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tv   Closing Bell  CNBC  October 4, 2021 3:00pm-5:00pm EDT

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bought. >> that's what i was going to ask you. buy signals and if it cracks the 200-day moving average - >> over the last year it has you can argue about the statistic statistical significance but it bounces back. >> professor chu. >> hardly but thank you. >> thank you thank you for watching "power lunc lunch" "closing bell" picks up right now. all right. welcome to "closing bell." i'm wilfred frost at new york stock exchange the major averages lower with the nasdaq seeing the biggest declines into the final hour of trade. >> i'm sara eisen. welcome. let's look at what's driving the action facebook is sinking down more than 5% after the whistle-blower behind stories in "the wall street journal" made the identity public telling "60 minutes" that facebook chooses profit over safety
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much more ahead. and the rest of the faangs are in the red with apple and microsoft. treasury yields are higher energy is climbing as crude oil prices hit the highest levels in three years on back of today's opec plus meeting. off the lows but still heading south. >> not far off the lows. coming up, bridgewater karen karniol-tambour will weigh in with opportunities in this market we'll speak with the attorney for the facebook whistle-blower about the decisions to leak company documents, file come plants with the s.e.c. and reveal her identity. let's get straight to the selloff as the week begins with more volatility. what are you watching? >> obviously we came into the week having bounced on friday but a fragile technical condition because we had this
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short term downturn going in the s&p 500. slightly below friday's lows just sort of hanging around this 4300 level on the s&p why what's significant to me is you down on price you go back in time. we basically have gone back to levels in late june. so three months of gains swept away but it still remains a catch down move because the biggest stocks are the weakest in the last weeks, they have been kind of going down to meet the average stock out there. that's visible also if you take a look at the nasdaq 100 etf compared to that equally weighted russell 1,000 with a proxy for the typical stock out there. you see the massive divergences over the years and then you had this huge uptrend in the nasdaq while the average did nothing and the latest downturn is giving up that advantage that the nasdaq 100 have i think you can take a little be
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the of comfort in the action today in the big stocks because it seems very mechanical outside of facebook, all down 2.5% to 3% seems like a skimming off the tom. facebook down an extra 3 percentage points on top of that but tends to show you there's not macro meaning here and about preference for the moment and they had a huge premium built into them. this is the goldman sachs financial conditions index when this is going down loose financial conditions we are off the best or loosest levels things like the volatility of the market dollar going up. but this remains incredibly loose by historical stands as loose as you ever get and maybe seen the best levels and the best help to equity valuations but not anything like a panic move and higher and tighter than this in march of
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this year when yields were much higher. >> so the nasdaq now what? 7.3% off the highs. >> yeah. >> big tech continues to be the theme facing pressure and some people blame inflation but it is not like they're skyrocketing. they're within a range so what is this about? the fed getting ready to pull away some stimulus >> i think it's about where the marginal dollar prefers to go given the fact that covid cases coming down, seeing the other reopening dynamic just the fed seems like it's complete lit committed just about to tapering but the relative advantage of the latest macro news is and just not necessarily helpful overall valuations is where the big -- where the air is mostly underneath the market in the valuations so i don't gothink is about something happening but
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that's why it hits the most. not yields yields did nothing on a net basis. doesn't help the facebook new just that's an exacerbating factor but not driving facebook down 3% for example. >> thank you so much for that. facebook down sharply today about 5% as things stand let's get to the story on that front. the move comes as frances ha 2k3wu -- haug en revealed herself as the whistle-blower. >> facebook demonstrated they cannot act independently facebook over and over again shows it chooses profit over safety subsidizing, paying profits with the safety i hope this has a big enough impact on the world they get the fortitude and the motivation to go put those regulations into
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place. that's my hope. >> both facebook's vp of content policy appeared on cnbc pushing back on the accusations. >> if we were a company who didn't care about safety, about trying to prioritize profit over safety we would n't do this research the point is understanding how to do better and make a better experience. >> facebook taken steps to try to bring more transparency, more accountability, more extra engagement is there more to do? we're always working to improve the experience for the people that use the platform and will continue to do that but 3 billion people or more are using the platform daily because they do see us as a safe and secure place to communicate with friends and family and build community. >> joining us now a head of the testimony tomorrow is one of her
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attorneys and counsel at whistle-blower aid thank you for joining us good to have you with us. >> thank you. >> huge coverage on this content from the client's whistle-blowing documents including on this network. my first question to you is if you can just outline clearly what laws you think have been broken by facebook. >> thank you for having me on and i want to applaud frances' courage and dedication to do what she's done. as you can imagine there's not that many whiss l blowers within the tech community and this is different and unique the reason why we filed disclosures with the securities and exchange commission is we believe the company put profits over people and inflating the individuals on platform so that as to drive up revenue and clicks and profits from advertising.
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we do believe that there's something that they call single users with multiple accounts where you have perhaps a user on facebook but the same with multiple accounts and also on instagram and the company would double count those for purposes of inflating the numbers for profits. >> so that is a very serious accusation if it proves to be true. though clearly separate i would argue entirely separate from what has got the most coverage over this hours which is the idea they're prioritizing shareholders over stakeholders, profits over integrity and safety the thing you suggest is law breaking is separate from that that's got the most coverage. >> right one of the things that the client is wanting to have happen is for facebook to be held accountable and right now there aren't a lot of rules and regulations in place for social media companies.
