is the first move we've seen from a pretty big crypto company, looking more like a bank, and it comes at a tense time for crypto regulations. sec chairman gary gentzler paying more attention to the asset class lately and talking about last week for the need of oversight there. coinbase cancelling plans to launch a high-interest rate after coinbase was threatened to be sued. >> interesting to see if it is the next move on deposits. thank you very much. coming up, high stakes on capitol hill with key legislation and potential shutdown hanging in the balance. can house democrats strike a deal to deliver a win for the president's economic agenda? plus, fuel stations are
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running on empty in the uk where the british government is considering calling in troops to help deliver gas we will look at the shortage and fall-out for global energy space. look at shares of wells far owe. you saw them in the red earlier on, down almost 3%, about 2% now on a report that the bank is being sued over foreign exchange services wells fargo down about 2%. we will bring you more details as we get them we're back in a moment this is "the exchange" on cnbc is almost at the finish line today we're going to fine tune the dynamic braking system whoo, what a ride! i invested in invesco qqq a fund that invests in the innovators of the nasdaq 100 like you you don't have to be a deep learning engineer to help make the world a smarter place does this come in blue? become an agent of innovation with invesco qqq
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welcome back to "the exchange," everybody president biden receiving his third dose of the covid vaccine minutes ago, in line with the booster shot for all americans 65 and older the president is 78 years old. he got his second pfizer dose in january, said he had no side effects. the latest figures from the cdc show 77% of the adult population in the u.s. has received at least one dose again, a big boost by the president for boosters here. this is a make-or-break week for president biden who is betting on his domestic agenda to shore up support for democrats ahead of the midterm elections next year, but will party infighting over infrastructure and spending plus
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the risks of a government shutdown and a debt default jeopardize the hopes joining me is brian gardner, the chief washington policy strategist at stifel brian, it is great to have you what caught my attention is because you think a shutdown is getting more likely. why? >> actually, kelley, i did think that because i thought that democrats were not kicking mitch mcconnell's threats seriously. going back to the summer, mcconnell was saying that if democrats wanted to raise the debt ceiling they were going to have to do it on their own, the republicans weren't going to go along and the democrats could do it in reconciliation it was not being taken seriously, and in the last week the debt ceiling and a temporary government spend inbill to avoid a shutdown were being combined they're still technically combined now it seems like democrats have realized mcconnell was bluffing, that republicans weren't going to vote to increase the debt ceiling and so they're going to have to find another way to
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extend government funding and avoid a shutdown i think i'm growing confident through the weekend that that exit strategy on that probably is better than i had previously thought. >> so let's actually -- let me bring in tony fratto as well tony, hang on a second brian, i want to clarify why it is actually looking better that we avoid a shutdown now. >> because i think democrats decided that, one, mcconnell was not bluffing and so there was not going to be a republican vote to increase the debt ceiling, and that given everything that's going on in washington and with the administration, situation on the border, the situation with covid, the situation coming out of afghanistan and trying to pass these huge spending bills, the two infrastructure bills, that a shutdown -- some people might blame republicans in the short term, but it is not in
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democrats' best interests to play that game so i think democrats kind of figured out what mcconnell was doing and that he wasn't bluffing and that they decided it is not in their best interests to try and pin this on republicans, that it actually would hurt the administration and hurt democrats so they've decided to pivot into a shorter term spending bill >> pivot into a shorter term spending bill, tony. all right. >> we will go back to this in a couple of weeks. this will be a kick-the-can-down-the-road exercise and we'll revise i.t. >> sure. tony, remember the episodes from the past there were times they would extend it for a couple of days or couple of weeks, we would go over it again. we hate talking about it every time we have a government shutdown and everyone rolls their eyes and goes, here we go again, tony. boil it down if brian is right and this iskind of a short-ter kick-the-can-down-the-road issue, where does it leave us for the legacy of events here? >> i think brian is right on this, by the way i think it is in neither party's
