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tv   Worldwide Exchange  CNBC  October 15, 2021 5:00am-6:00am EDT

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it is 5:00 a.m. in new york and here's your top five at 5:00 call it an earning rallies stocks coming off the best day since march. futures they are popping. a big green light for moderna, the fda clearing the way for the second booster shot. falling back to earth, trouble, richard branson and his plan to get tourists to space as early as next year. busted at boeing, a former employee at the center of the 737 max scandal indicted for his role in deceiving government
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watchdogs. and bitcoin booming, crypto climbing to the highest level in six months is it set to clear a key regulatory hurdle? bitcoin 60k, on this friday, october 15th and this is "worldwide exchange." good morning, good afternoon, or good evening and welcome from wherever in the world you may be watching. i'm brian sullivan thank you very much for joining us happy friday it is looking like a happy friday with the everything rally looking to roll on again today the dow popping 500 points on thursday the best day since july. yet solid numbers out of bank of america, walgreens, boots alliance and united health that all helping the index. but it wasn't just earnings. it was buying across all kinds of markets the s&p 500 and the nasdaq each
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up 1.7% and unless we see a big change today, all indexes are on track to end their week higher like we said, it is the everything rally oil staying on the rise. brent crude above 85 bucks a barrel crude oil here above 81. and in cryptos, it's not there right now, but it was earlier tonight, bitcoin breaking above $60,000, its highest level since april. what a round trip that has been 60k down to below 30 and now back to just under 59,000. if you're a crypto investor you have to take some pepsid or whatever it is because that is a volatile market. it's the same thing around the world with buyers coming into asian stocks as well investors cheering news out of taiwan's semiconductor confirming reports of a joint chip factory with sony of japan.
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that sent shares up 5%, sony getting a pop up nearly 3% all major averages in the green and yep the everything rally, and we mean it europe is higher as well all the major markets there are in the green as well interest rates they tick back down germany, uk and france not up a lot, .2, .3. but whatever, they are higher. the lone hold out was norway what are you doing norway? get in on the action in the meantime, let's move back around the other side of the globe. a developing story out of china right now with evergrande group's attempt to sell its hong kong headquarters for about $1.7 billion has reportedly failed "reuters" said that a chinese state owned property company has pulled out of the proposed deal amid worries about evergrande's
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serious financial situation. they have more than $300 billion in total liabilities, 88.5 billion in total debt has been selling assets to pay creditors and that debt payment missed on september 23rd has a 30-day window to be paid as far as we know, it is not been paid yet. so as we let you know two weeks ago, circle october 23rd on your market calendar. because that is the day the evergrande group's debt payment on a huge chunk of debt will be due. they missed the first one, 30-day reprieve. we'll see what happens october 23rd that will be a day we need to pay attention to we'll circle it here in the markets. more on the markets and your money in moments but let us wake up with other key headlines you need to know about this friday morning. including a setback for sir richard branson. silvana is here with that and more
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good morning. >> reporter: good morning, brian, happy friday. johnson & johnson is putting its liabilities for tens of thousands of claims linking products to cancer into bankruptcy the company said the new subsidiary has filed for chapter 11 to, quote, resolve all claims related to cosmetic talc in a manner equitable to all parties, including any future or current claimants. shares of virgin galactic are sinking in the pre-market this after the company said it's delaying the start of its commercial space service to the fourth quarter of 2022 as it looks to reorganize the test flight schedule. the company will this month begin work refurbishing its spacecraft and carrier craft a process, a spokesperson told krn cnbc is expected to last 8 to 10 months
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and a spac that began with crypto in august said it decided not to move forward with not accepting crypto as payment. the hurdles of the cost and regulatory uncertainty were too great to overcome. brian, back to you. >> bad news for some crypto folks. if you bought bitcoin at 50 cents and it's at 60 grand now, you could pay off your mortgage with three coins, 50 bucks, whatever, that would be the trade of the century we'll see you in a few minutes let's get back to your markets and the money. outside of crypto, good old fashioned stocks looking to add to yesterday's gains, earnings, it's early, but they've been solid, particularly with the banks although much of that seems to be coming from the releases of the reserves, but don't tell anybody joining us is tiffany mcgee.