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we all understand that facebook or something like facebook is always going to be around going forward. it is not going away that's a new normal so what has to happen is congress has to have the information inside information so they know what the company knows and when they knew it and also they need to understand that the company knows that there are things in place that can be done to ensure that there is a safe experience on facebook. look whether it's january 6 or genocide in myanmar, facebook has had an impact on those things because it is the vehicle by which misinformation is spread globally. so in order for that to be contained governments need to know what facebook can do because facebook knows what tools it hasality the disposal and not using it. >> one thick that's central in the conversation over 24 hours
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is that facebook says some of the reports that your client leaked have been taken out of context or at least not been shown in full context. do you think it's possible or fair to say while some of these reports have suggested internally to executives at facebook that perhaps the platform is doing harm and may be in possession of other reports that say otherwise and may have concluded internally the net effect is they do far more good than bad even if a few single reports that the client leaked suggest they do more bad than good? >> first, i would defer to the documents that we have first and that the government has and that congress has okay secondly, when they're talking about balancing certain things what are they balancing against? do they look at the choices saying we understand that we can implement certain processes and
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procedures to ensure that misinformation and dangerous conspiracy theories aren't flouted around but will it reduce mean interactions for example, prior to january 6, during the 2020 election, it is my understanding that the company did implement certain safety measures because of the concerns surrounding the election however once the election concluded they rolled back a large number of those safety mechanisms and what do you have? you have something like january 6. so i do believe that facebook is a significant contributor to what is going on and they could do more. >> andrew, just wanted to clarify the position on the s.e.c. cases that you guys have been brought forward alleging they put profits before safety but facebook is a for profit
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company and the s.e.c.'s job to project shareholders who i would think is happy with facebook that survives the scandals, grow the profits and its shareholder returns so why go to the s.e.c.? >> because there are -- because facebook touches so many different things globally, it touches individuals on a personal level you have probably seen the article in "the wall street journal" about how it impacted teenagers. that's something that investors should probably know about to assess the value of the company but it is also true that we have evidence and information that suggest this or establishes that facebook padded the numbers of individuals or users on the platform so that they can make higher revenue from advertising and that is something that i think could be fraudulent.
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right? something that the s.e.c. should be aware of and look into and make a determination there so the thing is that a lot of the news that's been made over the past few weeks is made news because it touches individuals on a personal level and that's understandable but there's also information there that touches on the company's bottom line and perhaps questions about what they're telling investors about the health of the company. >> a lot of people comparing facebook to tobacco companies. mark benioff did it years ago. i think that's what we'll hear tomorrow what rules and regulations and authorities are you looking to work with to come up with guardrails like the tobacco company that got regulated because it was bad for society >> first i'll let frances get
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into that tomorrow when she testifies. she knows the specifics. there's no one silver bullet to make facebook safer. there are a number of things to ensure that the interaction on facebook and individuals globally have is safe. but what i would want to frame here is that when you take a look at the impact of the company had on the world in order for meaningful regulations to be drafted, congress and global regulators need to know what the company has -- what tools they have at their disposal to correct those deficiencies right? so we're talking about comparing it to big tobacco. right? big tobacco was an unhealthy product and going to use the or not going to use it. facebook is not a product that can be inherently dangerous. remember, it started out as a
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way for individuals to connect while in college family members and friends to share pictures and videos. there's nothing wrong with that. the issue is not destroying facebook the issue is making it safer so there are things that the government can do once it's aware of those guardrails can be so that way ensure that the product that we have access to is safe. >> andrew, that debate comes back to running a company and the interest of shareholders versus stakeholders and have often on this network and how to balance that are you suggesting that that debate goes on regularly internally at senior levels? does your client think that happens and what does she hope will come out of this? is it that a wave of further dock n't -- documents released or do you think that's not a debate that they're having
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internally >> i won't speculate about the debate at the higher levels but what i can say is we need robust debate in congress and in parliaments worldwide about what can be done. our client, we have been in touch with a number of parliament in london this is not just an issue here that touches the united states it is a global issue so what we need is those individuals in a position of authority to have access to what facebook knows. and tools that at it disposal to better regulate the company. >> what do you say what when the company responds that the issues including the decisiveness in society, not news that teens have had issue especially teenage girls with image and they're putting in safety many shs to make the product better how do you respond to the
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counter attacks? >> we want better algorithms in place. that's the goal here what i would say is take a look at the impact of disclosures to date facebook was going to roll out instagram for teens and now that's on hold so the issue is, yes, mental health issues and body dysmorphia always existed but the platform is making the worse. just like the spread of disinformation and misinformation that will always exist but this is a vehicle by which this information is spread worldwide and you have individuals sucked down the rabbit hole and that can lead to self harm. i'm sure that the company doesn't want that either but they do have tools in place to
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mitigate that and the question is are they doing it i don't think that they are. >> andrew, a final quick question from me just so everyone is aware. did your client try to raise the issues with management and challenge the status quo internally before deciding if she couldn't do that internally that whistle-blowing was the only option? >> i would put it this way being a whistle-blower is an extraordinarily difficult thing to do and be that act to go outside of the organization to disclose what you believe is a violation of law, regulation, waste or abuse. given that that is an action of last resort, yes, i believe that actions predated this ultimate disclosure and whistle-blowing is not the first option shall we say. >> andrew, thank you for joining us. >> thank you for having me on. >> good to talk to you we'll talk much more about facebook throughout the show including a conversation with
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former facebook chief privacy officer chris kelly and ask him if the company is in legal jeopardy facebook stock down more than 5% and still down facebook, instagram dealing with a big outage a closer look at the tech wreck and discussing the stocks weighing on the nasdaq and later the jeffrey's analyst if he would recommend bying any of them on the dip today. our retirement plan with voya, keeps us moving forward. hey, kevin! hey, guys! they have customized solutions to help our family's special needs... hey, graduation selfie! well done! and voya stays by our side, keeping us on track for retirement... us confidence in our future...
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nasdaq getting slammed again today as facebook and not just facebook all the other mega cap technology names are plum meting here down more than 2% on the nasdaq. josh lipton is at the nasdaq market site with the biggest movers. >> let's dig in starting with amazon which is certainly one to watch. 15% off the july high. the only faang member negative in the month alpha fete up 50% this year and 10% off the high the smh, the etf that tracks the chips, down about 8% in the past week every member 0 of that etf in the red of today's trade nvidia down about 15% in the past month up about 50% in 2021 work from home names also rough. both peloton and zoom down more
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than 30% in the past three months and more than 50% from the respective highs analysts say tech is facing multiple challenges here touch comps and elevated valuations among them. back to you all. >> josh, thank you so much for that. down 2.4% on the nasdaq. s&p down 1.5%. dow down over 1%. the increasingly uncertain market and where she is looking to put money to work here's a check on bonds. treasuries muted today compared to big moves for equities. 10-year round about 1.48 or so yields have ticked up a little bit but not too significantly. certainly not the moves last week we'll be right back here on "closing bell.
