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tv   Closing Bell  CNBC  October 20, 2021 3:00pm-5:00pm EDT

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month since june >> you have a report on chinese solar? >> by 2023 china can provide solar power at a cheaper rate than coal. >> by 2023 >> yeah. they can't put it forward, like they're not going to actually do that but it's a possibility. >> wow >> and thanks to everybody for watching "power lunch. "closing bell" starts right now. hello, and welcome to "closing bell. i'm sara eisen here at the new york stock exchange. mostly positive session again today as the dow hits a record the s&p aims for six winning days in a row. but the nasdaq is lagging as we head into this final hour of trade. >> and i'm wilfred frost let's have a look at what is driving the action today earnings remain in the spotlight as investors digest results from netflix, united airlines and verizon with more big names coming after the bell. bitcoin bouncing to a record high, its first in more than six months as crypto bulls cheer the launch and surprise m&a talks sending
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shares of pinterest soaring. >> we have a great lineup coming your way cleveland fed president loretta mester will join us to talk about the taper time line and her read on the economy amid lingering inflation and supply chain concerns is she thinking about liftoff? plus an exclusive interview with the ceo of deutsche bank and if that isn't enough we've also got a big slate of earnings hitting after the bell 58 minutes till the close. >> let's focus on the big stories that we're watching. mike santoli is tracking the market action. mike, let's start with you in the broader markets. a nice day of gains again for the s&p and the dow, at least. >> further measured progress, any upside followthrough sort of reinforces this idea that there was a pretty decent seasonal shakeout that we got that being said, sort of upward
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drift, i would say, as opposed to a real forceful move. we have seen a pretty significant rush higher though in the last 10 or 12 trading days, up more than 6% in the s&p 500. some satisfy the short-term indicators starting to look a little bit overbought. when you've gotten these pullbacks and then the rebounds, usually there's a little bit of revisiting where you came from before that. so before too long, typically you have to kind of settle back a little bit from some level and see if it was for real so you don't always get back to the old highs, but it's something to keep in mind just the regular rhythm so if you back off from here, it doesn't necessarily mean that it was not necessarily a decent low that we got 10 or 12 days ago. take a look at the inflation trade. of course, it's obviously in every direction you look right now. this etf has only been around since mid-january. got a decent amount of assets in it it is stocks that are deemed to be inflation beneficiaries there's a lot of global real asset plays and also financial
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exchanges. obviously has outperformed, it's done very well on the other hand i put software in here as well because it's almost the ultimate deflationary boom trade they don't really raise prices that much. it's obviously not subject to a lot of the physical supply and shortages that we're concerned with so it's not been an either/or market, but obviously the inflation trade has been in ascendance will the markets say the party might be coming to an end? i mentioned overbought readings, maybe you see a lot of speculation replacing some of that fear trade. this is the ratio for the cboe equity common stocks we got back to the near year-to-late date lows
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>> mike, to your point about the inflation trade, materials, financials, energy month to date has soared energy's up 12% month to date. >> absolutely. it's still obviously working, and the commodity trade is doing extremely well in fact, i was just looking today. the energy stocks really have linked right up with where crude has gone i think more just looking ahead and if we really think that there's going to be a central bank response or in fact the bull market and the inflationary drivers become a little bit mature, then you have to question whether in fact you've already pulled together some of those gains. >> and bitcoin >> thank you, mike mike santoli shares up pinterest spiking
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today, news that it is drawing interest from a surprising suitor kate rooney with the story >> that's right, sara. paypal is in talks to buy pinterest. the source telling me the discussions are in the late stages, both companies though declining to comment and shares of pinterest surging double digits after bloomberg first reported that that deal was in the works, shares were up about more than 13% now. some details in that original report about the price tag being around $45 billion meanwhile, paypal investors a little less excited about this news shares heading in the other direction. they've been down about 5%, down 4.7% now on that news. and reuters adding that paypal hopes to announce a deal by the time it reports quarterly results. that's coming up on november 8th. i'm also told by the source that the combination is coming from competitive pressure, especially from shopify, which has really
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blended fintech and ecommerce. and paypal has been moving into that ecommerce and shopping space. if you remember that deal for $4 billion they bought honey a couple years ago pinterest has been in the process of adding shopping services and expanding from that social network shares of etsy, meanwhile, also getting a boost on the back of this news. back to you guys >> kate, i was looking at the numbers on that valuation. if the number that you put out there that they're floating, it's 13 times revenue. if you look at what square paid for after pay, it was more like 34 times revenue so getting it for a pretty good price on that metric, what else are you hearing about what it means for paypal, which at one point was down as much as 6% on the news >> it's interesting if you look at paypal really just finished the spinout from ebay. so it's really just completed and moved away from this partnership where it was sort of a sole payment provider for ebay
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and people are sort of comparing this to that tieup and investors seem to be happy about the move away from ebay. this seems to be sort of a similar different with a different partner. the price tag was reported to be about $70 a share. pinterest opened today at $55 a share. the square deal, eanwhile, was all stocks so we'll see if that ends up being the case here. we don't have any details on that the takeaway from analysts is that this could be an extremely expensive deal, and we'll see, you know, where the price tag ends up and if this does end up being completed by november. >> kate rooney, thank you so much for that. pinterest up 14% after the break our exclusive interview with deutsche bank's ceo from the firm's new center here in new york how long he thinks inflationary pressures could last you're watching "closing bell" on cnbc.