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welcome. thanks for getting up early. i don't want to rain on the headlines of the bank parade i know they move markets but when i look at the big bank numbers, i see a lot of reserve releases, not much loan growth out there. were the numbers as good as the headlines seem to make them be >> you're absolutely right, brian. so remember, like the big banks set aside 6 billion for -- in loan reserves. so you're absolutely right they did release a lot of that because the consumer is strong but there are a number of things, not just that, there are a number of things that did do well in terms of loan growth it's mixed you look at j.p. morgan, loans up 5% year over year citi loan growth was flat but b of a and wells, they declined year over year that's not what i'm excited about. i like and i've been on the show and talked about it before, i like diversified income from my
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banks. so for me i own j.p. morgan, i own goldman sachs, and a lot of times, you know, the trading revenue from those banks does really well. and so that's what we saw, too, trading was up but really also, the investment banking arms as well so when you look at m&a activity, equity financing record breaking i.p.o. activity in the past six months but m&a is huge. you see the ceo of morgan stanley coming on saying m&a is on fire right now. and the consumer is strong they're paying off their debts >> well, money is cheap or free, the bankers sitting around on zoom with nothing to do so they're going to sit around and make deals the core business of these banks didn't appear to be that great it was a lot of the reserve requirements but if you're talking about another type of banking,
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investment banking, which sounds like you are, you think we should look at more pure play investment banks, names we don't talk about much, the paul j. -- pjt, a former 30 year morgan stanley lead banker now with his own firm >> absolutely. those are smaller independent banks compared to morgan stanley or goldman sachs they're focused on m&a activity. focus on m&a, finance rei reins reinstructering. and they also acquired a group for about 595 million a little while ago, so that's done really well for them. pjt partners is another one. these stocks are doing well and they're under the radar because everyone is focused on the big banks. i own both of those, by the way.
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>> these are the boutique banks that raise capital around the world, they are pure play investment bankers you point out you go into the numbers, citi group's margin on its credit cards is 5% >> it is. >> maybe it's time to shift from the giant banks to the mid-size banks. >> i don't think it's a shift. so i'm not coming out of j.p. morgan and i'm not coming out of goldman sachs, i like those. but cyclicals clearly do well in our current environment and also do well, particularly financials in a rising rate environment so while the fed isn't raising rates right now, after it starts to -- after it finishes tapering, we are going to be talking about interest rate increases. and so, financial services companies do really, really well there because they're able to have expanded margins. it's not just transitioning out of, it's adding to with these
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smaller banks. >> we are watching hli and pjt. >> must be nice to have a stock ticker that's your initials. >> right. >> i'm not sure anybody would buy bs, though they might. >> i would buy that. i'd buy it. >> you're the one. >> thanks, brian. >> thank you have a great day and a great weekend, tiffany, appreciate it. ets, by the way. when we come back, will those christmas gifts be there when you need them to be on store shelves? we have real-time data into the supply chains of some of the biggest retailers. plus federal regulators set to give regulation to bitcoin on etf. and a big boost for moderna and maybe its shareholders, but do we need a booster shot from moderna? we'll talk about it with dr. carlosel d rio, a very busy
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welcome back the global supply chain stretched to the max and it is forcing some of the world's biggest retailers, names like costco, ikea and walmart to take measures into their own hands or their own ships because they are literally chartering their own ships but the questions remain if the added expense is or will pay off we have exclusive data
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you've been on with the story, you've written books on this topic, it's great to have you on >> thanks. >> what are the benefits of a walmart chartering its own ships because prices are already high. they seem like they might be overpaying. >> you think they're overpaying with a price tag of $5 million but they're not. the reason why, not too long ago the companies were paying an excess of 20 to $25,000 for a single container and it was stuck for weeks out shore where you had the priceless items with nowhere to go. so the reason why they're chartering these vessels is not only to get their supply chain, they're supplementing their low inventory and they're bridging -- bringing in the holiday items. more importantly they're avoiding the port of l.a so you have the seattle port they are actually winning, if you will, in terms of the market share. where you've got ikea moving