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welcome back time for a news update with frank holland. >> hi there. at this hour, one law enforcement officer is dead, two others hurt in a shooting aboard a train in arizona that's the report right now from the local nbc affiliate. police say a person is detained. amtrak statement said there was a shooting on a train from los angeles to new orleans no injuries to the 137 passengers and 11 crew members they were all evacuated. almost all the members of a union representing film and tv production, authorized to vik. first time in the history of the international alliance of stage employees. negotiations with producers continue for a new contract. traffic from canada to the u.s. is moving on a bridge that links detroit to ontario it was completely shut down today after what police on the canadian side called possible
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explosives found in a vehicle in a border search. wilf and sara, back to you. >> frank, thank you very much. some other very sad news to report today tobias levkovich, frequent guest here on "closing bell" has tragically passed away hit by a car crossing the street in long island about a months ago and died of injuries on friday and only 60 years old. many cnbc viewers will know him as being the well regarded, charming insightful market strategist that joined us regularly. what you may not know is how extraordinary of a person tobias was. he was chair it wbl the money and the time a deeply devouted family man to wife and kids and especially his grand kids hugely involved in the jewish community. funny and scar castic and one of the most decent people you have
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ever met while it is terrible and shocking it struck me how impactful he was on so many people in his life basically anyone he ever interacted with he made them feel like a friend. >> you have hit the nail on the head i only knew him through our professional relationship as a favorite guest of the show not perhaps as close as he was to you and a brilliant guest and will miss the insights on the market that's how i knew him and yet i feel like the relationship went further because he'd always be inquiring prepandemic in person, during the pandemic on email or on air about the personal lives and he genuinely cared about those things and just a good man, a kind man and our deepest condolences to his loved ones. he will be missed. >> very sad. tobias, we will miss you and on behalf of everyone on "closing
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26 minutes left to go. let's check the individual market movers. barclays said union pacific is best in class. the stock is up 2% today jpmorgan reiterating levi's up the stock higher than it is at the moment but still up nearly a percent. jim cramer highlighted both in the morning news letter and sent
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a second email in the day to the members of the investment club of what he is doing with facebook in the charitable trust. to learn more go to or point the phone at the qr code there on the screen. daily email and sometimes followup email just you don't want to miss out on the investing club with jim. >> the qr code works i tried it very cool he has his own we can aspire to get a code of our own one day. >> for sure. nasdaq crushed today. we'll find out if there's buying opportunities talking to brent thill from jeffries. later jj kinahan weighs in check out the vaccine makers under pressure again today moderna seeing the biggest declines down 5%, a continuation of friday on the better merck
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some of the deep selling there >> i think it's a combination of many factor just the whistle-blowing case, the outage, the overall tech is down right? you see others down as much if not more so broader tech across the board is a speed bump. not aroadblock over the long haul and investors are going to wait and let the dust settle on this before they jump back in on facebook in the interim i think there's an interesting name where the dollars are flowing whether it's back to amazon or the trades that haven't worked. facebook has worked really well this year so you have some short term profit taking on the story right now. >> facebook has worked and yet it's still a lower multiple than the other tech stocks especially near twitter or a snap is that regulatory overhang that facebook is dealing with for a while and ramping back up in the price at all at this level
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>> i think it's becoming embedded in the stock clearly off of -- close to 15% off the highs. sec factor is when zuckerberg talks about the next generation of facebook the investors hit the air brakes saying we'll see big investments coming from facebook to power this next leg. the current wave of advertising what they do on the platform is not over but any time you have a management take talk about the next thing there's concern about what does that look like and require, how long does it take to get there this is a three to five-year plus journey and no investor should be concerned over night it ruins the model but the big question is what do advertisers do in the past with regulatory scares you had advertisers not bail from the plat fortform andw
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the question is are advertisers going to start to spend the money in other platforms there's been talk about the shift to connected tv. does this go to google or other platforms? there's others with exposure to the young teenage audience that we all have to be concerned about. snap and tiktok are obviously two. this is not just a facebook issue. >> why is broader tech selling off so much all of a sudden? for a long time the prospect of inflation and rising rates didn't matter. now it does. why that change? >> if you have a huge run in tech, right, last year no one thought that we'd see tech go to the valuations we have software trading 15 times revenue. we have never seen this. when you have valuations go to where they went and again no one that sat here last year
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predicting to see 40 to 50 times revenue on the stories and those are ceilings you have valuations come back in and healthy. when you talk to the tech trading desk our head trader mike toomey said you are quiet most of the hedge funds have been derisking they don't have full commits on and then long only clients are very calm about today's move because i think anyone seeing what's happening in tech in the last year and a half realized it's an incredible run and not a single money manager saying this market trades at a crazy discount i have to back up the truck right now so this is healthy as we have said. you can't go up in the straight line and a lot of this is just driven off of multiple compression. the fundamentals from where we sit are still exceptionally
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really good. so we don't see it in the fundamentals this is just more market multiple compression in my opinion. >> brent, thank you so much for joining us we appreciate it. >> thank you. up next, engine 1 takes a stake in general motors and fintech stocks hit hard. those stories and many more going inside the market zone with the selloff holding down. down 280 on the dow. the nasdaq down about 2% we're back in a couple industrial experience and insights. meet honeywell forge. analytical software that connects assets and people to deliver a cybersecure record of your entire operation. so that everyone, in your boardroom and beyond, speaks the same language. honeywell forge. industrial grade software. it's another day. and anything could happen. it could be the day you welcome 1,200 guests
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zone commercial free covering of the action into the close. cnbc senior markets commentator mike santoli is here and lindsay bell with us, as well. let's kick things off with the broader markets. stocks selling off today wiping away all gains made on friday the nasdaq the worst performer on track to close at the lowest level since june 21. down 2.2%. mike, this is very much tech leading the declines, having of course over the summer propped the broader markets up. >> it is a give back s&p 500 back to late june levels and didn't have the higher highs the way that the nasdaq 100 did. the s&p itself indeex is in a little bit of a fragile state. we kind of lost that automatic rotational uptrend we had for a while. it seems as if we're not really talking about new kind of macro
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concerns making the way into the market very much seems flows and unbalanced equities down today so it's still kind of a getting oversold on the index level and doesn't mean that the declines stop on a dime. >> lindsay, we are about to go into earnings season again really in full swing you track the expectations if fedex or nike are any indication it's going to be a little bumpier than the previous season what are you looking for >> yeah. it's not going to be an easy track. not this quarter we have seen going into the reporting period estimates have come down for the first time in at least four quarters so that's a good sign for corporate america. of course fedex, nike, others
