tv Closing Bell CNBC October 14, 2021 3:00pm-5:00pm EDT
douz lawmaker offices and several agencies to discuss aspects of the proposal saying feedback from capitol hill is welcoming. >> may be the direction it will go to a separate regime. >> or a big combined one s.e.c., cftc and this. >> we'll see you tomorrow. "closing bell" starts right now. hello! and welcome to "closing bell." i'm sara eisen nice rally today for stocks. major averages positive for the week. >> thank you for letting me know that it was me next. i'm wilfred frost. have a look at what's driving the action walgreens after strong earnings this morning a good showing from the bach banks. and good economic data this morning with weekless jobless claims and september ppi lower than expected. coming up the chairman of wells fargo on the company's
earnings report and emg capital founder eric jackson joins us to discuss the names that he's most excited about. mike santoli tracking what's driving the rally and wilfred with bank earnings mike >> a better rallies in months. a one-day basis. we talked about signs that the market is gaining traction below the surface. refusal to go to new lows and today release to the upside. yes the good earnings and decent economic data? all seems to have caused one day this recovery move and fear of missing out has people chasing it does that look like october, for example? of last year somewhat a similar double bottom after downside action.
a couple of failed bounces the market is rushed right up to what you would consider the next test trading almost to the penny at the 50-day average. seems to go station to station it spent a month below the 50-day average so i think you'd have to say it's encouraging not any kind of a final verdict that in fact we have seen the low of the shake out period but the refusal to go down on bad news is sometimes a tell there take a look at inside the market where the average stock relative to some biggest stocks performed. this is a one month. this is like the equal weighted russell 1,000. very broad and democratic measure of the market. outperforming at a one-month basis. trailing things is this and then
the next generation of the qqqj which is the next 100 largest stocks in the nasdaq so this is the hierarchy we have seen for a few weeks in the cyclical earea of the market and unable to make much headway on the index level. also very good bank earnings strong capital markets and results within it. i wanted to point out how it's having a halo effect on the more narrow boutique investment banks. this is a one-year chart you see amazing gains and telling the way they have steepened their ascent recently. that's bull market activity. maybe hot here at the levels but the capital markets and the deal making flow remains pretty strong here. >> yeah. some positive messaging on the outlook from wall street the economic data, jobless
claims we should mention below 300,000 is a huge milestone and the lowest number since march 2020 fewer americans having to file for the weekly unemployment claims and a question of growth and how much it is slowing and where's wall street right now on where that stands? >> i think we call it slowing or it did slow? the third quarter absolutely had a soft patch in it you have a huge steep decline. seeing the consumer activity especially with the banks with consumer credit and spending volumes. they look good we are inching to the idea of a reacceleration possible. the industrials are not distin wishing themselves these days. you see weakness in the global cyclical trade and seems as if people think that there really was not a profound slowdown but
a stutter step. >> thank you. >> it was a busy day for the banks. they're all reporting which means it was a busy day for you. you're acting better today. >> fun day and lots to discuss. bank stocks are now acting better and behalfing they were a bit all over the place this morning and settled in a way that reflect it is earnings winners for the quarter. morgan stanley and bank of america is top of the performs wells fargo with a decline bank of america first. standout is loan and income growth up quarter over quarter starting to perform already for this past quarter. going one better really than other rivals able to guide that it will start to improve in the quarters coming. and they held expenses flat and
that allowed them to display the type of operating leverage that all banks hope to see if rates do rise in the next year or so everyone's capital markets performance is strong and more morgan stanley drove a solid beat overall and in m&a and investment banking performance strong and the trading business tilted to equities also helped them perform well this quarter citi enjoyed strong capital markets. they did see expenses rise 5% year or year in line with guidance wells fargo suffered the most s today. loan growth slacked. lots to unpack on that name which we'll do with the cfo shortly but the group doing well as we ran out the day and goldman sachs still to come tomorrow bank of america up 4%.
>> should bode gel for goldman. >> for sure. >> we have a news alert on coinbase kate >> hey, sara pushing for a new regulatory framework for cryptocurrency a list of recommendations for how it says the u.s. should oversee this industry. one they want a new, dedicated federal regulator suggesting a digitally native regulator and a new framework and doesn't fit neatly within the existing one and a new registration system and a day after a framework, the latest sign of the industry pushing hard for new policies in d.c. shares of coinbase up 5% today back to you. >> thank you so much wells fargo cfo joins us with his take on the quarter and he is expecting heading into the end of the year. you are watching "closing bell" on cnbc.