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some of their product to seattle instead of l.a., and long beach, their sister port. there's a chart where they are taking market share away from l.a. this is all strategy here, brian. >> in fact, i was out in san francisco recently and the port looked packed as well. we've heard about that like an airport, don't land in newark, go to trenton or whatever it might be kind of the same ideas if we look at the shipping reports, the manifests, the marine traffic, whatever data you want to look at, what can it tell us about costco, walmart and others asking for a friend with a 7-year-old child, will the christmas gifts be on the shelves this year, lori ann? >> it depends on where they shop. >> that santa couldn't make. >> exactly when it comes to the bills of lading, for costco they are looking at record imports. it's a two thing from a consumer
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standpoint it's fantastic, probably have a lot of items, for an investor this is great because you know they are going to have shelves filled this year the charters are enhancing their supply chain disruption and it also shows you the tremendous consumer demand they've been having look at that number, 2021 far exceeds the front loading they did in 2018 ahead of the trade war. >> yeah. i mean, the numbers are truly incredible so let's say you're walmart or costco, whatever, and you have your own ship but you have a lot more goods than you have room on the ship, as big as they are what are some of the key items that they're saying, you know what, leave that on the docks, put this stuff on the boat what are the key items i think you got the blank part. >> i did when it looks like costco, it's that christmas tree. we found really great stuff here on their website they have a
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7.5 foot christmas tree out of stock. but we learned from the bills of lading on october 7th containers of that christmas tree arrived in the port of oakland that's fantastic because nobody wants a holiday item coming in late and then they have to sell it at discount for ikea, this is a great guard looking indicator of the consumer and what they're buying, counter tops and cabinets this shows you where they're banking on where the consumer is going to spend their money >> truly an incredible story with i think a record number of ships still off the coast of los angeles, some apparently dragging anchors in all the wrong places lori ann, thank you. appreciate it. have a great day. >> you too. on deck, do you remember that piece of art that was self shredded at the auction. people in nice suits gasped in
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horror as it shredded. it is back on the block. yeah, the shredded painting and you will not believe how much someone bid this time. is this a giant global market top? i don't know we'll tell you the numbers coming up.
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[swords clashing] - had enough? - no... arthritis. here. new aspercreme arthritis. full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme. welcome back to "worldwide exchange." i'm frances rivera with your news headlines on this friday. former president bill clinton is
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in a california hospital this morning, mr. clinton had an infection that developed into sepsis the 42nd president was taken to university of california irvine medical center and remains there for observation. the spokesman said he's on the mend in good spirits and is thankful for the doctors, nurses and staff providing him with excellent care. after a trial delayed more than a year due to covid we know the fate of robert durst he was sentenced in los angeles late yesterday to a mandatory term of life in prison without parole for the killing of susan berman in late 2000. caught on body cam, an intense rescue from a fiery crash, two police officers in garland, texas ran toward a flaming car rescuing an unconscious driver who was ejected from the vehicle before making a heroing realization. >> we got one more in here
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let me see your hands. come on, man, give me your hands! get out! come on! come on! come on! i got you. >> wow, those officers being hailed as heroes anything they could to free the man, the driver and passenger are recovering from non-life threatening injuries two 100 win teams battling it out, the giants tied up in the sixth, darin rough smacking it 452 feet to even it at 1-1. a stalemate until cody bellinger came in clutch, hitting it to the outfield flores was called out swinging in the ninth and the dodgers take the series with a 2-1 win those are your headlines, brian, back to you. >> thatgame ended almost this friday morning i tried to stay up and washington, couldn't do it
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congrats thank goodness for those police officers, extremely brave. that car was really burning. frances, thank you so from that to some of this morning's top trending stories which include art, shredded art being reauctioned, a new tesla beer and a way for fans to get involved at a concert. silvana is back with those stories. what's trending on this friday >> we're going to start with the shredded banksy artwork that sold for $1.4 million three years ago, now it's sold for 18 times that price the piece was sold at auction for $25.4 million, they expected the art work to sell for $8 million elon musk announcing a new cyber truck themed beer to be served at the germany gig factory.