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they mentioned that supply chain pressures putting on the profitability and a concern. you hear it across boards and impacting margins so that's a key watch item for investors this quarter no doubt but i think that it is not a one size fits all story because you have seen companies like darden to expand margins. lennar is in an industry to benefit from that. it's not going to be one size fits all but looking at the margins of operation have expanded quite substantially we are about to hit 16% on a margin level i think of course that's going to come down and can be under pressure next couple quarters and compares to 14% historical
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average margin so it's a mid cycle. investors have to get used to slower growth but above historical trend. >> down 1.5% on the s&p. social media stocks hit especially hard today led by facebook julia boorstin with the details. julia? >> that's right. facebook shares plum meting down about 5% on more allegations from whistle-blower frances haugen saying facebook prioritizes profits over safety and misled investors coming as facebook and what's app have out you knows around the globe facebook says it's working on the problem. in yet another facebook headline the company filed a response to the ftc's amended anti-trust complaint saying they cherry picked data and failed to move it has a monopoly. other social stocks are lower
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today. facebook down 5.5% but twitter, snap and pinterest down about 6% back over to you. >> julia, thank you. lindsay, every other facebook scandal, there have been so many and regulatory concern, has been a buy for shareholders is this time different >> yeah. i'm not so sure it's different what you have to think about coming to facebook is that they are still one of the largest receivers of ad revenue out there and i don't think that's going to change overnight even with regulatory issues so something not investors jump on board and dump facebook shares today. 5% isn't much. you look a little bit longer this could potentially be a buying opportunity for facebook but time will tell. >> mike, it is interesting to see the likes of snap and
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twitter down more and cements the fact that facebook's move is probably the broad nasdaq selloff. >> facebook did have a per of underperformance coming into the week and maybe they have already discounted some. 16% off the the high for facebook it is a mix. a give up trade in general in social media with facebook if you want a situation where the maximum concentration of bad news is pumped into a stock all in one day you kind of had it today with the outages and everything else and the result is the stock getting cheaper is now at basically a market multiple. trades in line with the s&p 500. despite the fact that people expect 20% top line growth into next year. is that going to change? somewhere else for $120 billion in ad revenue to go in an efficient way outside of facebook it is unclear and the situation
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to face. a hated company. the stock less hated i think by hedge funds and becoming very interesting in terms of where it's valued pricing in the bad news. >> facebook down weighing on the nasdaq the laggard of the majors down 2.4% with 6 moneys left. fintech had a tough day. kay rooney with the details for us. >> hey high growth fintech names slammed by the rotation seeing out of tech stocks the buy now pay later platform down 9% and announced last week launching crypto and an outperform lately. square meanwhile down about 6% heading into the close this one definitely trades like a tech stock year to date gains are now only around 3% after the big outperformance last year paypal down roughly 4% heading
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into the close coinbase and robinhood negative but faring better today off looks like 1% here and robinhood down 2.5% heading into the close today. back to you. >> bitcoin is acting well up more than 300 bucks despite the big tech selloff right now kate, thank you. shares of tesla and gm are higher today despite the broader selloff. phil >> the move for general motors is nice and follows an investment from engine 1 taking a stake. why? they think it's a good investment prime for growth and think shares could triple over five year just we had a chance because what's interesting is coming as we have had a chance to drive the hummer ev, one of several in the gm portfolio to roll out later this year and
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then the next couple of years. keep in mind a new bat ri platte form and gm has high hopes making a big difference for the ev sales. speaking of all electric, tesla reporting deliveries over the week for the third quarter and sales better than expected up about 27% i believe. 241,300 deliver jd year to date sales up 97% nice move higher for tesla today. for a while over $800 a share. they have an annual meeting later on this week back to you. >> phil, obviously this network is most concerned with the financials and the stock prices but we also like the cars. what was it like >> hah look what i liked the most about this is not a vehicle that you drove and said that's very nice. an electric vehicle.
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gm has to get sfwoo the mind-set and i think they're getting there to say to people we'll roll out something and you'll want to drive. electric or gasoline powered you want to drive it there is that feeling and attitude with the hummer ev, a way you think that tesla is exciting drive the hummer why that's what i like about this. you want to see the automaker stepping up to the game with challenging tesla. you have that now with the hummer and frankly i think probably going to get that with the f-150 lightning. we haven't drove it but i think ford wants to make exciting vehicles. >> thank you car review thank you. mike, how's tesla look quickly higher today how's it positioned? >> the stock is actually acted quite well for a while now it is still resumed an uptrend anniversaried the beginnings of
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the crazy surge from 400, eventually back to 80 0. the volume is funny. 10 or 12,000 better in terms of deliveries but that's enough to keep the story moving forward in a world they seem like they might be able to evade the worst of the semiconductor shortage and volumes perhaps next year's demand for the industry as a whole. >> market internals? >> not as bad as you would think. short answer about a 3 to 4 ratio of up stocks to down volume. much better than the headline indexes are doing and underscores the point it is a top heavy decline today and you have decent traction below the surface. the nasdaq is not as well tractioned more than twice as many. reason to highlight it is new lows above 250 is significant
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we haven't seen too many days of 100 plus net new lows there so the damage is definitely spreading through the nasdaq maybe getting a little bit of a crescendo some point soon. volatility index underperforming you might say what the indexes are doing. not panicking. around 23. we have been at the levels roughly in the s&p a few times in the past several day just a rebuild of volatility on a monday and part of what's going on today but if you need that huge shrieking panic you don't get it from the vix today but looks like a mini uptrend. >> we are sharply lower but all the lows of the season the dow the outperformer s&p sector shows the weakness. tech on the pile
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the two sectors down both more than -- higher most notably energy. oil continues a remarkable rise. the averages are lower across the board as the bell goes dow down 1%. s&p down 1.3%. nasdaq down just more than 2%. starting the week with a selloff. welcome back to "closing bell. i'm sara eisen in for wilfred frost and mike santoli i'm sara eisen along with wilfred frost i should say. >> thank you, thank you. still here >> dow closed lower. down 505 at the low. off the session lows but it was down pretty much all day long is ins the open trying to go positive the biggest drag is -- down at the bottom of the list
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investor day today and ibm s&p 500 closing lower 1.3% energy, utilities and real estate strong. nasdaq down 2.41%. this has been a steady theme technology underperforming the market down for the sixth time in seven days and off 7% from the highs small caps down 1% we have more with karen karnio will have tambour and facebook in the s&p 500 after the whistle-blower that leaked documents around facebook revealed the identity on "60 minutes. former facebook chief privacy company and general counsel on the legal jeopardy facing the company. lindsay bell is still with us.