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moving is a handful. no kidding! fortunately, xfinity makes moving easy. easy? -easy? switch your xfinity services to your new address online in about a minute. that was easy. i know, right? and even save with special offers just for movers. really? yep! so while you handle that, you can keep your internet and all those shows you love, and save money while you're at it with special offers just for movers at deutsche bank set to ring the closing bell today to celebrate the 20th anniversary of its u.s. listing. i sat down with ceo to talk about what the new center means for the bank's presence here the city >> it is just one other signal
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that we are a global bank, we are a global bank to our clients. and the u.s. is for us after germany the second most important market and in this regard we always said that we want to be present here, we want to have a latch but also focused operation and set up we are very happy to have moved now here to the circle and i tell you it is exciting for all our people, and it's another milestone in bringing deutsche bank fully back on track. >> well, it's great to be here and a stunning new trading floor as well. i guess it's interesting the perspective of where we are for the bank at the moment do you hope that the next decade will bring serious genuine profitability back to deutsche bank and really investment bank has bounced back already in the last year but can the other parts of the business bounce back in the years ahead, too >> yes so far we are actually performing in line with our expectations and that in all businesses, not
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only in the investment bank, where actually we outperformed but in the private bank, the corporate bank and the asset management, we are doing exactly that, what we hope to do, what we expected to asset management also outperforming. and the private and the corporate bank actually withstanding the longer trend of negative interest in europe very well we have come up with compensating measures. so very happy with the performance over there, and then we have done what we also promised with cost discipline our asset quality's in order therefore we regained the profitability earlier than we thought. >> of course negative rates have made profitability hard to come by in certain business lines we saw a very big ppi print in germany already. is that a good thing for deutsche bank? or inflation running a little too hot in short term in the europe >> let me first talk in general
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about this i think overall inflation is not something good for the society and for the people so one has to watch that i do think that actually the inflation which we see right now is obviously also driven by certain supply chain problems which we have worldwide. that will a little bit de-escalate i think over the next couple of months. but i'm a firm believer that we will see the inflation for longer it's not just temporary. and i get that insight from all the corporate clients i'm talking to and there is nobody who actually thinks this is a temporary thing. and that will also mean that we will see some reactions on the interest rate side some banks are already talking about that and of course kind of a more normalized interest rate environment is something good for banks, something good for deutsche banks but i can assureyou we never planned on a recovery of the interest rates we focus on ourselves, if this is coming on top it's also good for us >> so if we do see more profitability for you and european banks, does that make
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european banking consolidation more or less likely? >> well, first of all, i think it's important that we do our homework we always said this transformation which we have embarked on almost now two and a quarter years ago is running in the right direction. but we also said it takes us overall more than three years. so up to the end of 2022 when we set our targets and return an equity of 8%, 70% cost income ratio, we will focus on ourselves. at the same time before consolidation in particular cross-border consolidation can happen in europe we need further progress on the banking union and the capital markets union. i'm confident that this will happen, but it gives also us the time to finalize our transformation where i'm confident that we can do it over the next 12 months >> and if those things do happen, 12, 24 months away, is some form of cross-border transaction possible in deutsche bank's future? >> well, i would never rule it out. but, again, i think for the next
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12 months it's all about us and doing our homework and then i've been 30 years at deutsche bank, and we have seen a couple of acquisitions that we have done. and i think you should be very cautious about it, you should be very careful and think about this twice in my view, it's all about bringing your own business organically in order we are on a very good path there. and therefore that is my top focus. everything else is speculation and not something which is on my desk for the time being. >> you have a very big asia franchise, successful business there. has operating in places like china, have the rules of the game changed over the last, let's say, six to 12 months? do you have to be more careful are you as trustworthy of the chinese regime as you used to be >> for us it is important that we are operating as much in asia pacific as we are doing here in the u.s. you know, we follow our clients private clients but in particular corporate and the institutions and if you see the trade flow
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between germany and asia but also germany and china, obviously china and asia is a key market for us. i think the environment for us overall did not material change. we have always been from a risk appetite point of view rather conservative, and that is now playing kind of to our benefit on the other hand, we see that china's financial markets are opening up that is important. that is key also again to facilitate the trade so for deutsche bank it is important that we are operating in both markets, asia pacific and china, but obviously also in this key market here in the u.s. >> do you have lower trust of the chinese government than in the past or not? >> look, i think for us it is obviously we are observing and monitoring the situation we are obviously also observing the overall geopolitical tensions, and therefore the most important is that you have your own setup, your open risk appetite in order, and you play conservative that's what we have done and therefore i'm not nervous. >> i wanted to touch on a house
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committee and oversight reform report that was released recently it suggested that your bank gave president trump preferential treatment on a loan to his trump international hotel while he was in office. is that something that you accept or not? >> i'm not going into details here, but i think we said on record that we believe that this letter had various inaccuracies, and that's what i can say. obviously we responded like that, but i don't want to talk more about that. >> so reports of any preferential treatment anywhere near in that regard you reject >> look, we were very clear with our response i think we were very clear how we deal with these situations. again, we made a very clear statement. that's what deutsche bank said >> i understand. i know there's a lot more legal restrictions on what you can say in germany we'll go back to the statement in terms of pivoting back to the broader market, you mentioned