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it will come in a bottle inspired by the truck's angular shape. and cold play announcing an ecofriendly focus on the next world tour and it will partly be powered by a floor that generates electricity when fans jump up and down the trickers trending on right now, the ten year treasury, tesla, amc, apple and moderna. mostly all higher except for amc. >> it's always the same five things >> right, it is. but brian, you know, cold play, i'm so excited for that. i'm a big fan so i'm really excited they're doing that >> every tear drop is a waterfall, silvana every single tear drop >> good one. >> it's all yellow. >> all of it. >> green and redand blue and yellow >> all the colors. >> the cold play puns. thank you very much.
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why are so many people looking at the ten-year yield? as we head back to break, a big programming note, and we mean it on monday we'll be at the milken global conference in los angeles, go dodgers. at noon eastern on monday, something that is cool, never been done before, so it's either going to be amazing or completely implode, a special one hour cnbc pro live stream with four guests, giving them about 15 minutes each, no breaks, roll them in, roll them out, on rates in the fed i think in jase auby's first cnbc interview it is all live, it's going to be totally unscripted check it out today sign up on monday noon eastern time
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xfinity makes moving easy. go online to transfer your services in about a minute. get started today. big numbers from some big banks boosting futures in a big way as stocks come off their best day since march, will we rally into year end. the fda giving a green light to the country's second covid-19 booster vaccine, but does the data and science show we
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actually need it and bitcoin back above 60,000 briefly as we may finally be closer to a crypto etf it is friday, october 15th, and this is "worldwide exchange. welcome or welcome back, and good friday morning, everybody i'm brian sullivan thank you very much for joining us a quick friday hit on your money. stock futures are higher s&p coming off a 1.7 gain, nasdaq as well their best day since march, at least for the s&p 500. futures look like they might continue some of that momentum and unless we get a big change we will end the week higher, dow futures up 131 you know what else is higher because it's not just stocks this is not just an earnings related rally, it can't be because oil doesn't have earnings oil will keep rising as well
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consumer demand booming. covid cases, they are crashing we are seeing wti crude look at that, back above $82 a barrel here almost 85 in europe. natural gas prices in europe and coal, they've come down a little bit recently but they are still sky high, they predicted a la-nina, which means it could be a cold winter in europe, that could be bad news. state side, get ready for higher heating costs this winter, higher electricity costs this winter and definitely higher gasoline prices very soon. you can afford to pay those things if you own crypto because bitcoin is back above 60,000 it was a bit overnight. it's higher off of, but i don't know off of what bitcoin is at 59,000 and change. ether is down a touch. more on that sector in a couple of minutes right now back to key headlines that you need to know
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about, including more on boeing. and another potential black eye for the company. silvana back with those. >> i'm back. good morning mark forkner is being charged with fraud for deceiving federal regulators tasked with evaluating the flight worthiness of the company's 737 max jet hindering the ability of regulators to protect airline passengers and leaving pilots in the lurch. this is all according to the justice department according to the indictment, forkner provided the faa valuation group with materially false, inaccurate and incomplete information about a new part of the flight controls for the boeing 737 max, which led to the two 737 max crashes in 2018, and 2019, that left a total of 346 people dead. sources tell cnbc that outspoken investors janna partners has taken a stake in macy's and sent
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a letter to the board urging it to spin off the ecommerce business and the s.e.c. is reportedly set to allow the first u.s. bitcoin futures etf to begin trading unlike straightforward bitcoin etf applications ones the regulators have previously rejected the proposals are based on futures contracts and were filed under mutual fund rules that s.e.c. chairman gensler said provides invester protections. a big move for bitcoin there. >> certainly on the etf news we'll see, could make a lot of people happy and a lot of people a lot of money, at least the ones making the etf. thank you. >> you got it. this morning's top story in science and health an fda advisory panel voting unanimously in favor of a moderna booster dose for those 65 and older and other high risk