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best interests to get a shutdown it would be more damaging for democrats than republicans the hard deadline that cannot -- you can't kick the can down the road on for very long is the debt ceiling, and that will, again, become the action -- the ultimate action-forcing event on this right now what they need is a little bit of time, both parties need a little bit of time, and it will be days and i think it will trip into a week or two for them to find the right price to avoid shooting the hostages, and the hostages right now are the reconciliation bill on the part of progressives and the infrastructure bill on the part of democrats so finding a price on the reconciliation bill is what the task is over the next week to ten days, and they need some breathing room to do that. so i think the cr is going to -- you know, they're going to have to do something like that over the weekend. >> sure. >> the up cucoming weekend to do
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that, but nancy pelosi and chuck schumer need to show progress on getting closer to a number that meets the standards of kyrsten sinema and manchin in the senate and the number of progressives >> but the number you are talking about, we have talked about the $3.5 trillion number and you're saying the question is whether manchin and sinema can accept something in the $2.5 trillion, what do you think the number is? >> let's be clear, there are not votes for $3.5 trillion in the house let alone the senate it is not $3.5 trillion under no one -- you know, real understanding of what is going on is it goes to be $3.5 trillion it will be less than that. there are a lot of democrats in the house right now who cannot vote for a $3.5 trillion bill and won't and have signalled that they've been comfortable in letting manchin and sinema take the flack on this and take the public heat, but there are a lot of members whose names most people haven't heard of in places like pennsylvania and elsewhere who cannot vote for
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$3.5 trillion. they're in very competitive districts. >> a quick final question, brian. what happens with infrastructure in the meantime? >> i think this is kind of a kick-the-can-down-the-road scenario, too. there's supposed to be a vote in the house on thursday. i wouldn't be surprised if it is delayed. to tony's point, as senators try to coaless ace around a number d framework to buy pelosi some time to convince the progressives not to block the other board, to get centrists on board, you have competing factions in the democratic party. i think at the end of the day they will get to a number at the lower end of tony's range, but they need time they're not there yet. >> got it. all right. we will check back in with you guys in a couple of weeks and see where we are >> thank you, kelly. >> thanks, kelly >> thank you, guys appreciate it very much. still ahead, the biggest names in tech are in beverly hills for this year's code conference we will go live there for a
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smart thermostat uses geofencing to simplify how homeowners manage comfort and costs. emerson. consider it solved. ♪ ♪ hi, everybody. welcome back to "the exchange. let's get a quick check on markets. the s&p tells the story, down 7 points or about a tenth of 1%. the nasdaq is lagging today. that reflect what is going on with sectors energy is leading as traditional oil and gas players rally. tech and health care lagging energy up 3.5% while health care is underperforming tech, down 1.4% facebook, let's hone in on this one for a moment, slightly lower after the company said it is pausing efforts to build a version of instagram for kids. it was intended for kids ages 10 to 12. the move comes after an investigation by the "wall street journal" this month showing facebook repeatedly found instagram is harmful to teens, especially teenage girls.
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they've shelved plans for instagram for kids facebook shares up about 10% today, down 7% in september, putting them on pace for the first negative month since february and threatening their longest winning streak ever. over to rahel solomon for a cnbc news update. rahel. >> hi, kelly leehire is what is happenin. the number of killings rode from 3,900 to about 21,500. while the increase is largest ever, the overall number of murders is still below the record set in the earl ae ee 90s. in philadelphia though this year's murder tally topped 400 over the weekend putting the city on track for a record number of homicides this year. on the news, more on the rise in violent crimes of all kinds in the u.s. that's tonight at 7:00 eastern texas republicans releasing a first draft of the new congressional map. texas is the only state to gain two new congressional seats from last year's census the map is likely to change over the coming weeks before being sent to governor abbott for his
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approval and strong advance bookings for new james bond movie it is said "no time to die" has the breast presales of any film since april of 2019. the movie rolls out in the u.s. next week. kelly, i imagine that wolf will be first in line to see it >> he should be in one of the film at this point >> agreed. >> you could do a financial thing with him he is going to hear about this >> i think so. >> rahel, thank you very much. holiday supply horrors, beauty is an attractive bet, and the gap. all of that and more is coming up in today's rapid fire in a moment stay with us my retirement plan with voya keeps me moving forward... even after paying for this. love you, sweetheart they guide me with achievable steps that give me confidence. this is my granddaughter...she's cute like her grandpa. voya doesn't just help me get to retirement... ...they're with me all the way through it. come on, grandpa! later. got grandpa things to do.