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that you think inflation could persist at elevated levels perhaps more than people had expected does that make you worry about exuberant levels of assets and market classes bitcoin at a record high this morning. >> i do think, i think it's a very good question i do think, and that's what we are discussing for the time being within our management teams. i think we are facing a decade ahead of us, which will show far more volatility also in the financial markets. that must not negative but the kind of the smooth sailing which we have seen over the last years may come to an end, and therefore you need to have risk management capabilities. you need to have the investment banking solutions. and that's exactly what we also need to offer to our clients because they will actually turn around to those banks who have that skillset and say how do we manage our risk resulting from, in my view, the rising volatility going forward that's what we need to address that's our task. and that's part of our client's
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approach >> one reason we're here today is because you're opening your new building the other reason is because it's 20 years since your u.s. listing. i mean, a significant milestone, of course, but also memories because it was the first public listing after 9/11 >> it will be a very emotional moment in my view it sends kinds of two signals. number one, yes, we were the first ones with the listing after september 11th because we also believe with deutsche bank not only with the resilience in the u.s. market but also the resilience at the position of this fantastic city. and, secondly, now 20 years later with the opening of this building and going today to the stock exchange, it also shows one thing. we are here to stay. >> christian sewing, the ceo of deutsche bank will be here at the stock exchange to ring the closing bell today and, sara, i think the standout
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there for me is not even a question of pushing back at the idea of how persistent inflation will be. his answer said no one believes it will be transitory. so just getting that view there from germany from europe slightly different perspective here clearly the base case is more that it will persist as opposed to us debating - >> he said he talked to his corporate clients about it >> they just had a 14% ppi print this morning >> it's justified. >> and they left the ecb on the same day >> and i think the other point as well, if you do believe we're going to see rates go higher in europe and it's not going to cause a massive recession, we've talked over the last week about can certain banks close their valuation. it trades at a fraction of a value. if you are starting to pivot into a new era where rates pick up and go into positive territory and you can start making a bit more money in the other parts of the business, then clearly there is a huge
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valuation multiple to close. >> great interview, great stuff. and a killer backdrop as well. still ahead on the show, billionaire hedge fund manager saying today that inflation is the number one issue facing main street investors and that it will not be transitory we'll ask cleveland fed president about it and novavax shares are down sharply. news on its covid-19 candite vaines, when we come back.
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(rhythmic electro rock music) (crowd cheering) - bito, bito, bito, bito! - [announcer] bito, the first u.s. bitcoin-linked etf.
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the nation's earning season, the real-time corporate score card following a volatile quarter strategies for investment, portfolio opportunities, team coverage and analysis all day watch and listen live on the cnbc app it's "halftime's" anniversary week ideas to power your portfolio. "the halftime report" 10th anniversary noon eastern watch or listen live on the cnbc app some covid headlines sending two healthcare stocks in opposite directions today. meg tirrell with the latest details on novavax and abbott labs we've got covid vaccines and testing. >> novavax heading lower today after a "politico" report last night citing anonymous sources suggesting the company is having major manufacturing issues that puts in jeopardy the
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availability of that vaccine both here and around the world, which is really disappointing from a global vaccine access standpoint because this was a vaccine that was really supposed to help with the global effort so the stock down nearly 16% the company saying that it has confidence in its manufacturing and its ability to deliver this vaccine, saying that it plans to file for emergency use authorization in the u.s. by the end of the year. but, of course, this weighing on the stock. and we've seen multiple delays from this company already. abbott labs beating expectations with its third quarter results today, and positing just a blow-away number, $1.9 billion in covid testing revenue for the quarter, forecasting up to 1.4 b 1.4 billion in the fourth quarter. a lot of this driven by the rapid testing sales. binax now is starting to get a little easier to buy and analysts saying that the
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$1.4 billion estimate for the fourth quarter could be conservative depending on how the course of the pandemic looks here in the u.s. back over to you. >> thanks so much. still to come, tesla just a few percentage points away from record levels set earlier this year today, of course, we will get their earnings report. could that drive things higher but first, let's also check in on where yields are as we head to break. the 10-year trading around about 'lbeig bk. wel rhtac
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♪ (whistle) ♪ (rhythmic electro rock music) (crowd cheering) - bito, bito, bito, bito! - [announcer] bito, the first u.s. bitcoin-linked etf. tonight, authorities find brian laundrie's belongs and partial human remains. the latest on the search plus, we work finally going public
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30 minutes left to go. let's check in on some individual market movers right
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now. brinker international sinking today after saying its margins and bottom line were both impacted by labor and commodity challenges the company's president saying the covid surge back in august has impacted the company more than anticipated the stock is down more than 9% and a check for you on netflix after reporting an earnings beat yesterday after the bell, the stock did get a downgrade from deutsche bank to hold from buy the firm saying it thinks subscriber growth for q4 is already priced in. stock is down 2% though most other analysts did reaffirm their positive view morgan stanley lifted its target to 700 jim cramer also talking about both of these stocks in his investing club newsletter. to learn more about his stock picks and sign up, you can always head to >> or just point your phone at the qr code on the screen and it'll take you right there