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tiffany mcgee and jj kanahan joins the conversation first to you, mike, on the selling today. what precipitated it we saw little bit higher treasury yields. is the bull market thesis still intact economy is doing well and stimulus in the system and that the market can climb this wall of worries >> broaddy speaking it is still intact and undergoing a stiffer test of a while. calling it really a reset and what's being reset expectations lower for earnings and really how relentless the market climb had been going into september. we have gotten the end of the streaks when we got the final kind of minus 5% close on the s&p. it did sort of widen the bands of what's going on when the mega cap stocks start to get purged after weeks and weeks when the average stock on the defensive and starting to
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bottom that suggests that we are pretty far along into the process if in fact there's not new stress or credit issues popping up and there haven't been so that's where i see it oversold >> tiffany, what is your take on that big picture questions of where markets stand? do you see buy opportunities than opportunities to take profits? >> i do, absolutely. listen we didn't have a good day and didn't have a good september but that's okay because we had a good year so september we were down 4.8%. never feels good any number of headlines affect this but if you're a long term investor you are not looking or measuring things on a daily or a weekly or monthly or a quarterly perspective but over a year, particularly three, five and ten year time periods but you can
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look at what happened with the s&p about two weeks ago on that monday with that intraday drop of 5% from the 52-week high. the average stock on the index down 14% so it's a buying opportunity for investors dodi verse if i with lower positions. things are on sale >> like technology is that where you'd be looking >> absolutely. i'm clearly a tech investor and some names that i think i have conviction around but are down look at a shopify, far fetch i love the e-commerce plays and some argue were of a possibly potentially overvalued i didn't think so. ing the it is hard to put a valuation on the high growth companies but those would be the names to look at >> jj, what's your take as to
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overall sentiment out there at the moment amongst your clients? have they already turned more cautious earlier in the summer and now a chance to turn bullish again or just taking hold? >> wilf, look. we released the imx today from last month and what we see on there is the clients are increasing to have some exposure to the market overall but they're going to names that they traditionally gone to when things get shaky apple, facebook, little bit of microsoft so those are the types of names they go with right now and one thing that changed this month is we had supply chain come in for the first time evergrande for the first time. seems to be more concern overall going forward and most interesting part to me last month is the clients were sellers and then buyers heading
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into october and unique going into this month overall so we'll see if the apples and fords of the world pay off and selling stocks rallying. tesla which continued to go up delta airlines bank of america. american airlines. very interesting compared to what they were buying tesla sold amazon. sold the airlines and the millennials bought airbnb. i think people are selling things as they rally and looking for things that may have sold off a little bit if there's bargains or things under price compared to higher fliers that have done well through the last month and a half or so. >> what about cash levels overall? where do they stand relative to where they've been >> overall it is pretty consistent for a last few months in toerms of amount of money people have been putting to work
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in the accounts. >> let's get into facebook of course in the spotlight today. closed significantly lower after a whistle-blower behind a trove of documents revealed herself. her attorney joined the show last hour saying while stories of misinformation and the documents making headlines it contains serious accusations of potential fraud. >> we have evidence and information that suggest that or establishes that facebook had in fact padded the numbers of individuals or users on the platform so that where they can make higher revenue off advertising. that i would think is something that could potentially be fraudulent and something that the s.e.c. should be aware of and look into and have to make a determination there. >> we did reach out to facebook on the particular accusations.
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they did not respond might be because their email is down if that's proven it is huge. >> it would be if it's a disclosure issue padding the results. i think you have to also though keep in mind that one thing that advertisers do have is their own ability to gauge - >> exactly. >> the residents of the ads. the pay back they get. not perfectly. the numbers matter but can they be guided by the stated users numbers? i tend to doubt it and it does cut to something new which is more than just content management more than just filtering and the general perhaps social ill effects that people have been focusing on for a while. >> somewhat suggested, i don't know what you thought, sara,
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wasn't hard evidence of law breaking which is what's got the coverage so it was kind of an odd moment i thought. >> yeah. i think that we'll have to dig into that more to see what the case is but, tiffany, the social issue is important because you have been looking at this through an esg lens and i feel like this is a test for how much investors care about esg and societal benefits. if this is a company putting profits before that there's nothing wrong with that and illegal about that for profit company and shareholder profits have been maximized here but coming at the expense of society then maybe investors don't want that above everything else. >> yeah. so this is a perfect example of using esg metrics to identify risk in a company and can't see everything on a balance sheet and you don't mess with people's
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money or children. people don't like this and especially the clients i serve, foundations and endowments moving to mission alignment within the portfolio we invest through an esg lens and people including investment professionals think it's social or value investing but it's using these responsible metrics to -- lining them up to the traditional metrics to make an investment decision and the hope is to gain more insight into a company. that's all it is it can be all of those things and through that perspective i look at the metric that is we use in our system and on a scale of 1 to 100 there's an overall score of 60, 61. that's not great and the biggest detractors is product spoirnlt and being a good citizen how they interact with the
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community and public health and that score, those scores have been going down consistently for facebook since 2016 so they have road to go and have to get this right. >> tiffany, forgive me if i'm wrong on this but i believe you do hold facebook is that right? >> i do. and what we have been doing -- sorry. it is hard to hear you guys. what we have been doing is trimming the position over time so again this is not facebook's first scandal but we have been paying attention to it and really trimming our position in facebook used to be much greater than it was with conviction around the company and the innovation but over the years facebook culture, facebook -- how management reacted to the scandals and this news, all of these things put a dent into not only the way we invest but how our clients view these
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companies. there are foundations that don't want companies like that and the portfolios to be aligned with the mission. we're using it as a way to identify material risk in the companies. the controversies, a thing we watch that investors who invest think an esg lens is the controversies orr time companies do have controversies but stacking those over and over again and reported in the media over time that affects the bottom line, partnerships and sentiment and over time it is not a good thing and we can see it reflected in the price right now. >> yeah. i guess if esg is a core factor some wonder why it wasn't sold earlier if the flags were being raised. >> it is very small. so i'm talking about taking the
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position from about -- it's among the individual stocks in our portfolio is probably about like -- used to be about the fifth larmgest position and now the 30th largest position. it is very, very small and the only reason we still hold it is some clients still want to hold it but i foresee over the next year we won't hold any facebook whatsoever. >> lindsay bell, no doubt facebook had a bad day and so did the other oesocial stocks. all down there at the bottom of the pack do you expect this weakness to continue >> i think we are reaching an oversold level technicians on the nasdaq looking at 14,200 as a level of support and it was for today we'll see what the next several days bring within the tech
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sector the action today in tech wasn't aided by a rising yield. the 10-year was pretty stable today, too, so i found that interesting. also the vix while it moved up it wasn't a substantial move higher and could be people taking profits in the tech sector and preparing for what could be another leg up in the reopening sector looking at the sectors that performed today of course energy is leading the way and then saw some yield names benefitting so reits, staples and utilities and underneath that industrials and materials hanging in today and tells me that people might reposition for the leg up into the end of the year with the economic environment potentially improving. the leading economic indicator index improving. covid cases coming down and people are looking for a shift into the final months of the
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year and a little bit of preparation and deal with the pressure to get us to that point. >> thank you all very much for joining us today we have to leave the market zone there. up next facebook's former chief privacy officer will join us bridgewater's coio-c of sustainability will join us. we're back if n two minutes.