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the quarters ahead why do you think there was that difference in terms of the back ward looking quarter between some of your peers in the numbers just released? >> yeah. let me start with the overall quarter and loan growth. looking at the quarter we had a good solid quarter 5.1 billion in net income. you saw the income growth and we saw with the regards to the priorities on loan growth we see them in autos, nonconforming mortgage book, the corporate investment bank and starting to see the growth some came later in the quarter but that gives us hope to continue as we get into the quarter or the fourth quarter. you also saw ta lot of growth in
credit sector. that allowance release you saw spend across debit card, credit card stay strong and stable over the quarter and then our priorities you saw us continue to execute on the effective agenda and then set backs and had a lot of success there. and we continue to deliver back more and more capital back to shareholders through the buybacks of 3.5 billion and increased dividend and continuing to launch products like the credit card space and i'd say you saw progress from customers and the priorities. >> you mentioned control and the regulatory issues there. let's touch on that. i know there was some progress and some additional punishments in the last quarter. was it net progress or a slight
step backwards >> i think you have to look and say we're a very different company than just several years ago as some of these consent orders came into place and i think the expiration of the sales practices consent order is significant progress in the quarter. but you also had the setback as we said may happen with regards to the occ consent orders and continue to be clear about what we got to get done and really confident to be able to get it done and it is still several year journey from here it is not always happening in a straight line. there's possible to be other setbacks and seeing the progress. >> on that topic, mike, i was curious your response to senator warren who wrote to the fed chair asking to break you up basically to separatethe core banking services and said in the state it's a risk to the financial system and consumers
how did you respond to that? >> yeah. no like i said we are a different place and whether it's people, process, operating disciplines controls, across the board than we were and every day we make sure we deliver on the things to do to put the issues behind us and where the focus and i think you're starting to see progress. we see it in what we look at it's hard for everybody to see it outside at this point but we do really see it and focused and confident to get it all done. >> talk us through your outlook for cost efficiency ratio and if we see rates rise operate leverage and saw a nice way for bank of america. will you see that come through next year? >> i remind people of what you look at the last three months rates were lower and the recent
rally i think is helpful to look forward and pretty recent and seen volatility as the 10-year is moving around and think rates will rise and will be helpful looking at earnings and falls to the bottom line as we do that. on the efficiency agenda we lid out a multiyear plan and feel confident to be able to continue to drive more efficiency over the next few years and hopefully starts to see that in the results and see more over time. >> you mentioned the healthy loan growth across loans and cars so if you just speak to what you are seeing from the consumer there are questions right now about what happens when the stimulus fades and monetary policy goes the other way and what the economy will look like
especially with the inflationary concerns. >> there's a lot of risk out there. we don't see that translate yet into a slowdown in spend week to week you might see volatility in different categories or overall spend and the trend is stable and i think when you look at liquidity balances for people that got federal aid they're still you will 40 plus percent and the liquidity is still there for clients and out beginning to spend more or are spending more for the last number of months so at this point we are optimistic that will keep happening despite the risks that are out there. >> i want to end by asking what morale was like. it felt like it when you reported the last quarter's earnings that you put the worst behind you and indeed the share price rallied aggress ily for
six weeks or so and now we feel that we have taken a step back based on some of the questions on the earnings call as sara referenced and senator warren asking for you to be broken up is that a blow to morale to revisit the issues all over again? >> no. we think the quarter is good performance from where we are. shows the progress we are making across both business side, your priorities risk and regulatory stuff and remain confident to be able to work through this and solve the problems and get this behind us and takes time and that -- that is the case but we still feel really good about it and think there's opportunity for us to continue to do more in all of our key businesses and focused on delivering that. >> good to see you thank you. >> thank you for having me. we are getting some breaking news on moderna. fda advisory panel weighed in on
the booster. meg? >> it was a unanimous vote in favor of the moderna booster dose for the same groups authorized the booster of pfizer's vaccine for so over 65 and those between 18 and 64 at higher risk because of health reasons or the setting like the job or institution. you can see moderna spiking there on this vote it was unanimous and now this is going to go to the fda to make its decision and then next week for the cdc to make a decision on recommendation. the meeting today is not quite over yet the advisers will discuss this afternoon whether or not boosters should be made available to people who got pfizer and moderna to everybody over age 18. so basically essentially laying the framework for all and when
that might be appropriate and moderna with the nod as pfizer guys >> this is unrelated to the data ochtd morning that related to the j&j booster vaccine? >> right tomorrow the advisers are meeting about johnson & johnson's booster so we get to do this all over again and find out what they recommend for them and that's a one-shot vaccine and the data look different and bringing you that news tomorrow. >> thank you. we have 40 minutes left until the close and we are comfortably higher 500-plus points on the dow 1.5% the nasdaq and s&p looking a little bit better than that still. walgreens rallying up next hearing from the ceo roz brewer look at the top searched tickers. the 10-year yield as always on
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welcome back biggest winner in the dow is wall greenls beating on earnings this morn jg let's get to bertha coombs who spoke to the ceo about the quarter and more news out of the company today on the new strategy the stock had quite a turnaround. >> six months on the job and walgreens delivered on the quarter and during the investor day roz brewer delivered on the vision for stores, a strong pivot to localized primary care taking a $5.2 billion deal to double the deal in villagemd, speaking up the rollout of 600 clinics by 2025 with half of those in underserved urban and rural areas. >> when you think about health care it has to be local.