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>> time for a cnbc news update kristina partsinevelos has it for us >> reporter: hi. well, here's what's happening at this hour. the remains of brian laundrie may have been found in a florida park that's according to a lawyer for the laundrie family. officials say what appears to be human remains were found they were in the same area where some personal belongings of laundrie were recovered. in nevada, clark county officials have approved of a design for the vegas loop. a high-speed underground transportation system that will include 51 passengers, or passenger stations in and around las vegas. elon musk the boring company will design, build, and pay for construction the company says the loop will have 29 miles of tunnels and be capable of carrying 57,000 passengers per hour. and russian opposition leader alexey navalny has received the european union's highest human rights award
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it's a clear rebuke of his imprisonment and poisoning under the government of russian president vladimir putin sara, wolf, back to you. >> kristina, thank you kristina partsinevelos straight ahead on the show, bitcoin hitting a record today we'll talk to fundstrat's tom lee and why he's getting even more bullish on equities tesla, las vegas sands, csx, ibm all set to report. we'll break down the numbers and get instant analysis for you coming up on "closing bell." the dow is up 122, losing a little bit of beat an award-wip with powerful, easy-to-use tools, and interactive charts to give you an edge, 24/7 support when you need it the most. plus, zero-dollar commissions for online u.s. listed stocks. [ding] get e*trade and start trading today. never settle with power e*trade. it has powerful, easy-to-use tools to help you find opportunities,
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doom and gloomsayers will be wrong. bears are just so cynical, so jaded that they've forgotten what is history. people took action to stop them. watch or listen live on the cnbc
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app. another update session has sent the dow to record highs nasdaq's lagging today fundstrat's tom lee thinks there are more gain as head. the firm just raised its s&p 500 year-end target. and joining us is tom lee, managing partner at fundstrat. so why did you take ait up by a hundred points >> there's a couple reasons for it one, i think earnings are really affirming that demand is really strong for businesses. entering a really good seasonal period for markets, especially into year end. and third which we talked about last night was the equities are exiting like a one-month consolidation or 30 days that's happened twice earlier thisyear both times resulted in more than a 7% rally over the following eight weeks. and so if you overlay that to today and we get to 4,800. >> but, tom, if you look at some of the reasons for the
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consolidation, particularly during the month ofseptember, fed tightening, economic slowdown from very high levels, high, persistent inflation, none of those have really going to way, have they >> they haven't, but, as you know, sometimes the market looks at less bad as good. inflation's an example that i think some of the pressures that were really evident like used car prices or lumber, they're starting to roll over. from a covid perspective we've seen a really big retracement both in the u.s. and in israel with regard to sort of the narrative around the economy slowing, there is just ample evidence of pent-up demand, whether it's the pickup in international travel requests or credit card spending i don't think we're really at the sort of peak everything because people are still quite nervous about covid, and we haven't really seen a full return to normal >> we were talking earlier about an extraordinary start to this month we've had particularly for
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some cyclical sector energy, banks and materials. do you suddenly get worried that we're running too fast at the start of this month after the september pull-back? >> uh, i mean, stocks have been pretty challenging for the last eight weeks. and we know talking to our institutional investors, they got pretty nervous, raised a lot of cash, got very defensively positioned and we've only been rallying for about six days i don't think that that's enough to kind of get people position squared. so i think most investors are underinvested right now in a time when stocks do pretty well seasonally i think it has a chance to be kind of -- i think 7%'s kind of a low number i think we could be well above 4,800 before year end. >> so within that, are you staying in the scyclicals? if you're bullish on the economy and rates continue to go up, what do you do >> i think it's actually both technology and epicenter
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epicenter makes sense because those are the things people were selling over the last two months but that's really where the demand is recovering technology, i think, works because, number one, it's abig weight in the market and bitcoin's really affirming that we're going to a risk-on environment. but also technology is really your biggest solution to inflationary pressures technology demand is going to pick up over the next five years. that's great for stocks like fang and the semis and really the whole technology complex >> you mentioned bitcoin we know you're a long-term bull year at 66,000, and after the launch of the etf, do you pause in the short term, are you all in >> i think the etfs's a pretty big deal we wrote about it earlier this week because it's really creating access to millions of investors to actually be able to own bitcoin now through their brokerage account. we think the equilibrium price
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just from that increase in demand let's say it matches the 2002 launch of the triple qs. it could take bitcoin to like 160,000 or higher in the next few months it depends on adoption if you look at a metcalf model, you could still get significant upside over the next few years >> are you surprised that we haven't seen a clamp-down yet? or were you always expecting that >> i think there is going to be -- i think that we haven't seen the last of regulatory actions in the crypto industry so i don't think anyone who's in the industry should think that the s.e.c. and gensler aren't going to take any action they have time on their side, number one but, number two, it's their chance to see who's being a good actor and a bad actor. and i do think there's going to be quite a lot of action taken in the next few years.
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>> thank you for joining us, tom lee. >> thank you tesla headlining a big afternoon of earnings. we'll preview the key metrics. in the "rkmaet zone," just 20 minutes left. (vo) while you may not be running an architectural firm, tending hives of honeybees, and mentoring a teenager — your life is just as unique. your raymond james financial advisor gets to know you, your passions, and the way you help others. so you can live your life. that's life well planned.