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restore as fast as possible. noikt reporting that facebook dispatched a team to the data center in california to manually reset the servers in an attempt to fix the problem so seems like facebook is trying to address a very big issue on a day when there are other negative headlines about the company, guys. >> do we know if they -- service. sorry, sara. is that run by them or outsourced to a microsoft or google or amazon >> so facebook does manage its own servers. it is a big enough company that it's not uncommon for a company to be managing its own technical infrastructure like this. i'm just going through the latest on this and there have been a lot of questions about whether maybe the result of a hack a number of people said it is not. a ceo of cloud fare said there's nothing problem at africa a
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hacking perspective but that the problem is likely with the facebook servers not letting people connect so obviously huge problem for facebook global outages for its three major platforms. >> julia, thank you. facebook closing down about 5% today the whistle-blower that leaked documents to "the wall street journal" revealed her identity frances haugen told "60 minutes" facebook chooses profit over safety haugen's attorney joined us last hour ahead of the congressional testimony tomorrow listen. >> a thing they want to have happen is to be held accountable. there's not rurals in place for social media companies what has to happen is congress has to have the information, inside information so they know what the company knows and when
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they knew it and also they need to understand that the company knows that there are things in place that can be done to -- to ensure that there is a safe experience on facebook >> joining us now chris kelly, former chief privacy officer and general counsel at facebook. good to have you back on the show, chris. my reaction to the piece and hearing her talk is this is terrible but it's hard to figure out what ultimately comes next for facebook from a regulatory and legal perspective. what do you think it is? >> i think the company should see this as a huge opportunity to try to reset a lot of the thinking of the way that the company approaches this and get it right and i think that you've seen nitd limited statements so far an intention to do that. but that has to be followed up with a lot of action and huge potential in that the question that looms over the hearing
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tomorrow and the provision of documents to the s.e.c. and other things is how -- what's it going to show? some of the discussion about "the wall street journal" piece and particularly the headlines not completely backed up by the documents that were actually released and the esearch that was done internally at the company was shown to be a bit more inconclusive than is presented in the public discourse but instead of spending the time dwelling on that which i think you have seen in the statements so far from the company they should see it as an opportunity to try to get this right and going to try to empower those in the company trying to make sure that the research shows that the research shows how to move this path forward the accusation from the whistle-blower and from a number of others time immemorial
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attacking facebook is putting profits over the right thing to do and i didn't see that when i was there. we made it -- quite a number of moves to enhance safety that we knew would limit growth when growth was critical for the company, expanding into high schools and other actions like that but 12 years ago last time i was at the company but i have worked with the company from time to time since then and there is an empowerment of those in the company to do the research that i hope the company embraces at this point. >> part of the problem is the trust factor around the idea that they hid it what they were doing is making decisiveness worse and eating disorders worse for teens and not what we heard from the public statements from mark zuckerberg defending the company on capitol hill and that gap in
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terms of what they know and what we know, it makes it harder to believe they're doing anything to fix it. >> i can see how people see it that way and if the company were truly trying to avoid the issues it wouldn't do the research internally so the fact that it's -- could be disinterpreted or offer a particularly harsh interpretation and some are serious about addressing that and needs to empower those serious to address it and can talk publicly about aiming to make it better and the question of profits versus a healthy ecosystem is something that mark understands well and should be seen as an opportunity to try to get that right >> do you think this is the biggest challenge they faced of the many over the last couple of
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years? they even put the response out to the recent accusation of anti-trust complaints from the ftc today. sort of slipped under the radar a bit but is this the biggest challenge that could lead to change in a positive sense or damage them? >> this is truly significant in a way that the anti-trust case because the market definition so poorly pursued by the ftc not as much as of a challenge as this is for the company and encourage them to see this as an opportunity to try to get the things right that the company shouldn't be neutral about disinformation, about insurrections against the government and neutral about sort of just attacks on -- about horse dewormer being a healthy substitute for active covid vaccination. the company had taken extraordinarily aggressive means
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about romoting covid information, proper covid information. mark did interviews with dr. fauci early on and they did a good job to addressing that for a time and it is pretty questionable whether they continue that right now. >> i want to ask a personal view on a question having worked there and knowing the company so well i'm interested that the company's pushed back on this over last 24 hours because i didn't think it was that new part of the accusations nor particularly illegal but nick clegg in the comments certainly pushed back on this topic but do you think that facebook has led to a more divisive society >> i would draw that into question actually, too certainly the interconnection of the world promoted by the internet and smartphones and the easy access of information is something that the world has
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never soon before and facebook as a cause of that is relatively farfetched or the sole cause by the idea that facebook has an obligation to figure out how it doesn't contribute to that is a very real thing to embrace i would like to see that going forward from the company >> i don't think anyone's saying that they're the cause of it - >> there are a number of people saying they're the cause of it and a thing that i think the people at the company sort of recoil at is that the presentation of incredible connective technology that can be powerful and positive for the world is the negatives of it are -- turned into the sole discussion in the mainstream media is something that the company i think properly recoils at but the idea that they should be neutral in these significant circumstances about misinformation is manager that i
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think the senior leadership of the company should be actively rejecting. >> with your experience as general counsel, where do you think this is going? the biden administration has put in place a number of cops on the beat tough on technology and written papers on it do you think this goes into section 230? what do you think ends up happening? >> there are a number of discussions that grapple with this i think the disinformation and misinformation problem is the largest and the anti-trust actions are harmful not helpful and which i said repeatedly on this program since the beginning. to my surprise i think the judge you should the market definition problem was fatal to the kaes that the ftc filed and just refiled that today and i would emphasize to the people in the biden administration is that if