it must be local we can move in local communities to have a physician connected to our walgreens store and it creates a wonderful relationship between that pharmacist and that physician. and then when you think about putting in the background a tech enabled platform so that all records are pulled together and the conversations are uniform and the physician recommendations are shared directly with the pharmacist i think that's a game changer. >> shares dipped early in the day as people heard about the deal rich valuation seeing a nice reversal in the investor meeting >> bertha, i'm curious how it sets up walgreens against -- i guess the closest competitor is cvs. now that walgreens is getting
more closely into health services looks like cvs outperformed but both have done. >> they have this is walgreens strategy and not as clearly defined a reason they brought in roz brewer to tell the narrative and focus where they're going and irnly we saw the dip in the stock but the investor meeting they seem to get it and she delivered that message to say we will be very focused and disciplined and not try anything we really think that being this localized primary care provider to work for us as scale. >> thank you so much up 7.5% for walgreens. jpmorgan senior airline analyst jamie baker to weigh in. national retail federation
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movers u.p.s. to buy with a healthy backdrop cowen with caterpillar at outperform today with a revenue opportunity from autonomous solutions over ten years and projecting the first mega cycle for cat's financial performance in 14 years. jim cramer writing about both of them today in fact warning investors to be aware of hype around cat to learn more sign up, head to cnbc.com/investingclub or point your phone at the qr code. >> busiest man in the world. >> incredible. on the names in the news he said be patient with wells fargo. >> i know. >> huge beneficiary of higher rates. >> we chatted about that this
morning. >> made it to the newsletter. >> i think he was already saying that >> didn't quote you. >> he is getting into rugby. did you know that? >> no. >> yeah. >> playing or watching >> i don't think playing we must continue it is time now for a cnbc news update with rahel solomon. hey. >> indeed. verizon is telling the 30,000 nonunion work ores to get the covid shots by december 8. discussions with the unions are under way. the companies said it's following the president's order requiring vaccinations. michigan speeding up the time line to get a water crisis under control. benton harbor not far from chicago to replace all lead water pipes. all italia was the airline of pope and now no more. flew the last flight today after 75 year just the airline's been
losing money for years and the government spend $9 billion in 3 years keeping it afloat. and the banksy record, bidding on love is in the bin didn't stop until $25 million. this is more than triple the estimate and 18 times what the participating sold for in 2018 before it partially shredded. >> i don't get it. >> just i saw people watching that live. it's become like a viewing event these -- the auctions and stream them live and all going way, way above what they're guided. by many multiples. not just percentages. >> has to say something about the market rahel, thank you airlines are down 12%. up next a top airline analyst on why he says the group couldsoo
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news alert on carl icahn leslie >> the situation with carl and southwest gas escalated quickly. today he is revealing in a letter that he intends to launch a proxy contest to replace the entire board of southwest gas and commence a tender offer to acquire all outstanding shares at $75 each. shares now up about 6.5% to 7% still around $69 a share and
said that that tender offer would not be contingent on financing or due diligence and there are conditions he has. the reason icahn became involved in a public way after reports that southwest gas was intending to acquire -- was in advance discussions for quest star pipelines from dominion energy and that deal announced. ing that that he said in this letter that he traded to prevent happening. he said that he initially pushed the board to do a rights offering to make equity holders whole from this deal saying that they rejected it and announced a poison pill on this past monday and basically in response to that so the conditions for this tender offer would be to eliminate that
poison pill and waive a certain certificate of incorporation so very interesting developments on this front you can see shares of southwest gas up 6.7% and one to watch guys >> thank you so much up 6%. a market flash on gogo >> musk is quite the twitter influencer gogo down today. the job comes after the founder tweeted about bringing his starlink service to commercial planes please let them know if you want them on the airline. shares of gogo climbed yesterday after signing jet edge as a customer it was downgraded last week.
the space is getting crowd i. >> the power of the tweet. thank you. new this is morning from united the announcing an aexpansion of the transatlantic routes joining us on that is jamie baker. united's move here how much visibility do they have what kind of bet is this >> feels like a better bet, better execution now that the borders are relaxing united was bullish on this expax for sometime the ceo said he thinks next summer could be one of the busiest ever for united. today is a formality identifying the routes part of that. it is not new news for investors. >> is it a growing and profitable market that puts
united with an edge against the competitors? >> we think it may be the one of the post covid bright spots. we think there's a path co-covid for airlines to potentially have higher margins than they had pre-covid so i'm not surprised that united is trying to get into that market perhaps a bit more aggressively than the competitors. >> not to dwell on that particular route but some have cut the number of flights maybe temporarily and some cuts have become a quick side question do you back jet blue's move? >> interesting question. yeah for several years we felt that jetblue domestic network could support connectivity in new york and before into sort of closer in europe.
the a-321 xlr is compatible with the existing fleet and as expansions go we are bull initial at jetblue and predates covid. >> up dated southwest and then the disaster of last week and had to cancel more than 2500 flights since saturday does that change your view on how they manage through the issues >> it does not the airlines were starving well over a year and now they are running not walking to the feeding trough and they need to slow down and take human bites and schedule the operates in a way to set aside a sufficient number of spare aircraft and crews in the event of any operational pressure applied and that's the challenge of southwest over the weekend and
spirit faces over the summer americans with the challenges over the summer. delta in the spring. this is an industry issue that has to be confronted i understand it. the airlines are eager to get a taste of that revenue and passenger demand and need to preserve the operational integrity. >> industry issue and southwest took all the bad press from it is that lasting damage that hurts the customer loyalty or not? >> i don't think so only because we have been seeing so much of this operational mayhem that followingamerican's purchase o reno air in 1999 cause a lasting damage no did the operational challenges that american again coincidentally different company faced with the mechanics in 2019 have any lasting damage? do we believe that spirit's melt
down over the summer has lasting damage we don't think so. if managements retool the operation in a way that makes it more consumer friendly and less efficient then there could be cost implications because of that but i would be surprised if a family decides to stay home on the off chance that that could be disrupted mid flight because of some operational challenge or wrench thrown in the works. >> target is 70 bucks and is nice upside from here. >> thank you. up next, investors are loving it with beyond meat shares today we'll explain as we ke ytaou inside the "market zone.
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♪ with 12 minutes left in the trading day we are in the "closing bell" market zone commercial free coverage of the action going into the close. mike santoli here to break down the crucial moments. today we have hightour chief investment strategist stephanie leng back today. off session highs. up 485 session high north of 500. nasdaq is on track for its best day since may. and it's pretty broad. sectors are higher bank earnings fueling it or a sense that things went too far >> combination the reason i think it's broad is
that you have yields calming down anybody using that as a cue to sell the tech stocks is no longer on the table for the day. the good economic numbers. this comes after a couple of weeks with the economic surprise index is looking better. it does seem like it was enough to release the market from this pattern of just kind of grinding lower. every rally sold quickly we talked about how sell the close didn't work and very short term - >> every day >> just when i said we noticed it and then that's what happened middle of the day too many people watching this what about sara with the dow hat in july? >> can't quite get back there. my fault not yours. always. >> i feel like this is false, stephanie.