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adults those are the same groups eligible for a third dose of the pfizer biontech vaccine. the recommendation comes as an nih study finds that mixing and matching vaccine boosters is indeed effective the research will be presented to the same panel today as it's set to vote on booster shots for people who received the j&j vaccine. joining us now is dr. carlos del rio, executive associate dean at emory school of medicine great to have you back on. do we need the moderna booster is there any data that suggests that we might? >> brian, we -- i'm not sure we need the moderna booster moderna actually has shown to be much more effective and lasting than pfizer or johnson & johnson. and for that reason, you know, we are seeing some breakthroughs in moderna, so i think the fda was convinced saying there are some breakthroughs, we have excess vaccine let's give the boosters but the data to support giving
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boosters is not as strong as with the other situations. however, i think there was a big position that the fda advisory panel was put on since the white house has pretty much already said people are going to be getting boosters with the data came out with the mix and match if they didn't approve boosters for people who got moderna, everybody would be out there getting a pfizer shot or something else. >> and i appreciate your honesty and your candor here because a lot of data we're getting is coming from israel i know you're on top of it, you're the doctor, i'm a data guy. there was no moderna in israel so we don't have that data as well we know the pfizer wears off any indication that we're seeing the same kind of declination in efficacy among the moderna >> there is a little bit of data to suggest that. there's actually a study from kaiser perm anyoanente that shoh
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vaccines decrease, less so with moderna than pfizer and johnson & johnson. but clearly a decrease over time with all three vaccines. >> the idea being that there's still a huge number of people, particularly in emerging markets worl worldwide, that are not vaccinated last time i checked this was a global pandemic, meaning we could get new strains and variants in other parts of the world that ultimately make themselves here. is a better use of this excess vaccine sending it to parts of the world where a lot of people, hundreds of millions or more than a billion still don't have one shot >> i think we can do both, brian. i think we really need to ramp up production globally and really need to ramp up not only production but actually distribution and supply chains getting vaccines to the docks in countries is not enough. you have to get it into people's arms so vaccinating the world still is a big challenge we haven't taken. you're right as long as there's a pandemic anywhere we need to be concerned here in the united states. but the other challenge is
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obviously there's still 70 to 75 million americans that have yet to be vaccinated i think the combination of not having people vaccinated locally and globally still concerns me even though people are starting to act like the pandemic is over, i want to be real clear, this is far from over. >> let me ask you about this i know seasonality is a terrible word in the scientific community as well. but certainly it does seem like we're following some seasonal patterns you guys in the south got hit hard, easing off now weather's been beautiful here in the northeast there are still 1.5 million unvaccinated and eligible people in new york city alone. more than the unvaccinated population of some smaller states all in a small area, bronx, brooklyn, new york do you think that we will get kind of a last gasp fall or winter pop or surge or do you think because of prior infection, which new york got hit hard in the beginning we might actually be over this
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thing? >> you know, i think hopefully what's going to happen, we're all counting on the latter but the reality predicting this virus has been incredibly difficult. i think it's also going to depend on two things human behavior and what happens with new strains if you have a new strain to which there's not a lot of immunity and we're all naive there may be another surge this winter when people go indoors. but predicting the virus has proven to be incredibly difficult. to me it's still too early to call victory >> yeah. you don't want to call victory as well but the data certainly looks good there are fewer people in the hospital in new york city now than at any time since the pandemic began for covid-19. i'm going to knock on wood doctor and hope that continues dr. carlos del rio, appreciate your views and insight as always have a great day and great
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weekend. thank you. >> thank you very much. >> you're very welcome. let's hope the trends continue on deck, it is tax flight day as millions of high income earners who fled the northeast try to get a leg up on the irs. one of australia's largest pension funds said it may make small investments in crypto. the queensland investment corporation which manages about 70 billion said it will take the digital crypto space seriously despite regulatory uncertainty. shares of co-op popping. the company also approving its first dividend ever. alcoa stock has just crushed it. this is not good news, the head of hisense, one of china's biggest tv and appliance makers
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said the global chip shortage could last another two to three years. ouch dow futures not an ouch, up 126. we're back after this.