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welcome, josh. we'll kick it off with the broader market >> hi, sara. >> hi, josh. the dow and the s&p 500 trading just below record close levels greenlight capital joining us earlier giving a bearish take on the fed and inflation. listen >> i think the fed is committed to a position that just has to hope that inflation goes away because they don't really have the stomach to fight it. so they have to obfuscate the data they have to kind of hope it goes away and kind of see what happens. but when you look at what's actually going on, there's both the monetary and the fiscal policies which are causing inflation. >> david laying out the inflation situation and joining a chorus of hedge fund managers, bank ceos and others who are saying, look, this is not going to be temporary. >> there's some support for
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that i don't think you would deny that the fed probably does hope that these numbers moderate a little bit going into next year that would make the job a little easier, preserve some flexibility. but the committee, whether it's chair powell, the committee increasingly seems like they're moving in exactly that direction to try and fight it. whether they will or not, the rhetoric is now saying, look, we have to be on alert, we have to be quicker about tapering. we heard that just today from others in the past couple of days >> and they're not saying transitory anymore >> that's right. this is definitely the balance that we're going to be looking at and the market has been able to be okay with it so far because it seems to be coming along with pretty good growth >> if we did have to have, let's say, a couple of rate hikes by the middle of next year, would that be a problem for equities >> historically it's not a problem for equities it might be a problem for valuation. but if you've got the economic growth and the earnings growth more importantly to go along
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with that, then it really isn't the end of the world you might just see a different part of the market do better than it has over the last ten years. and that's why you hear so much about rotation this, rotation that we've had, like, with unand two-month rotations. now imagine a ten-month rotation where the financials, the industrials remain relatively cheap and have good enough earnings growth to justify market leadership beyond just what we've seen so far in 2021 so that would be that type of environment. i know a lot of our viewers are too young to remember, but that's happened before and i think it wouldn't be the worst possible thing for us to have new companies bubble up into the top 50 market caps in the s&p 500 beyond just all the technology names that have come to dominate it it would be a different regime you would have to learn some new tricks and some new ways of thinking about the market, but look at the 1950s. they were raising rates the entire decade. it's the best decade for stocks ever other than the '90s which
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they were raising wages throughout the 1990s, too. so we can live with it, we should have higher rates by the way, they're not using transitory anymore because i think they know they're actually making inflation worse with $120 billion worth of stimulus every month which i have been screaming about for the last six months we do have these bottlenecks and these supply constraints all over the world obviously but then we have a fed that's stoking demand relentlessly 24 hours a day, seven days a week, and feeding into those supply chain issues actually being worse than they would be if they allowed things to calm down a little bit so i hope they start tapering. taper will come, and it will be a relief to business people. >> josh, i think everybody's in a hurry to be done with this asset purchase program i think taper is pretty much the most consensus thing you want and be finished with it. however, we had three rounds of qe in the private decade
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so i don't see how the bond buying is necessarily stoking the inflation. >> well, do we need more demand and lower mortgage rates right now in a housing market where prices have gone up 19% year over year? does anybody think that's necessary? >> no, i agree with you that we don't need it. but i also don't think - >> okay. let me finish the thought. so, i do, and actually we have documented evidence about the wealth effect. and if you think about the average american, if you think about the average american family, there is no other asset that produces the wealth quite fact the price of a home that they happen to own even if they still have a mortgage on it. that wealth effect where people look at the values of houses in their neighborhood and feel like multi-millionaires and feel like the future can only be brighter, that rivals what we see in the stock market it just so happens in this cycle unlike the last one we have both
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at the same time remember, in the 2000 to 2010 decade, stocks were terrible real estate was great. now we have both racing higher in competition and, in fact, there is so much excess liquidity that we're inventing new asset classes to buy when there aren't enough stocks and houses left that's the part that the fed is acutely involved with and has to stop, i think, pushing as far as it has for as long as it has >> that's fair enough. i just don't think that houses are priced where they are because of a half percent difference in mortgage rates >> both good points. paypal has set its sights on a new social media company potentially. are shares of pinterest surging? and is up 13% on the news paypal
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stand, as people question when the it would be a good move for them >> very, very hard to bet against that but you can sort of understand why shares would pull back on this news because it's not an obvious and immediate fit. >> i'm surprised that they're not buying a firm. i'm a paypal shareholder i'm not, like, furious about this, but it does seem very peculiar the most charitable thing i could say about why maybe this is a big deal is you're talking about 454 million global monthly average users. i think about a hundred million of those are in the united states you could make the argument that if they spend $40 billion on marketing or advertising, they probably couldn't find 450 new users. but if they acquire this company, they can convert most of them into people using paypal
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if it'sintegrated into the pinterest service. that's a stretch, i know i'm just trying to remain bullish. i don't love the idea of them doing this, and it doesn't make sense especially when you consider how focused squares acquisition seem to have been in recent years >> well, it's all about social ecommerce, and you have to believe that that's a growth spot and user monetization. mike, what do you think? >> that's certainly going to be the argument it's a $40 billion price tag to buy access to that i think the market is understandably saying that money's upped the story for paypal the fact that they even are thinking about doing it, and it tells you they feel like they don't have enough. it's a crowded space if we're talking about epayments and ecome ers and mobile also the market's first reaction isn't always right market absolutely hated salesforce slack on the same type of thing.
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why pay 30 billion to get that salesforce is looking at new highs. so you never know how the evaluation of the logic is going to evolve. >> it's also kind of a relatively small part of the overall payment system to be trying to get access to relative to where they already are and a very high price for that if you're buying instagram, fine, or if you're buying, as you say, a firm, then it kind of makes sense. as i said at the top, very hard to bet against -- this is something he believes he can make work, then i'm sure he will >> i wonder if they're bidding against anybody else because that might explain why it's 40 billion. there might be somebody who really wants pinterest also. so i wonder if that's where that price comes from because, on the surface, it's hard to, like, make that logical leap to why they feel they need to do this >> well, pinterest traded at, you know, 90 they're not selling for half of what they traded for before.
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>> 13 times sales which makes it look like a good deal. pinterest did so well during the pandemic compared towhere it used to be >> paypal's at like ten times. so, i don't know it depends on what you're benchmarking it against. >> we have lots of earnings coming after the bell today. we're bracing for results, particularly on the airline front. let's get to our phil lebeau >> reporter: wolf, i know we've done airlines all day today. what we're going to be focused on tonight is going to be on tesla. and when tesla reports its results, the focus will be on what the company does not only for the third quarter. look, they're expected to post a profitable third quarter the but is what do they tell us about where the company is headed not only in the fourth quarter but next year. three questions will be front and center with the analyst as well as investors out there. do we see record profit margins? remember, they beat the street by at least 10% when it came to q3 deliveries. what's the chip and supply chain
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outlook? they did better than other automakers and do they give us any clarity about the start of production in berlin and in texas, two new giga factories they tend to bring online this year take a look at tesla versus gm and volkswagen over the last three years. tesla, at least against general motors, it has been catching up relative to where they were earlier this year. the numbers come out in a little bit, and we will have them for you. $1.59 profit is what the street is looking for >> this has also been a company that reacts less to the underlying earnings than other factors. going into that moment where you read the preview notes and they're interested in talking about what the margins are going to be. >> and the sales volumes are there to actually merit that since the last earnings report in july, stocks are up 30% a lot of that run did get
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kickstarted when they did have a pretty big beat on the bottom line we know what the volumes were most likely in the quarter, they ballparked that. i agree with you, in the past tesla did best when there was just fewer specifics around it, and it was just kind of the big picture idea of saving the world. it's become a little bit different right now. the stock looks great but so do all the auto stocks. it also seems to be operating on its own power source this stock as it oftendoes, which is like the relentless buying of expensive options that drag the stock higher >> almost all the way back up to - >> 900 is the high >> josh, what are you watching into tesla >> two things. the first is they actually don't do the conference call until 5:30 so you could have 90 minutes of gyration in the after market depending onwhat that number looks like the second is elon musk on the last conference call mentioned he might not even bother showing up to these anymore.