this isn't the first time i have heard your views but my main question is whether you seize the opportunity of morgan stanley being lower despite you liking the results to top up at all. >> morgan stanley, i mean, the only problem is we expect really good results because they've been steady eddie and this quarter no different and shocked it was down this morning they just delivered across the board. wasn't just investment banking and equity trading and m&a which was a common theme for all the banks that have reported so far and not just that. it was their wealth management business fees were almost 10 percent age points where i expected and good wealth manage. results.
efficiency ratio down and loan growth of 6% i like this story. i hope it goes down but i would be buying wells fargo today. and that should not be down. it's just too early. baby steps buy the weakness there. >> she never texts me. jealous. >> it was a big day of bank earnings. >> i email you. >> you do. >> not yesterday when there's one bank because of it was four. >> united health care adding to the dow after strong earnings. bertha coombs is back with the details. >> beating on both the top and bottom line with profits of 452 a share on 72.3 billion. hospitalizations offset with surgeries. expecting the trend to continue and forecast low every covid
head winds next year strong performance helping send shares an all-time high today but ceo missing today's earnings call recovering from an emergency kidney stone procedure. guys they say he will be fine. >> we certainly hope so. >> we wish him well. >> for sure. nice move in the name. >> absolutely. it is in a group that's been unu unusually weak had a pullback and unh held up and it is coming out of the hole of early october and a lot of times they move on policy stuff but kind of a representative group of expectations lowered into earnings or price implied expectations lowered and rebuild
the possibility of upside surprise. >> i'm curious your thoughts on health care. like walgreens having a big day today. sector lagged. flat for the month working today. where are you? >> i'm market weight on it overweight united health i love both and i think that the group overall the did very well throughout this summer in the defensive months right? now coming out of the being defensive mode now going cyclical and economically sensitive. seasonably strong last quarter of the year until the end of the year have a little bit more beta if you will and i think that's why they're lagging in the last month and great stories within health care. again, united health care
flawless they beat and raise. sometimes the stock goes down and buy that dip and goes up like today and they have delivered so consistently. >> let's move back to the banks as we have been discussing ba banks reporting today and let's hear from the morgan stanley ceo who was on "squawk on the street" today. >> look at the other pure wealth plays in the market plags traiting at 20, 30 times earnings i think our vinvestors understad that. >> you said some capital markets earlier up 100%. more than from covid lows. where's the valuation multiple it's still obviously grown into itself but t's still cheaper than other plays. >> absolutely.
blackrock trades like 23 times forward earnings 13 times for morgan stanley. you could say that's a big gap but now morgan stanley with the volatility of the business is going to get fully up to a pure wealth management multiple and that's the holy grail. not as dominant in terms of the size or the piece of the pie as morgan stanley and not getting there so i think it gives stability to the stock and to the story. although that is an area of the quarter not as stellar relative to expectations. >> so the 10-year yield at 1.51. everyone assumes that rates will rise do rates have to rise for the banks to work? >> well they do for certain ones i think that bank of america is levered to the yield curve and
why it did so well and saw the operating leverage because the rates up from 112 at the lows. and they were at 151 so you get the operating leverage there and happened to deliver and ux cute across the both two fantastic reports between morgan stanley and bank of america. bank of america is more rate sensitive and why they bought. they didn't want to have so much exposure to the yield curve. got to pick the spots and be overweight bank of america maybe goldman sachs. that kind of thing. >> just a final point on the banks. impressive the turnaround in the stocks given that yields have fallen today and throughout the session. it does show a lot more buyers to come in on the dips of this morning than the reverse for that sector. broadly, though, all sectors
bouncing from intraday loans and opens and almost everything up a percent at least. >> this is the day where it seemed as if we were spring loaded to get out of the way and operating in a fairly mechanical way. we turned to positive from negative at this moment in october pretty much. trading on the s&p 500 right smack against the 50-day average and tries to preserve two-way doubt out there. it's constructive. not in that hole of a week ago monday in terms of not being able to have the indexes get out of the way and a day where yes you pretty much have the buyers reasserting and why you have the turnaround on the stories. domino's. >> making a turn around and heading higher. >> reflex trade. and then it was enough of an
indexy day and almost every index up the same percentage. >> saw the session highs what do you see in the market internals? >> i think 100 points of the dow is unh similar percentage with win stock amounting for that much. internals are strong but perhaps not as overwhelmingly strong as you think given the index move the to 1 upside to downside volume that's solid and not an everything 90% up day and people will scrutinize that at the close. look at the steltd reopening trade here for a month or so last little while. that's the hotel, leisure travel type etf in big outperformance against online commerce in the last month or so not just a today story and signs of covid cases coming down with
a bid in that area of travel search volumes the volatility index did buckle here back to more normal levels. just under 20. you do get down below 17 and fits together. i would say you still have a pretty heavy premium looking at the next month's vix futures and a sense out there we have to own some protection but tends to be a good tail wind for the market with that type of dynamic. >> one minute until the close. take a look at where we stand on the dow. up 529 about 100 points or so of that is united health care. every dow stock is higher except for two. dow and merck lower. every sector higher in the s&p 500 as we speak. materials and technology in the lead both of those sectors up at least 2% everyone higher.