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you get to a solution for these problems is something that the company has to take seriously and work with the administration and with the congress on but find ways that this actually works. the proposals on section 230 reform have been weak and not very well considered for the most part. anti-trust action and reaching back to two acquisitions many years ago and talking about breakup of the company is particularly poorly thought through. the question of how you figure out how to promote better action against disinformation on technology platforms should be a common cause between the company and regulators and some intention within the company for that and the people pushing for that need to be empowered within the company and number of folks in the regulatory community who can be honest brokers and engage with this. at the company i worked with
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senator blumenthal on internet safety measures as the attorney general of connecticut and been a harsh critic of the company but i would hope folks from that community, the regulatory community, would step forward to say where the company engages in serious ways and seen great action from players and that they truly engage on what can be done that will be productive. >> see where it goes chris kelly, won't be the last time we talk about it. >> thank you. stocks broadly sinking today. not just facebook. let's bring in karen kariol-tambour do you see this as a necessary long overdue correction or more of a paradigm shift for the market here? >> i think the market is shifting to seeing what are the
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inflation ary pressure building up it's easy to say it's semiconductorings, natural gas or shipping and ports and there's a realization that you simply have supply not able to catch up with demand that we have stimulated massively and without pulling back some of that stimulation you're going to get demand growth and you can build up that supply through time and just get inflation and another case you get slowing growth because the supply can't be replaced and look stagnationary and seeing that in the markets. >> so do you think that adds up to more pressure for technology in particular? because it is not like we have seen rates necessarily spike or inflation expectations explode. >> i don't think the pressure is
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unique on technology every sector has things that come into price moves but the pressures are broad based and this is a broad macro story. the biggest most kind of shocking moves have been throughout the commodities complex most importantly in energy with the tightest squeezes and longest time to alleviate them. >> i think the focus is on rising yields. but china's been out there as a factor it was a big factor for a moment and then somewhat dismissed. were we too quick to dismiss that >> rising yields are the maybe the most important market move in terms of what investors hole and the place where inflation and rising need to tighten into the environment priced in. does it make sense to wait so long, as long as priced in before removing stimulation? part of the reason china is dismissed is most investors
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don't have that much direct exposure to china and it's second and third consequences that can be hard to see in the moment so you have sort of china's actual growth. what does it buy things from mostly asia you see the direct impacts and then china's impact on commodities and such a consumer of commodities and when it slows it needs fewer. partly slows because it is itself saying let's stop using so much electricity and get parts like aluminum without the electricity to make it because they don't want to burn so much coal so the impact is massive and then that has second and third consequences and the producers and the countries and currencies on places like australia. >> so should investors be -- bridgewater long been investing
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in china ray d 4r5 talks about that how worried are you about the ripple effects that you mentioned? >> we still feel that china has a unique opportunity for diversification relative to the wo world. there aren't very large global economies that kind of run a monetary policy, go to the beat of they own drum if you will and the fact of a situation like evergrande is showing this is a different financial system and want to diversify across the systems. most investors underallocate and i would say that most investors with global portfolios underestimating how important china's affect is on the pieces that they hold that are aren't china and for example the big iron ore producers, australia, that the large decline in iron ore prices matters a lot to them.
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>> karen, thank you so much for joining us. >> thank you good to be here. >> ray dalio will be a speaker october 13 you can register now cnbc consumer discretionary stocks hell bette-- held up better tod. we'll be bk aoue acin cpl minutes.
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lue lue lemon moving higher after hours announcing that the board approve add $500 million increase to the share buy back program bringing the total to over $640 million. finished the day down about 2% up after hours overall a great stock over the last few years off the highs and just in the last few months only up 6 prepo.5%. household income surging mike will have a look at whether that will translate into strong csueronmer spending in the months ahead we're back in a couple.
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welcome back time for a cnbc news update with shepard smith. >> the supreme court in session for a brand new term abortion, gun rights and religious freedom among the important issues facing the
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justices it will consider a mississippi law that would ban most abortions after 15 weeks plus a gun rights case on whether the right to bear arms includes a con celled carry permit. officials in southern california racing to contain the damage of a pipeline that leaked 126,000 gallons of oil into the waters in orange county. the coast guard and the company that owns the pipeline said they're looking into the possibility that a ship's anchor struck the pipeline and caused the spill. right now the spill itself is heading to dana point. u.s. soccer hiring sally yates to investigate abuse accusations against the coaches in the women's professional soccer league. the former attorney general will as they put it vigorously investigate the conduct reported the league is now appointed an
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executive committee an of all women to oversee the league. tonight continuing coverage on that massive outage at facebook and family of apps and the whistle-blower's testimony tomorrow on the news right after jim cramer 7:00 eastern cnbc back to you. >> shep, see you then. thank you. let's go back to mike now who's been looking at household income key metric for the consumer. >> a full comeback in terms of waunlgs and salaries on a real basis. inflation adjusted we had the chart indexed to right before the pandemic the peak before the pandemic both in employment and wages and salaries we are above 100 right here. more than recovered what was lost not back to the previous trend line and without that huge setback we would be higher still but there's spending power there
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without a full recovery in jobs. hopefully we get there and the fed waiting for an expansive definition of full employment before it does too much in termgs of interest rates look at the performance of consumer discretionary stock just they haven't done much. the market gotten into this mid cycle mode believing there's a deceleration also this is equal weighted consumer discretionary it's flattening out. obviously not going down so people still think next year pent-up demand with supply chain issues that might translate to better numbers but not too bad take a look at the effect on valuations on target a favorite of pandemic times omnichannel retail why whole thing. down around 17 a very steep decline
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so arguably if you think 2022 is a big comeback year or a continuation year for strong spending it is seeming like the market is giving an opportunity to get back into the leading names although target considered to be probably challenges with holiday season supply chain. >> yeah. also benefits as a staple. good times and bad on spending. >> yeah. >> thank you this wednesday mike will be hosting a special cnbc pro talks with tom lee 2:00 p.m. on wednesday. if you're a subscriber mark the calendars. if you are not, what are you waiting for? still ahead own "closing bell," comfort in shares of hostess brands that's next.