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so i think people will be interested to hear if he's even part of the call that being said, i agree with what mike said techically this stock is set up for a huge breakout. you can see that 900 was resistance during the expensive stock mania, let's call it, meme stock mania in february and march. it's been a long road back it's right back at that level. if they don't disappoint tonight, i don't see why this wouldn't be a four-digit stop once again >> i like it better when you guys disagree. two minutes to go in the trading day. >> i love mike i'm seeing you tomorrow, mike. >> we'll find something to disagree about then, i'm sure, but i look forward to it internals actually look pretty decent the indexes have sagged a bit. the etf volumes are not necessarily looking all that interesting. but very, very strong stock performance, small caps are doing pretty well. well more than two to one advancing versus decline in volume look at the year-to-date chart we've talked so much about which
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one should you be. it almost didn't matter almost exactly in parity. you've swapped leadership off a few times. but right here they're kind of close in value just nosing ahead very, very recently. the volatility index actually now below 16 i don't think it's traded as high as 16 all day that's actually been pretty rare in the last year and a half. it has formed the bottom about 15 a couple of times this year something has come along in the next maybe couple of weeks to kind of upend the market calm once you've had that situation but that's not to say we can't break lower when we do get these fourth quarter rallies, if we do get one of those, this 15 is not necessarily going to be the low for vix. >> heading into the close, not quite at record highs, but amazing that we're only a quarter of a percentage point away from that the dow is up 0.4% you've got a lot of defensive groups in the lead today healthcare and utilities, united health is the biggest contributor to the dow goldman sachs is the biggest drag there is the s&p 500 up 0.3%
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everybody else is higher healthcare is your leader. there goes the bell. the nasdaq closes underperforming of the day [ closing bell ringing ] >> and ringing the bell there. ♪ deutsche bank's ceo of course joined us earlier in the show on the 20th anniversary of the new york listing for deutsche bank welcome to the "closing bell," everyone i'm wilfred frost along with sara eisen and mike santoli, cnbc's markets commentator. nice close of about 0.4% fractional decline for the nasdaq, but continuing to build ultimately on a fantastic start to the month of october. still to come on the show, a big lineup as we get to earnings
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expected from tesla, ibm, csx, and las vegas sands. we'll break down all the numbers as soon as they closs. plus, cleveland fed president will join us she will also decide who won the argument earlier between josh and mike >> i'm going to call it for mike sorry, josh. >> josh brown is still with us and also joining us meghan chu it's kind of odd to be saying this but given such a strong start to october, we almost have to ask the question on whether it's been too strong. >> it has definitely turned pretty quickly and by the way, that was a debate, not an argument with josh >> allow us to stoke it a little bit. >> very, very short term the market's had a nice little spurt. it's starting to look very, very, very short term, maybe like it could use a rest also just i say this all the
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time, but it acts in such a well-behaved way we literally just tagged the all-time high within a couple of fractions of a point at the close right here with 4536 and didn't go over the intraday high it's operating a little bit between the guardrails, to some degree, but doesn't change the overall story. credit looks fine, it looked like we got the seasonal shakeout so it looks okay even if we have to chop lower to kind of consolidate it a little bit. >> meghan, how's earnings season going? are we getting around some of these concerns around shortages and inflation and margin pressure okay? >> well, sara, i think those are going to be the key points to be following as we continue to get more companies reporting i will say that we started off very strong. my concern is mainly that what's
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started off in terms of the financials is not necessarily what's to come we had very strong results from the financials that's financials, beats have been a little bit lower. and i think that as we move into the broader market, we're going to be faced with more of these issues around supply chains and inflation. and we don't see them going away any time real soon we think supply chain pressures will be with us for the next few quarters so it really is a matter of whether companies can manage through this we think larger companies are probably better suited to do that than small caps but it's a key risk as we look at the inflationary environment over the next year >> josh, following up on the discussion before the close, i know you're constructive on equities, but were you slightly implying that you're a little bit more bearish or cautious when it comes to property? >> well, i actually think what meghan just said is really important. it makes perfect sense that the xlf is at an all-time high and
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some of the large caps look amazing. berkeshire, which i own, looks like it's on the verge of a breakout after a very long consolidation period american express looks great obviously the money-centered banks. that's perfectly intuitive you have to consider these companies just had nine months of record-breaking every month record-breaking stock market issuance m&a, all types of investment banking, selling debt like anything capital markets related has been incredible. trading has been great it's just been this, like, buffet of very, very, very easy comps from last year combined with explosive growth this year. so, that's not going to be what you'll hear from consumer staples. that's not what you're going to hear from industrials or from other parts of the market that are a little bit more challenged by some of the supply stuff that we're all talking about all day long so, we might've saved the best for first, and that would be the
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big concern here with earnings season but, again, i do think we can weather that earnings have grown a lot this year and the multiple on stocks has actually shrunk. and it's not as though there have actually been rate hikes yet. so, i think there is room for stocks to trade higher even if this isn't as easy of an earnings season as last one was and the one before so, that's kind of the way i'm thinking about things and hopefully that's what bears out. >> meghan, what about you? what parts of the market do you prefer right now >> we are underway to fixed income because we do see rates moving higher. i think the key for investors is going to be your time frame. over the next couple of quarters, i expect us to continue to have a higher risk of earnings disappointment but if you look at retail inventory levels, wholesale inventory levels, they're at all-time lows. so we are setting up for a