tech is having a good day. microsoft, apple, the top of the list apple joining the party after production concerns weighed on the stock yesterday. small caps jumping 1.4% there goes the bell. up on the dow. closing just about at session highs. ♪ welcome to cloeblt i'm wilfred frost along with sara eisen mike santoli we finished up a healthy 1.7% on both the s&p and the nasdaq. dow at 1.5% or 533 points. all sectors were higher. all higher by a percent or more. consumer discretionary up .9%. eric jackson on why he thinks the worst is behind the market
stephanie link is still with us. tiffany mcgee joins the conversation mike, to you first discussing this great intraday performance. where does it set us for key levels >> i would say it's pretty close to where people were looking to see if -- let's say above 4450 gets you started that's an area that the market fell from pretty hard back late september before we made the ultimate low i don't think it's necessarily make or break right here but it is important to note we have regained about 60% of all the s&p points lost from the top on september 2 back to the intraday low so you got more than half back that's often a place that you have to fight it out more from there. the earnings season is i think a pretty welcomed distraction to get back to company specific
stuff and because the market is weak going into it unlike the past three quarters, you have had a little bit of discounts built into the areas maybe not a strong sell the news response so i would say that the overall action is encouraging but understand that sometimes this is when you might have people come in and say sell the rally like last thursday with a similar rally. >> today was best since march 5 for the s&p 500. best day since may for the nasdaq tiffany, what about supply chain and inflation and margin pressures? what do you do all of that >> i think that those things are still here still very real. particularly coming to the supply chain which is really affecting the pressure in margins and also too labor costs. increased labor costs. all things are around not only i don't think through just the end
of the year but at least possibly through the next 18 months and are very real but we can look at banks and look at the fact that jp, citi, b of a reporting and had a combined profit of $28.7 billion and look at banks and kind of indicate how things are doing how's the overall economy and the consumer the theme is that consumers are really kind of paying off the debts and saw this low credit card interest with some companies but then other companies like jp more began saw them benefits. these banks like the consumer banks and then investment banks, i own jpmorgan and goldman sachs and interested to hear what they report this week but that's more of a diversified revenue stream
and where we have at our firm. >> in terms of the yield outlook, bank performance slipping this week, kind of surprising given the strong ppi print, do you think yields will peak for the rest of the year? >> i think yields go higher. look i think the economic data especially today on initial claims and surprised that yields are down if yields are down because the ppi was cooler than expected that's silly with 8.6% year over year growth in ppi right? we know that we had a five-plus number with the cpi yesterday and yesterday the number in the cpi is rental increases of .5% month over month that's very, very sticky inflation with what tiffany said on labor and shortages and yield
should be higher but the big debate is economic growth versus inflation and how out of control does inflation get and do you see demand destruction as a result i don't think we're there yet. i want to hear what companies have to say about inflation and what they do about inflation we have had good results from pepsi, levi's. costco with good comps i think the setup going into the end of the year is higher. good earnings are going to beat not as strong as last quarter but beat numbers higher stocks follow higher earnings and why i'm bullish into the end of the year with yields. >> chips givering a bullish signal at taiwan semiconductor reported josh no josh. i'll go to you, mike turns out taiwan semi might be a
be be better barometer. >> it's supply chain 2eterms no the same category of chips but a save for the semiconductors today. a lot of attention on the fact that the chart generally for the sector rolling over. looked vulnerable back to levels not seen since january or february so i think you got a little breathing room here. it's massive divergence with the dim doimpt parts of the sector nvidia up. qualcomm down. depends on where within semis you look. >> other fascinating thing is they suggested the next day to earn a 50% margin which is huge for them just a decade okay talking about
teens percent taj margin and it is an input opposed to something that's specialized and just become extraordinary like center of demand and good for them. not great for various supplies that have to buy the product and whether or not that comes down m meaning fly any time soon. >> i think that the companies that need them as inputs they want the supply. absorb the cost. it is not a tremendous percentage of overall selling price for those companies. but it does counter at least in this respect the growing thesis that said everyone's been double orders why next year there will be a huge pay back and turn into a glut and where the debate stands but taiwan semi is a bullish input into that argument. >> what about apple on that note, steph?
it rebounded today 2% after hit in a report on cutting production why what do you do with that? >> well, 25% customer to tsmc. so that's why i think the stock was up today and broadcom. i own all three although i'm underweight apple and because i think a lot of the news is known in terms of the iphone 13. i don't see it as a super cycle. i think we know about services don't know about the auto and exposure there that's years away. i feel like everybody owns this stock so i'm underweight and 100 basis points and still 5% total in my portfolio because it is such a big weighting i'm there and not as enthused. much more enthusiastic about
broadcom. >> tiffany, round it off for us with the broad markets do you feel like the bottom is for the rest of the year or don't have the confidence on that yet >> yeah. that i definitely can't call but seeing increased volatility going forward and much of the reasons we saw earlier definitely supply chain issues and labor costs. work changed i don't think it's a matter of getting back to work people have exited the labor force and account for that and not baked in yet definitely growth in china just talking about semis 9 2% of chips are made in china and slowdowns in production so i think that's going to weigh into this but all of these are headlines that the market is reacting to so definitely bullish through the end of the year
really into next year and expect moderate gains and expect bouts of volatility and get the strategy together and what will you do when we have the dips in the market >> we'll leave it there. tiffany, stephanie, our thanks to both of you roku up more than 500% since beginning of 2019. the next guest said the stock reminds him of roku back then before the huge rally. eric jackson reveals that name next plus the president on the national retail federation whether the administration is doing enough to fix thes ttnes.e we're back in two minutes on "closing bell. i'm searching for info on options trading, and look, it feels like i'm just wasting time.