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♪ ♪ welcome back, everybody. let's catch you up on a few stories that should be on your radar. time for a special retail edition of "rapid fire" because a lot is happening in this space. here to help us break down the headlines today, ike, senior retail analyst at wells fargo. also we have courtney reagan here also we can't wait to dive into the topics consumer confidence has within beaten down, but if you ask over
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at wells fargo the consumer remains s remains strong but the supply chain can't keep up. ahead of the key holiday season. saying supply changes internationally and domestically were hot topics. ike, you guys could literally see a backlog of container ships from your conference location. carters, autup 4%. bearish on stitch fix. elaborate here i want to hear about the ships >> thanks, guys. it is really interesting so the consumer demand has never been as robust as it is and the companies at the conference for saying as much the issue is the supply chain. it continues to worsen,the visibility into holiday is getting tougher. companies are talking about potentially needing to cancel orders so air freighting goods, costing a lot of money, now we're worried about maybe leaving sales on the table you have a group which is an
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early cycle group and we're clearly not early cycle anymore, you have rising cost, inflation, stimulus and demand into next year these are the reasons my group has been challenged over the past couple of months. >> i know, de llano, you agree they're in a good position since we don't have time to talk about gap specifically, tell me about the stocks you would be picking up that you think can benefit from a difficult environment like this. i mean it is a high-class problem but still a problem if people want your stuff and you can't get it on shelves. >> exactly right, kelly. that's the problem we are seeing a lot of management talk about it, they have labor issues where there's cost and rising wages and obviously supply chain issues we mentioned that are still persistent, will be persistent for a while. this is time i want to look at retailers who are doing a great job in ecommerce and direct do consumer i know you talked to -- but those are areas i want to focus on as they're able to pass on and also folks on the high margin areas, right. a lot of companies focused on
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high-margin brands, high-margin areas, you want to stick to those companies in times you see the costs rise >> we have been talking about carter's, obviously a big play on babies and kids i know you like gap. i want to circle back to thread up i wonder if you have such a problem getting new stuff on shelves, is it a reason to be bullish on some of the clothes recycling platforms? >> that's a great point you are making it is a point we tried to make this morning look, people are having trouble getting product from southeast asia over here, air freighting, boats, congestion. thread up, everything they get from a supply perspective comes from within the united states, from our closets by the way, what they're saying is they've got so much demand they can't fulfill all of it >> right >> so that's a good problem. it is the opposite of what you are hearing from the other companies. so to delano's point ecommerce is a growing area. these guys just added 150% capacity via this dc they're opening in texas next year and
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you are in the sourcing environment which favors them. so we totally agree. >> courtney, can they gift wrap recycled items this will be - >> that's a great question, right. >> a bag from thread up or whatever >> i know. you know, kelly, i became a consumer myself the first time for thread up. i literally just opened a box. i mean for baby clothes it is like you can't beat it they go through them so quickly and it just seems to make sense. >> exactly i know that's a big reason for the attraction of carter's cord, final word i'm curious, what are you hearing in terms of how bad it is i think the nike issue put it front and center for everybody how is it going to look? when we talked to sporting goods retailers in the last few weeks, okay, maybe your favorite jerseys won't be in stock but other items will be fine how are we supposed to know what there will be supply of and what there won't be >> this is really tough, kelly i think it will be hard for us to know in advance if you think about economies of scale, the bigger the retailer, the more likely they are to sort
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of make it work, to mitigate their problem, to figure it out, get it a different way, get it from a slightly different vendor so that the consumer doesn't see the shortages or the gaps in inventory. as much as you might at a smaller retailer or if it is an item at a retailer from a smaller vendor but i think that is going to sort of be the tricky part we hear it from nike because nike is sort of reporting at an off time from all of the other retailers, but it is going to be a theme for everyone reporting going forward. i did a story on friday with a case study from alex partners, sort of following a pair of shoes to try to explain what is going on in the supply chain and really the bottom line was it takes about 78% more time to get that same pair of shoes all the way through the supply chain to the shelf on consumers it costs about 36% more to that retailer that's not the price that the consumer ultimately pays >> right i think that's a good example of the issues i want to run through a couple of the names here that could be