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potentially very strong second half of 2022 where we could have an an historic rebuild inventory cycle. i think if you're willing to look through that, then u.s. large cap is a great place to be u.s. small cap is an area we are taking a harder look at because they are more exposed to higher rates, not as able to push through pricing pressures. and also not as easily able to outmaneuver the supply chain challenges but international, so far international developed earnings have also come in quite strong and valuations are attractive. we also don't want to forget about international equities either >> let's get to tesla's numbers, which have just crossed. it's been bouncing around, and it's now fractionally higher phil lebeau explains why >> wolf, we knew they would be strong numbers given tesla's deliveries, and the company
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beats on both the top and bottom line, earning $1.86 for the third quarter. the estimate was for $1.59 and those estimates were coming up over the last week. revenues stronger than expected at $13.76 billion. and here's the thing that's going to get a lot of attention. those zero emission vehicle credits that they get for credits, most were expecting it to be in the range of 24.6, maybe 24.7%. came in at 28.8% i have not checked if that is an all-time record for tesla, but those are really strong automotive gross margins we're going to dive back through the results. and don't forget we get the tesla conference call at 5:30. will elon musk be on it? that's one of the questions people are wondering about guys, back to you. >> phil lebeau, thanks so much for that as you said, the consensus for that margin closer to about 25%.
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mike, the stocks are up only about 0.4% when other parts of the sort of highly valued tech sphere, if you want to put it in that bracket did have a much bigger pullback >> it had that tremendous parabolic move from late last year through the s&p inclusion all the way to 900 in january. then it cracked. and actually did struggle a little bit, i think it got under 700 for a bit. it's made its way back it's up 30% since the last earnings report three months ago. good numbers, that's not a really resounding revenue beat, not sure if that's a reason for some hesitation or you just want to wait to see what, if anything, they may see about the pacing for the quarters to come in terms of production deliveries >> we're talk more tesla in a moment we just got ibm numbers out.
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deutsc >> ibm shares missed on revenue $117.8 billion, reporting 17.6 third straight quarter of revenue growth in 2021 eps was a beat, $2.52 versus $2.50 expected here's where investors may be disappointed it's all about hybrid cloud with ibm. growth of 3% in cloud and cognitive software segment that is a slower rate of growth than we saw in the previous quarter of 6%. 5.8 billion was expected, it came in at 5.7 billion of the four major divisions, guys, only global business services revenues were above estimates, and no guidance, again. this is likely because the company's getting ready for that spin yo of that happens on november 3rd the legacy business is going to go into a company called kindrall but perhaps there was some soft guidance here. while we have more work to do, confident that we can achieve full-year revenue growth and meet our adjusted cash flow
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target in 2021 they set out this goal earlier in the year. shares are down about 4% ibm has been underperforming the broader markets are year-to-date and over the last year and some of its legacy. i'll let you know if i see anything else. back over to you >> deirdre, thank you. josh, on ibm, revenue police is -- miss is going to be the big headline maybe confusing some customers because the i.t. spending environment right now is pretty good, isn't it, overall? >> you have to be trying really hard to have a technology business that's not on fire right now. honestly, i almost fell asleep just listening to the superlatives from the release. it's a very, very boring business that nobody's excited about. it trades at a reasonable valuation but it always has. it buys back a lot of stock, but the stock always ends up lower it peaked in 2011. it's been in the ten-year down
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trend. it is really an impossible stock to invest in warren buffet found a way to lose money in ibm. and he didn't buy it at the high this is a company that continues to confound anybody looking at other large-cap technology companies, find new business models, find new routes to growth they can't do it i don't know how else to describe what's going on here. >> that's what they're trying to do >> i don't own it. >> into a cloud and ai company, right? >> i get it. i'm not saying it's the worst idea i get it but i feel like everything they do is three years too late so, like, i'm not in it. i'm not looking at it. i'm not interested in being an investor or a trader here. and may god have mercy on everyone's soul that's involved. it's just not been fun >> stefanie likes it >> you've criticized buffet in investing it before. interesting. we're going to come back to that debate >> i love buffet
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no criticism >> let's get to las vegas sands as well. >> we're seeing a rocky road here for las vegas sands with a big miss coming in on revenue. they were anticipating $1.242 billion instead they got $857 million in revenue. that is a loss of 45 cents versus the loss of 20 cents that was anticipated. let's talk about that key earnings metric in the casino gaming industry. adjusted earnings before interest and taxes and depreciation amortization. it came in at 47 million but las vegas sands points out in both macao and singapore, the ebitda has turned positive that's a key turning point for
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this company that has been buffeted by coronavirus. we know there are strict restrictions in place. beijing has implemented stricter quarantines because there were two cases confirmed in macao early in october and they have just put in place vaccine mandates in singapore for guests there remember that las vegas sands is selling its las vegas property that is expected to close in the first quarter of 2022. that will go to vici in terms of the actual physical plant and to apollo for operations. we expect to hear more on the call about how they hope to turn a corner you can see there the stock down 2.5% at this point >> contessa, thank you we're going to talk a lot about all these earnings movers including a deep dive on tesla and ibm. thank you both for joining us, josh and meghan. >> thank you up next on the show, much more reaction to ibm's revenue
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miss when we are joined by someone who thinks the stocks are overvalued at these levels and how ongoing supply issues and labor shortages could impact the enocomy we're back in just two minutes