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good to have you back with us. thank you. the nasdaq's performance and tech's performance but you are focused on the russell as to whether we'll see a big rally for the rest of the year or not. >> i think it's most -- the russell's really america it is a broader sixtection of companies. reflects from small to large stocks are doing and been pretty flat basically since february of this year. so i do believe that it's the russell is going to lead the market higher and given coming off weeks of volatility the russell is best performs since i was last on and the strength will continue and i'm optimistic >> so before we get your two new picks, let's touch on one you
mentioned as you said you came on just after labor day. up 23% which is upstart. still positive on that or taking profits? >> still positive. it's my favorite holding of all the stocks that i own an i think it's still tremendously undervalued. this is a stock that's an a.d. lending. went to an all-new high today. 380 or something like that i would argue this should be a $1,000 stock today and the reason is you find me a better fintech stock, public stock, that is growing 300% a year like upstart is i don't know of any. a firm is a current market darling trading at 33x next year's revenues coming down to what you think upstart's revenues will be next year wall street consensus is going from 300% growth to 0% growth
next year which i don't think is realistic. with 150% next year growth as i think is the case it should be a $1,000 stock today but we'll see. >> only 379. is that the -- what's the next roku >> the next roku is a company called 23 and me which is a genetics testing company. around 15 years. and most people don't that it's a public company now they did a spac earlier this year and if they think of 23 and me at all they probably think that it's a nice little direct to consumer company with genetic information about your background and potential health risks. but with roku in 2018 people thought of the hardware company.
they didn't know it is an ads company. with 23 and me it is a pre-stage therapeutics company and a subscription service and they have just soft launch third degree year a subscription service for the 11 million customers to keep them updated on health risks and connections between my genetic background and the latest research and in 2018 they signed a partnership with bglaxosmithkline to take th users of over 15 years and 1 million data points that they have from that user base and nobody else has and basically are a smarter way of determining potentially interesting new drugs and cures and diseases that are out there with that data so they're a fast track for a glaxosmithkline to come up with and be more assured that
they will get interesting drugs that are going to be successful in the long run so it's a potentially i see it as a $300 market cap company today and could be in 10 years as much or more than glaxosmithkline. that's one i really like. >> give us the other new pick today. >> open door technologies. i talked about zillow this year when i was on with you and been the worst call in terms of stock performance and still own it but the big reason is it's down is i buying process comes under question and open door was the one that pioneered the whole buying process to type in the house and open door makes you an offer for the house if you want cash right away for it they'll do that.
zillow was so dismayed by the success that they felt they had to get into the business and the future and i do agree with that. but then when the growth stocks went out of favor the open door stock went down from $39 to $13. it is trading at one times next year's revenues. i think it will go back to the historical high and then a couple years from now could be 18 billion in revenue and $150 a share stock. >> overall i think of you and i think of sort of those high growth names, high valuations and you look for long term stories here but has that environment passed now that we are in the mode of fed tapering and higher rates is it harder to play that game that valuations are really being questioned >> it turns out the latest
research shows that very small percentage of all stocks like 1.3% account for the vast majority of the stock market's gains over a 10, 15, 20-year period and so in my own research i found that although wall street likes to throw up the hands at the high growth names it turns out wall street's pretty smart when they assign high price to sales ratios to the stocks think zoom for example or roku for that matter. they have a good way to sniff out. what's not just a flash in the pan meme stock but a durable long term grower i'm interested in high growth and covers all kinds of stocks out there and turns out that the names, think salesforce from 15, 20 years ago
people thought it was crazy and as a business concept is nuts and the value investors thought it was terrible and now $200 billion company on the way to a trillion so i want to find those kinds of company that is exist today and will be the $300 billion companies in the future. >> thank you for joining us. >> thank you guys. up next the national retail federation ceo on how much longer supply chain problems will last and what else the white house needs to do to help fix them p twn look at the big valuatio gabeeen the s&p 500 and the average stock. we'll be right back. but we lose control. ♪ ♪ ♪ should i stay or should i go? ♪ and we need insights across our data silos, but how? ♪ if i go there will be trouble ♪ ♪ ♪ wait, we can stay and go. hpe greenlake is the platform that brings the cloud
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that supply chain as out of date as it is right now is putting through more than ever we have seen an increase in the goods coming through but still not have kept up and acting as an honest broker with the private sector actors like at the white house today to identify short term steps to help ease the bottle necks and get the goods move i. >> transportation secretary put
buttigieg who joined us yesterday. let's bring in ceo matthew shay. who joins us in a "closing bell" exclusive interview. shay was among those in attendance at the white house supply chain roundtable. good to see you. >> you too. >> do the moves of the white house 24/7 operations at the port of los angeles and long beach move the needle on these issues >> the important thing is the administration is playing a role to get the stakeholders together to engage in a conversation about solutions and something that i think is sorely needed. for our part retailers are putting through millions more containers than even a year ago. we are on track this year just in the aggregate to bring 26 million containers into the united states. last year that was 22 million. last year was a record as well
and tracks with the increased sales in the retail industry up 6% last year and then 10, 11, 12% growth this year so i think the important thing is get the stakeholders together. it is a complicated ecosystem. everyone has a role to play and with friction in a segment there's fiction everywhere and having us in the room together is critically important. >> what happened in that room? what did you suggest what should they be doing that they're not already? >> secretary buttigieg and nec director and then the port envoy who's really a great resource for us facilitated the conversation between and among the term nat operate or thes, the ports, the unions, the shippers all of the transportation segments, the truckers, the airline industry and the train industry and so we had the conversation and i think
everyone made a commitment to contribute retailers are trying to move the containers out of the ports to get them on to the rail heads and trucks, chassises, into distribution and fulfillment centers and specific recommendations we made were have true incentives for true 24/7 programs at the ports so we really need everyone to make a commitment to 24/7 operation. we have too few chassises. not enough chassises to carry the con tearers. more than 200% imported chassises. waive that duty to move the goods. we need more help on getting the empty containers out of the ports clogging that space. but we have worker shortages to address up and down the supply