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the number on your screen and talk to a licensed humana sales agent about how you could benefit from a humana medicare advantage plan. we'll take the time to get to know you and give you all your options. and you'll get a free medicare decision guide just for calling. there's no obligation, call today. humana, a more human way to healthcare. welcome back amid the increasingly volatile market we take a deep live into sectors to help you find hidden opportunities for you portfolio. today we are serving up the food and restaurant industry. and joining us now with the word on the street on that sector david parma. david, great to see you. thank you so much for joining us want to get boo the stock picks and wendy's. you recently upgraded to buy why was that >> it's been left behind it's been an underperformer for a year some degree that mystifies us.
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it's a small to mid cap game when you're a stock in this mid zone the company is overlooked mid to single digit comp growth. well protected from inflation and as you know is a big theme today. it's doing a nice job of driving -- accelerating unite growth ahead the others are two to three turns rich to it and at a multiple. >> are all the restaurants that rely on the franchise model protected from inflation who do you look for when you see margin pressures >> each of these names as i think you know are all different in little ways mcdonald's 98% franchise in the
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u.s. more like 92% franchise overseas but the inflation overseas isn't as much and what mcdonald's has going for it but not the international emerging market kicker that a yum brands for example would have that's a good news thing for yum. in the case of wendy's they're a domestic player and they have been gaining share from players like burger king in the u.s. and driving accelerating unit growth in the u.s. due to the digital kitchens to be launching which are going to be delivery oriented so this is a u.s. story in the case of wendy's and don't have to have high expectations for this unit growth axel ration in the u.s. to make it worth the while compared to the other names at 18, is the times ebitda. >> and quickly let's touch on host easy brands which you had for buy for longer and upgrading
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the estimates for. >> hostess is a small sweet baked goods company and better managed in recent years and see the stock beginning to act better i think the story is getting out. top line growth is outstanding there's upside to lot of upsideo consensus numbers too in products like baby buns. the fact is this thing trades around 12 times heebitda if it were a healthy snack company it would be trading at 20 times even peers like hershey and mondelez are trading in the high teens. you can dream some really big dream to the upside here pushing this through to $20. so we like hostess >> david palmer, good to check in with you, thank you when we come back, tickets sales for one new release hitting a pandemic era record.
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and more highly anticipated title are on the way we'll have the details on the bounceback in the box office, next and it is hispanic heritage month. we're spotlighting cnbc contributors, business leaders, and our own anchors and reporters. here's's news editor. >> take all the opportunities that come to you if it's not something you end up doing the rest of your life, it's something you'll learn from, take skills from, whatever your dream job is. it could also turn out that this opportunity is something that you really like and end up making a full career out of it so just take advantage of all those opportunities as they come along, and you'll be on the right track career-wise.
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♪ i'm a reporter for the new york times. if you just hold it like this. yeah. ♪ i love finding out things that other people don't want me to know. mm-hmm. [beep] i just wanted to say... ♪ find yourself in these situations and see who you are. and that's just part of the bargain. ♪ esg is responsible investing. who's responsible for building esg into your investments? at pgim, the pursuit is on for outperformance. as active investors, to outdeliver with customized strategies, integrating esg best practices into our investment decisions. as asset managers and fiduciaries, to outserve, with our commitment to better esg outcomes. join the pursuit of outperformance at pgim. the investment management business of prudential.
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the box office havingis biggest weekend since the start of the pandemic. julia boorstin here is more. julia, just the numbers, please, no spoilers. >> well, we're talking about what happened this past weekend. it was marvel which ruled the box office once again. sony's "venom: let there be carnage" drawing $90 million for its exclusive theatrical debut,
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beating? black widow" which grossed $80 million for its simultaneous streaming and theater release. cinemark said "venom" was its highest opening weekend for the company. imax reporting its biggest box office weekend since december 2019 and best box office weekend ever cinemark up nearly 6%. imax shares up 4.5%. warner brothers' "sopranos" sequel which was released simultaneously on hbo max coming in short of expectations, grossing just $5 million domestically but mgm's james bond movie, your favorite, soaring past expectations with a $119 million international opening that comes ahead of its debut here in the u.s. this weekend it is expected to break "venom"'s record amazon is in the process of buying mgm which owns half the
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james bond rights. just don't give away what happens in "no time to die." >> but i will be contributing its attempts to break the record today. tickets booked many, many weeks ago for friday night and i can't wait julia, thank you >> i'm surprised you didn't fly back home to england to see it >> that's difficult in the current environment, otherwise i would have done. >> just joking i was kidding. you were not "closing bell" will be right back (other money manager) different how? don't you just ride the wave? (judith) no - we actively manage client portfolios based on our forward-looking views of the market. (other money manager) but you still sell investments that generate high commissions, right? (judith) no, we don't sell commission products. we're a fiduciary, obligated to act in our client's best interest. (other money manager) so when do you make more money? only when your clients make more money? (judith) yep, we do better when our clients do better.
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some news coming in on covid testing. meg tirrell with the story >> hi, sarah the fda authorizing a new at home rapid antigen test for covid. the fda is saying this is going to double rapid at home testing capacity in the u.s. over the next several weeks they say by the end of the year this company plans to produce more than 100 million tests per month, getting up to 200 million per month by february 2022 it's been hard to find those
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binax now tests. >> bring it on >> thank you very much it will be interesting to see a bounce >> getting a little bit stretched. we're trading pretty technically here, 4,300, 1%, 1.5%. people are watching the s&p. that does it for "closing bell." "fast money" starts now. live from the nasdaq market site overlook new york city's time square, this is "fast money. i'm melissa lee. guy adami, tim seymour, karen finerman, and pete najarian. tonight, facebook shares plunging 5% as a whistle-blower sounds the alarm and the company is hit with a massive service disruption we're breaking down the fallout straight ahead plus tesla holding in the green despite today's selloff. we'll bring you the big number that had investors driving into this stock and karen ringing the re


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