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welcome back for many of you high earners out there, today may be the real tax day. because many are fleeing high tax states like new york or new jersey and if you are, today is the day to try to claim a new tax residency and many of you out there may be going to greet
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lengths to do so robert frank is joining us now it's all about the 50% mark every minute, where were you every day of every year? >> that is the start many taxpayers who have not commuted to work or lived in a different state are now trying to change their tax residency. the so called 183 day rule whereby that's being away for over half a year does not exempt you from taxes state tax authorities especially in new york, california, and new jersey are cracking down on that accountants say many clients are already getting audit notices if they tried changing their tax status there are two categories of taxpayers, first nonstate tax residents who used to commute are now trying to claim exemption from earned income but if your former office is, say, new york state, you still
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have to pay new york taxes even if you didn't go there for a year and a half. some states may even add on their own income taxes so you get double taxed the other category is state residents who are trying to change their entire tax residency. say from new york to florida they have to prove, in addition to the 183 days, a new domicile. that means severing all your ties with the former state so selling your house or apartment, moving your dogs, your dentist, your kids' schools, your charities, all the office you have to move all of that to a new state. those who try to skip out, even for a year or two and then try to return will also get caught new york has up to three years just to inform you if they are doing an audit so you may not even know you're being audited until 2024 so if you try to skip out for tax year '20 and '21 and come back in '22 or '23, they will
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find you and catch you. >> three years of waiting. what if you don't have a dog, need to go to the doctor there are ways to make this harder, not that i'm encouraging them, by the way, i pay my fair share of taxes are there ways the rich are really fighting this it's not like i got a new vet, here's proof my dog got rabi's shots. >> many of the well advised and wealthy think as you mentioned z at the top, as long as you have a location app that has you out of the state for 183 days you're fine and even people that have accountants for some reason are now submitting taxes as if they lived in a different state they've been out of their office, often out of their state for a year and a half. that's just the beginning. you have to do all these things, including probably selling your house or apartment and proving that you never plan to go back to do that
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and so, there's really no easy way out. that's why new york state is already sending letters out. >> but it might be worth the risk for many people, not that i'm saying cheat the irs but if you make $5 million a year and go from 9% tax rate in new jersey and new york to zero in nashville or naples, florida you're saving a couple hundred grand a year might be worth it to put the money in an investment, hope if you are audited down the road you have the money to pay back don't spend it but let it sit there and invest that money. not that i would do that. >> there's a huge value in deferred taxes, that's what you'd be doing especially if you gain on the investment maybe that's the bet that many of the well althy are doing. >> you may have to pay the penalties, also. the irs can make you pay back what you owe plus a little
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government vig interesting story. i'll see you in palm beach. your morning rbi is next what may be the next big risk to the jobs market. a story you're not hearing enough about but you will. plus an update to wells fargo fade, follow or fear and it's hispanic heritage month we are spotlighting business leaders as well as colleagues, reporters and friends. here's our friend patty mortel. >> i'm a if first generation mexican american my parents taught me to work hard and do a good job but you need to form your own personal committee of mentors, sponsors and coaches who will help you navigate the playing field, check your blind spot and position you for the next step because nobody got ahead all by themselves
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today's rbi is about the job market and the lack of workers we've been doing a special on it all week here on cnbc and why not, it's a huge and hugely complex story that affects millions of families in the overall economy. but there is another big jobs story that is just starting to bubble up and maybe not getting the attention it deserves, at least until now, and that is the threat of strikes, labor walkouts something we have not seen much of in years but now that is changing because workers are not only burned out, they're fed up and demanding change. we're seeing labor walkouts or threats of walkouts at different industries across america. john deere workers on strike for the first time in 35 years, for example. 24,000 nurses and health care workers may go on strike at kaiser permanente if they don't get the income increases they're asking for if they do, they would join thousands of other critical
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hospital workers who have already walked off the job workers at kellogg's and even the theatres union walking out and hearing more about other company's workers thinking about the same thing and big political names getting in the fray. look at these tweets from bernie sanders, coming out and tweeting kelloggs made record breaking profits, enough is enough. workers who stand to benefit from the products. and you have robert reich's tweet as well on the same lines, 10,000 john deere workers went on strike after rejecting the latest offer the workers are agitating to win back benefits they lost in the '90s this is what a powerful labor movement looks like, folks they may have a point, billionaires are getting more billionaire-y. whatever you think about it on
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either side it could matter to markets, inflation and the fed if the fed believes that wage ga gains for these workers will be transitory, maybe they need to work in a hospital or factory for a day. random but important. back in july the next guest brought out the ten risks to fade, follow or fear topping that was inflation, followed by covid and then the debt ceiling now darryl crunk welcome back you had inflation in july. we did our wall of inflation yesterday and it was even worse. i got to imagine that it's still got to be number one with a bullet >> yeah. it is. good morning, brian. it is -- it begins every question and ends every sentence in conversations with clients these days and, in fact, it's morphed into the stag-flation conversation
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that we think is overblown at this point for stag-flation you need high inflation, high unemployment rates, and most importantly you need stagnant or declining demand and demand is not a problem for this economy in fact, demand is what is part of what's agitating and aggravating the supply chain issues so we think you have sticky inflation, persistent inflation, put whatever descriptor you want on it but it's here to stay for a while. so far it hasn't tipped the capital markets over, though if you close the year down right now you have the s&p 500 up almost 20% for the third consecutive calendar year in a row. >> somebody asked me, not that anybody cares what i think, they asked what i thought was the greatest market risk and i just said -- i held a poll of the audience.