chain. we don't share information as effectively as we could. >> that sounds very positive but why wasn't this call facilitated back in june or earlier? maybe we would never have gotten to a peak of the problems. people were frustrated that hadn't happened? >> i think certainly for shippers, retailers, everyone involved in the supply chain day-to-day the challenges are not a supply the events of last 20 months haven't created a problem so much as existed the supply chain and not kept up with the investments to make in the ports, roads, bridges, general transportation links haven't stayed as competitive as we should be and focused on the infrastructure from a software and analytics perspective as we should as other ports and countries do so those are pieces
of it. there's frustration and a commitment on the part of everyone part of this conversation to make real progress and we know we need it. not only now but into the future to stay come pettive. >> what shortages are you expecting this holiday season? does it do anything to alleviate that >> i think from our perspective you know that retailers are working years in advance particularly for holiday season. many of the members have taken on extra capacity for warehousing. extra goods in place in good shape for inventory management we have seen the pandemic play out. we know the supply and demand shocks part of the system. we have been earn couraging consumers to get started early understand the challenges. but we expect to meet the expectations this year we'll have to be patient and we can do it and looking forward to a great season and it will work through the
issues getting into the new year. >> ma shay, thank you for joining us. >> thank you let's get into mike for a look at valuation and profit expectations ahead of the lesser important part of earnings season. >> yes of course. the non-bank piece of it to come we talked a lot about how the overall s&p 500 earnings expectations moderated and a widespread between the headline index and the equal weighted version of the s&p and basically stood at the pre-covid peak. early 2018 was the peak before we got through the gyrations it shows you that perhaps at the very top heavy valuation story the top 100 most expensive stocks traded like 40 times earnings on average and 17 for
the rest of the index and shows you value is general rated at least in this pullback and now we have seen outperformance on the average stock over the s&p maybe the stock is taking recognition. this is an estimation on adjusted implied forecast profit margin there's the kind of companies that contribute but now expecting it to get better next year and goes against the trends that we talk about wage growth. cost supply chain stuff might be something to watch for how the path of 2022 earnings forecast goes. >> in terms of the big tech players that are due to report are their valuation multiples more reasonable coming in with expected growth rates? >> below peak. they all would have peaked in the valuations over a year ago
and say that they are cheaper than the recent history and maybe not as charging. something like facebook trading at a market multiple no real premium for the better growth that they expect to have. they're not cheaper than pre-covid times but i think that they mod rated to a degree to where they're not necessarily implying a huge beats immediately this quarter. >> thank you one thing that big tech is here on "closing bell." we like that. >> they announce. >> in the afternoon. >> you like those, too not just the banks >> great if banks came in the afternoon. >> lure consumer staples, too. we have mondelez still ahead -- >> you remembered mondelez. >> moderna shares with a pop after an advisory panel recommended the covid booster shot plus coming up a top analyst on why he thinks those gains could be short lived and former
time now for a cnbc news update with shep smith hi shep. >> thank you from the news on cnbc, a key fda advisory committee voted unanimously today to recommend booster shots of the moderna vaccine. the recommendation applies to a number of groups, among them seniors, adultings with health problems or a job living conditions make it very difficult and where you could be at increased risk. a final decision from the fda is expected within a few days it then goes to the cdc commit tee which is set to vote next
week. former trump senior adviser steve bannon expected to be held in contempt of congress because he didn't testify and turn over documents related to the january 6 insurrection at the capitol. congressman thompson that chairs the house committee investigating say it is committee will vote next tuesday to hold bannon in contempt of congress if the full house agrees, it will then be referred to the u.s. attorney in d.c. and brought to a grand jury. more than 10,000 workers at john deere on the picket lines today after going on strike in five states after they rejected a contract offer the union said it's striking over money and retirement and fair work rule just the company says it will work day and night to resolve the strike. tonight, called the largest kate of embezzlement in
mississippi and the state auditor is pointing the finger at brett favre the details and the expanding investigation with live coverage from mississippi tonight on "the news" right after jim kramder 7:00 eastern cnbc. we watch you so you watch us that's how it works. right? >> absolutely. thank you. we look forward to it this evening. 7:00 p.m. eastern time right after jim cramer thank you. >> see you. closing the gap in the vc world. it's targeting a key group of women as investors and founders. details are ahead. plus too woke. that's what former treasury secretary summer said about the fed and other central bankers. details later on "closing bell."
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and was oversubscribed at 10 million. the more than 200 limited partners are professionals 90% from south asian women and invest in tech companies with somebody from an underrepresented group in the founding or expect i team. i talked to the investors and the founder and managing director said the mission is creating women for south asian women to empower each other. >> this is the paradigm i have been used to the men gather in the living room talk shop and latest startups with interesting thing just who's moving where the women equally accomplished for the most part are in the kitchen and family room tacking care of the kids, getting the food ready and so on we rarely talk about professional interests and how we can be an apply for
each other and i always wanted to be in that living room. >> now creating that living room space and says portfolio companies will have to have at least one female in a decision making role, guys. >> it's really is an interesting idea katers to an underserved community. how's the community been doing with trying to close the gap in the inequities at everyone is shirning a light on it for a few years? >> take a look at the numbers and it's sobering. there's not a lot of progress that's been made but there are a lot of efforts being made. reminds me of hamilton and backstage capital who made a lot of progress as a black women supporting founders in underrepresented groups and movements afoot not just with retail investors making their feelings known as making new steps and structures
but with private investors and here you will see south asian women investing in south asian and maybe more opportunities for the current generation than in the past. >> thank you so much. meanwhile we have a market flash on virgin galactic >> yes it's hit a snag and just announced that the unity 24 test flight is postponed. the stock price down 14% they're testing the material and that enhancement period started a moth later and pushing enk back and said in a statement that one of their laboratory lab tests flagged the materials to modify the joints. in other words testing out the material things aren't going as planned which is why they now will have