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maybe case studies bath and body works and amazon, amazon i want to spend more time on quickly on bath and body works, delano, atlantic equities is an issue with $82 target. are you bullish on a name like that, mall-based retailer? >> yeah, exactly near term, look at price performance of the stock verses the s&p. i think they outperformed the broad market we talk about beauty and leisure, home improvement, we've seen demand for home improvement as buying homes has been strong at the highest level we have seen if you pull back the chart looking at five-year basis, only 18% for bath and body works. i think someone would start rerating, has it kind of had its run and rerating down to normal levels you mentioned amazon and other areas where competition is increasing and selling everything versus the specialized area this area i'm not in but i would be cautious if you are someone to stay in it and rerating at
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some point >> ike, where would you be on mall-based retailers generally are there any others you want to let our investors know you are bullish about if they're looking for places to go this season. >> >> well, we are bullish on bath and body works we have an out perform look, the great thing is we spent the first five minutes talking about sourcing and supply chain this play basically avoids southeast asia, 86% domestic sourcing for bath and body works. two things i want to point out about them, it is a consumables business i know it is bucketed in with apparel mall-based businesses but it is a consumable business with one of the highest margin structures in retail we forecast them to be carrying a couple extra billion on the balance sheet as of next year. it should trade like a dollar store or off pricer which gets you a stock in the 80s, not the 60s so we're bullish >> it is amazing what they've done with the consumables business the way you are talking about, the way they command the
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multiples and competitors and set and all of the rest is interesting. let's close out with amazon and see where everybody stands on this because we had a rare negative call this morning from morgan stanley lowering the price target to $4,100 which is still upside amazon is planning to hire an additional 125,000 fulfillment workers on top of the 40,000 corporate and tech jobs they were looking for earlier this month. average starting wage is now $18 an hour. amazon shares have gone nowhere this year. courtney, they have huge needs here can they even fulfill them >> that is such a big question that i keep asking too, kelly. i just don't know. we keep talking about somewhat going on in the labor market and sort of the available jobs with the skills available and the mismatch going on there. you know this happens every year seasonally for lots of retailers including amazon, but obviously this year it is going to be even more of a struggle it is a good idea to add those incentives wherever you can, whether it is pay or other kinds of bonuses or time off
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i mean you name it, but, remember, a lot of the distribution centers are not located in city centers, right they're sort of off the beaten path that becomes another challenge is where are the workers, where do they live, the ones you are trying to attract to the distribution center. >> delano, are you a buyer of amazon here? >> yeah, i'm still long, still holding. i think it is the stock you also want a dollar cost average in. there will be times where the stock rerates, but you obviously have to look at the past trajectory, it is up into the ride over time one of the things to focus on here as well is looking at the diversification of the business, what area we could also focus on is cloud and they're still the market leader in cloud i think it is going to play a part as you are looking at companies looking to be more flexible >> yeah. >> i think we could also talk about the rise in cost, especially adding across the board. when you talk about amazon you are looking at scale and i think scale will play a big part as we mentioned earlier. still able to get everything to the end consumer and i think they have a great advantage there. >> ike, i will close out with you. if you could offer a comment
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about what is going to happen with wage pressures and just the need for head count into the holiday season how is that going to affect just the retail experience broadly? >> yeah, my companies are struggling, especially in the bc side to find labor, trying to bring workers back into the labor force. it adds to the inflationary backdrop of retail it is wages, again, back on the supply chain but also look at some of the commodities. cotton, i don't know if anyone has pulled a chart of cotton in a long time, it is through the roof it adds to the inflationary pressures adding weight to my group over the past months >> normally we would look at the chart of cotton and it doesn't even crack the top 25. such long-term ramifications for everything from technology to supplies and so much more. thank you all. really enjoyed it. ike, delano and courtney reagan in this retail edition of rapid fire coming up, the code conference starts at the beverly hills hilton in los angeles.