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the greatest market risk to me is that about 40% of financial advisers or money managers have never managed money in a rising rate or inflationary environment we haven't had one in 15 plus years. you got out of college, you're 37, 38, you've never managed money or invested in a rising rate or inflationary market. it's a different beast. >> it is a different beast you're right, brian. i think that's an excellent point opinion it's been made as we talked about with the fits and starts interest rates going up over the years many times the reality is, i think people get hung up on what should i do with my portfolio? if you go back and test this with high inflationary environments or stag-flation environments, it's interesting because the same assets do well, it's real assets, real estate, commodities, volatility does well, and cash does well
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what doesn't do well, naturally bonds don't do well, credit doesn't do quite as well and even equities, well past the returns they languish a little bit in that type of environment. >> you know, we just talked about alcoa, numbers were solid, stocks up 3 or 400% this year. so do we buy industrial companies that make stuff and keep the rest in cash? >> well, no. i would say we definitely put a lean on to cyclicals if you look at s&p cyclicals versus defensives, they're back to year highs now. remember in the summer months when the cyclical trade fell out of bed and it was not performing well as well as growth took over, bond proxies took over now cyclical has reasserted itself on the idea of rising rates. i think one of the biggest risks to your earlier point in question is the bond market
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still hasn't priced in sustained inflation. everybody worries about a fed taper and rising rates what happens when the bond market wakes up some morning and decides inflation is here to stay and we need to price in an inflation term premium >> what happens? if that happens. >> if that happens, you're going to have the whole curve shift higher and have it continue to steepen. which actually does well for things like financials, which we're right in the heart of seeing the big bank earning seasons. you can imagine it would light the fire it does well for asset managers. so there's sectors that work and areas of the portfolio that work on the equity side when you get a rising and steepening yield curve. >> it's a big shift, could be there. we have your ten risks to fade, follow or fear it's all about inflation appreciate it, darryl. have a good day and a great weekend. thank you. >> thanks, brian. >> you're welcome. thanks for watching
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"worldwide exchange," next week i'll be live at the milken institute conference be sure to sign up at the cnbc pro live stream one hour special, four guests, noon eastern on monday. it's going to be a biggy, never done it before, i'm looking f forward to it. have a spectacular weekend see you next week. squawk is next there's a cyberthreat. only comcast business' secure network solutions give you the power of sd-wan and advanced security integrated on our activecore platform so you can control your network from anywhere, anytime. it's network management redefined. every day in business is a big day. we'll keep you ready for what's next. comcast business powering possibilities. it's moving day. and while her friends are doing the heavy lifting, jess is busy moving her xfinity internet and tv services. it only takes about a minute.
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good morning, stock futures pointing to more gains after yesterday's earnings fuelled rally and bitcoin now trading near $60,000 for the first time since april and an fda panel unanimously backing moderna vaccine boosters next up for consideration, the j&j booster shots. and falling back to earth trouble for richard branson and his plan to get tourists to
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space early next year. it's friday, october 15th, 2021. and "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc i'm becky quick along with andrew ross sorkin joe is out today we're going to start with the markets because this is some pretty big news. you were watching yesterday you know the dow jumped 535 points up more than 1.5%, breaking a four day losing streak and putting in its best one day performance since july 20th. the s&p and nasdaq had hotter hands yesterday, each higher than more than 1.7%. for the s&p it was the best performance since back to march. if you were looking at the nasdaq, it was its best performance since may. and there's no stopping with i


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