to postpone geren a unity 23 test flight for q42020 and seeing the share price drop in after hours trading. >> thank you a day after blue origin's flight competition hotting up in that direction. fda advisers meeting this afternoon and recommend moderna's booster shot what that means for the stock and others ahead and others ahead back in a couple i am a fiduciary, not just some of the time, but all of the time. charles schwab is proud to support the independent financial advisors who are passionately dedicated to helping people achieve their financial goals. visit findyourindependentadvisor.com
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shares of moderna getting a boost today up more than 3%. this comes after a fda advisory panel recommended the moderna booster for those age 65 and older and other high risk people let's bring in michael ye. great to see you had data regarding j&j today but less retailed data let's hit the moderna news first. is this expected is it a game changer for the stock? >> great to see you guys fully expected the announcement today. following pfizer a couple weeks ago and i don't know if this is a big impact to the stock but i do think there's a big debate
about boosting going forward. >> talk us through that debate what is it in your mind? >> yeah. i think the stock really reflects a huge sentiment around whether boosting is going to take off over the next six to 12 months and in 2022 or consistently have declining covid cases in which case the demand for boosting is not going to be there. if you look at the stock the stock rocketed up almost $500 particularly in the peak of the delta wave and everyone thought we would have boosting left, right, center every day. since that is coming down and from the merck pills there's a debate if there's much boosting over the next year the sentiment on the ground will go down with the shots. >> but isn't the play on moderna much bigger than that and on cancer and all sorts of other
vaccines and potential treatments and a head stashtd in the mrna field >> they do when it rains it pours and the sentiment around the stock goes in huge waves. certainly thinking about how powerful the vaccine was and when the delta variant coming around and people very excited about the moderna coming the rescue and what else could occur to support that big valuation. right now i think certainly in the short to medium term there's a big depressing mover basically the variant went away and with the merck pills and the roache and pfizer pill and data coming. so therefore people are negative about whether we need boosting so the wave going away and plus the solutions and pills people don't think we need boosting i would point to be clear that sentiment could turn around. we have flu data and pfizer. i think the market will have a
hard time digesting that and could be a spark to get the stock back up since it is down. >> talk us through the take on the j&j data this morning and whether it is not strong enough relative to the pfizer and moderna boosters. >> didn't surprise most people who not only got j and j, but i think people would be happy with that as an alternative. >> you are talking a lot about
the u.s. market. i went to the panel today and there was someone from africa and they have populations there where 2% are vaccinated. i think more than 60% of the world is unvaccinated in terms of the population number is there not money to be made there? moderna announced they are setting up a factory >> i would make a couple responses first. pfizer, they are going to do two to three times more supply over the next year or so so they are leading that charge. the second is it's important to know that a lot of that supply to a lot of these countries, low vaccinated areas are at a low cost or significant discount or almost at cost one of the big news articles out this week is around the biden administration arguing with moderna about how much has been
released, the perception they are slow rolling the distribution to these countries. now the biden administration is going to try to call them out and do something about it. it is not a big contribution to revenues so much of this market is purposed around whether u.s. and europe are a hot spot because variants are coming about. >> great to see you. let's get back to more on virgin galactic. >> they have announced that their community flight for 2023 will be pushed back to q42022. it will be pushed back to q42022 that's why you are seeing the share price drop about 12%
thank you. up next, lryar summers, woke and start fighting inflation when "closing bell" comes back see it. want it. ten-x it. in 2016, i was working at the amazon warehouse when my brother passed away. and a couple of years later, my mother passed away. after taking care of them, i knew that i really wanted to become a nurse. amazon helped me with training and tuition. today, i'm a medical assistant and i'm studying to become a registered nurse. in filipino: you'll always be in my heart.
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now to our key data to watch. this is a slightly later time than normal, at 8:30 >> earlier i spoke with the managing director. we were on a panel about the outlook for global economy inflation was at the top of the list here is what the managing director had to say about when she thought inflation would calm down >> by mid next year i have to see inflation receiving provided we wrestle with the pandemic more aggressively. >> speaking of inflation, during a virtual conference yesterday larry summers said we are in more danger than we have ever been in my career.
he went on to slam the fed and other central bank for paying too much attention to social issues and not doing enough to fight inflation. >> we have a generation of central bankers who are defining themselves by their wokeness they are defining themselves by how socially concerned they are. >> i think this is a pretty good debate i think if you ask fed center powell, he said they are not raising rates because we are not at full employment because there is deep pain because of jobs lost because of the pandemic but it's clear to talk to the fed. i am not sure if that is why they are not moving.
>> if that is the sole reason they are not moving, then i agree. it is a blunt tool you can't solve all of the world's problems and that's why you need other government's policies to correct. he said inflation is at the highest rate of getting out of control for his career he was born in 1964 so his career must have started -- >> as an economist, i would argue he is probably thinking about the last 30 years. that's probably fair but the problem over the last 30 years, if there has been one, it's that it has been low and declining inflation. you can krit zoo size the fed for having too much belief that the inflationary forces would exert themselves and they had to only focus on full employment. but what did the fedhave to do we are still down a few million
jobs >> if you hear what the imf said, that advance economy received in the middle of next year -- i don't know if you want to use the word transitory, it means it will come to an end, it's temporary in nature and if the fed moves to aggressively get in front of it, it could choke off the labor summers always puts something out there. >> if he clearly doesn't like the tone a lot of central bankers have had, he may not like that he, too -- >> we know that powell is a dangerously woke man >> whose term is up in february. >> goldman sachs tomorrow.
we will see how it goes. see if they are in the right kind of place again. all of the banks have run up a bit this week. >> we will see how much they beat, if they do in general, i think a lot of the things you would want to see if this was a temporary september/october shakeout -- >> today was the best day in seven months we are out of time thanks for watching. "fast money" starts now. >> we are overlooking new york city's times square. the big warning, the woman with a front row seat to the last financial crisis says another could be brewing sheely is sounding the alarm and will join us exclusively and macy's on the move could this spark the ultimate turn