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a sneak peek on the ground next. with crude oil hitting the highest level since mid-july, the energy sector on pace for the best month since february. we will dig into supply chain concerns across the globe heading into the winter in a moment we see access to fresh food being the global norm, not the exception. at emerson, our cold chain software and technology keep perishable food at proper temperatures, to assure its safety and quality. emerson. consider it solved.
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♪ ♪ welcome back, everybody. the code conference kicks off today in beverly hills, bringing some of the biggest players in tech under one roof. this year's guest list runs the gamut from elon musk to gary gentzler and margaret vestiture. our jon fortt is one of the names and he is there with a preview of what to expect this week jon. >> reporter: i'm just one of the names talking to the names, but you're right lisa suh will be taking the stage in just, well, you know, four hours or so from now. i will be talking to her alongside tara swisher really i think a theme, kelly, is going to be the acceleration out of the pandemic and during
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the pandemic, because we're certainly not out of it yet, and then the consequences of all of that tech acceleration that's where, you know, gentzler comes in also kris krebs talking security satya nadella as you mentioned elon musk is sort of on both sides of that, right, with leading the electric car revolution at tesla, but at the same time there's controversy over, you know, the driverless technology he is pushing so hard some would say too hard. so some accountability for tech, and also some great possibilities on how tech might be able to move things forward, kelly. >> what do you think about the facebook move, jon, the reversal on instagram for kids? >> reporter: kelly, i don't think it is a reversal at all. on the one hand they're saying they're hitting pause on the instagram for kids, but statement they're saying we will go out and talk to stakeholders about how to do it better. that sounds like product developer or maybe a recognition they hadn't built it right in the first place and certainly
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hadn't built the right pr strategy around it they've been defensive, sort of in a situation where they sound like phanos, talking about i am inevitable not emphasizing how they will make the world better with their products which is what you want to see a tech company doing if you are an voefor. >> maybe they are kicking the can down the road to borrow a fray f phrase jon fortt with more highlights throughout the week for us coming up, wild pictures out of the uk over the weekend as gas supplies run dry thanks to an ongoing trucker shortage. we will talk about why the esg trend could be partly a reason why. remember, you can catch the show any time anywhere by listening to and following "the exchange" podcast. stay with us
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♪ ♪ welcome barck, everybody. gas stations across england rand dry after a weekend of panic dry. energy supplies are tight in china with beijing cracking down on electricity use, causing key supplies for apple and tesla to have halted production this energy crunch has prices surging to highest levels in nearly three years.
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wti or u.s. crude up for a fifth straight date. natural gas up another 7% today and up 50% this quarter. joining me to discuss is john kilduff, founding partner of again capital and cnbc contributor. john, a simple question for you. is energy going the way of lumber which had a huge spike to the upside and collapsed or is it going to stay permanently higher >> no, we always have ups and downs, booms and busts in the market it is a true commodity market although lumber is probably the most extreme commodity out there. if you want to get your head handed to you, try to trade that i can tell you that right now. we are in a phenomenon i will call it right now where oil energy moll k50u8s are becoming increasingly dear. we have somehow in a short amount of time went from a period of relative oversupply to one of under supply right now. especially as it relates to crude oil which we can move around the world and even more
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acutely for natural gas which is really siloed to each and every country. >> that is what was so peculiar about the fuel issues in britain is no one was bawarning about shortages of gasoline or diesel in their case, it was a truck driver issue the real shortage, if you want to call it that, are on the natural gas side what f you want to call it that, are on the natural gas side is this going to goparabolic imagine people gather informing the cop 26 meeting next month where they are going to lay out clean energy and climate goals and people are going to be scream being price of fossil fuels and wondering to what extent policy makers are to blame. >> i hope this is an early warning signal to them to be careful. the energy mix is highly important, crucial, critical to the global economy and the welfare of everyone. it does us no good to save the planet if you are going to freeze to death in the winter
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for a lack of natural gas for example. this is becoming an increasingly important issue because what you are already seeing from these climate change pretty much erds is there is a chill in the entire, they are not drilling. they are settling longer term plans to drill for natural oil and gas because of the pressures they are feeling that's making everything that's already in the pipeline more valuable and more expensive because there is less behind it now. >> yeah. >> we are sowing the seeds a of bad energy future. >> u.s. is one of the bigst natural gas producers in the world. we have more options now to send that gas into global markets than ever. we haven't been in that situation. politicians and policy makers are used to the narratives they bring out when oil is expensive
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petroleum reserves and all the rest of it what about natural gas what political dynamic shoe we expect here in the u.s.? again, we are in a better situation. everywhere else prices are up higher than in our country it comes down to russia. where are their supplies >> you are right about the europeans and their depend endsy on russia. it is a heck of a bad place to be in. as far as the u.s. goes, you will definitely see the idea that lng exports should be halted this winter at least mentioned to you are touted. that's how tight things are likely to get. we ourselves, the united states is going into the upcoming winter with the lowest amount of natural gas in storage since about 2014 we are going in very tight when we went through this the last time, natural gas, way back into the '70s, as i was looking into it, it caused schools to
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shut and factories to shut so everyone could shelter in place during that hard time in '78 winter and keep the valuable gas we had for heating home. it is going to be a major issue this winter. what will probably happen much like you see with gasoline all the time, where the pricing -- the worst case scenario is the pricing before the season will likely happen again. we will see another big spike, rally in natural gas prices late november, early december, for the early season cold snap and then we fall potentially like a cliff back down in prices so we can assess where we are in overall supply and demand. >> that's the message. i hope we don't get to that point, although it is in china it's already to in a point and parts of the uk, factories and so forth for investors, thinking this is a sure bet, fossil fuels are scarce, prices are going up, i am betting on that going in one direction, how long can that
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trade persist? >> i would say it has at least another two years in it because -- i will tell you this. obviously, it is not a good look for a lot of portfolio managers to have these kinds of stocks in them but it also wasn't a good look to have cigarette companies, tobacco companies or booze companies. soil going to be in that bucket but they do awfully well for you in terms of returns. in the case of energy, it's because they are going to have the last bit of what we need at hand and be able to sell it at a very high and profitable market price going forward. >> so two years. we'll see. i mean, again, these commodity super cycles have gone on over a longer time and fits and starts within that time. >> as they get older they get shorter and shorter. >> thanks for you are time and for the context. still ahead, grocers are going to have to make more room in the alternative meat section. the new beyond meat odpruct
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hitting shelves next month right after this ♪ ♪ ♪ ♪ ♪ ♪
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welcome back, everybody. shares of beyond meat up nearly 3% as the company is set to launch chicken in grocery stores kate rogers has the details. >> beyond announcing today its meatless chick tennessee ders are going to be available in select grocery stores in october. the tenders use fava beans as a protein source and the company says they have half the amount of saturated fats as a traditional chicken tender the ceo told me the company is working on building out plant based options. both ends of beyond's business have been impacted by the pandemic as restaurants shuttered and consumers loaded
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pantries with groceries last quarter. its products do continue to do well in retail supply chain issues haven't impacted the company or this product, he added. this is the continuation of the chicken roll out, which launched nuggets and strips in restaurants over the summer ask. impossible foods launched its chicken product made from soy bean in select restaurants beyond meats is higher 3% today but down about 9% year to date. >> didn't they have a setback? was it dunkin with the breakfast product? >> yeah. last quarter this came up. brown said they are still working with dunkin. but it wasn't as widely available as it had been i did note in this recent rollout of chicken, beyond was expanding its footprint with
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walmart. they are continuing to reach more consumers and lower the price point and eventually bring it below what traditional animal meat products would go for. >> that would totally change the equation for people who might look to you be institute kate rogers with the latest on the alt meat front that's it for the "the exchange," punch starts right now. let us all trait meatless chicken tenders. i thought they already were. welcome to "power lunch," everybody. here's what's ahead. yields pop the ten-year breaks a key level, is the bond market about to drive a great market rotation? what could it all mean for you and your money the race to regulate crypto. do stable coins pose a systemic threat. >> that's the question regulators are grappling an expert will tell us why he thinks stable coins need t


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