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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. let's hit ibm, shares are down almost 5% on the back of earnings just out. the company is seeing a slower rate of growth in their cloud and cognitive software segment but it was really the hardware and kindrell segment that caused the miss your first take on these ibm results which come just a few weeks before the kind rel spin-off >> yeah. thanks for having me our initial reaction was that the results just didn't live up to our expectations, specifically on their revenue side and so we think that this is reflective of an ongoing trend so while we rate ibm as having a
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narrow rating because of really high switching costs, we think that the company does have a negative mote trend as its switching costs are pretty vulnerable right now because, as you see enterprises move over workloads from on-premise data centers to the cloud, they're really rethinking their best vendors for specific i.t. services needs because they know that, you know, they'll be undergoing disruption to their business no matter what so that switching cost argument really isn't a factor there >> so clearly it's down 5% off the back of these numbers of this particular quarter. but once the spin-off is complete and we look forward 12, 24 months, is this going to be attractive relatively high growth tech company again or no? >> yeah. so they've outlined, they first
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see about mid-single-digit growth in the remaining company once the spin-off is complete. and so those numbers that mid-single-digit top-line growth is still not at what its i.t. services peers are at. >> did you see that jim chanos earlier on cnbc on "the halftime report" said that he's betting against ibm, called it a scam, questioned a lot of their projections internally and externally was there anything new to you? the quality of earnings for ibm has been questioned and they've been blamed for financial engineering for years now. is there anything new to that thesis >> i can't really speak to that, but on the same theme, going into the earnings we did have ibm as overvalued, as we think that it's not living up to the innovation it once had, you know, 10, 20 years ago, and that it's really lagged its peers
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and so with that mass migration to the cloud, you're seeing companies just start to unravel their ibm ecosystem and just keep the best of breed services there. so, you know, in terms of overvaluation, we did agree there before coming into this quarters earnings. >> julia, thank you so much for joining us good to see you. >> thank you >>. tesla just reported their numbers. and we will discuss with an analyst who's bullish on the stock what they are looking for on the company's earnings call later cleveland fed president loretta mester on whether inflation can force the fed to move up their rate hike. we're back in a couple minutes ok, let's talk about those changes
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welcome back tesla's shares now lower by 0.7% after reporting earnings that's despite beating on both lines. joining us now to break down the numbers. very good to you both. your first take. >> yeah. it's a strong beat all the way across in terms of even with the creeping expectations that rose
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up so, really going into the quarter the most important metric is gross margin and x credits on the auto side, 28.8% consensus 26 we were a little bit below that at 24, again, because expectations creeped up on the higher numbers earlier this month. so i think the setup was probably, and i think you'll probably see that change as these numbers are stronger across the board >> laura, what are you looking out for on the earnings call >> i'd like to hear how they plan to cope with the outgoing chip shortages this has been plaguing the entire auto industry and it may not be sustainable. so i want to hear more on that i think also shareholders, many of whom are tesla owners or prospective owners, really want an update on the cyber truck design and what's up with the
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$25,000 car that elon musk teased last year at the annual shareholder meeting. >> what about that chip shortage what's your sense on how tesla's navigating it and whether it's impacting sales? >> so i think what we'll get -- we already kind of got a preview, and it didn't come from a tesla shareholder eeting, it actually came from vw inviting elon to speak to vw executives and one of the things that he talked about was how he had tesla engineers redesign the chip so that they weren't exposed to chips that were in shortage and that goes to sort of the culture and probably the most important data point, which is that it takes tesla ten hours to assemble a model three and vb 30 hours. and that's kind of the advantage in how to think about how far in front of the pack tesla is so i think that's what i think we'll get from them on the call. and i think that's an important data point >> on the financials themselves, the margin was attracting some
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attention. is that an important beat for you, or is that not the most important metric >> yeah, it's important for a few reasons. one, it shows the difference of profitability between cars manufactured over in asia versus the u.s. and what that means in terms of berlin and austin i think those are two key points that we want to key in on in terms of timing of these other factories because that's going to be the production ramp that'll drive additional growth. but also shows a mixed ship. we saw it come back with a six-month backlog on that. we haven't seen yet the x. and so any commentary around the x could also be another positive as that's likely to carry a higher margin, too >> judd and laura, thank you for your first impressions we appreciate it up next on the show, cleveland fed president loretta mester on whether inflation and
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supply chain issues are threatening the economic comeback plus, pimco's ceo on how rising interest rates will affect the badroer market, later on "closing bell." ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ i'm searching for info on options trading, and look, it feels like i'm just wasting time. that's why td ameritrade designed a first-of-its-kind, personalized education center.
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the pace of u.s. economic growth has slowed in recent months, according to the federal reserve's latest beige book, which was just released this afternoon. the report credits supply disruptions, labor uncertainty, and continued fears about covid for the slowdown the word shortages appeared 70 times in this report joining us now for a "closing bell" exclusive is loretta mester, cleveland fed president. it's great to have you, president mester welcome back >> thank you very much good to be with you. >> so, we know that most all of you agree that tapering is a go at the next meeting. how are you thinking right now about interest rate hikes and when that may happen >> well, i think if you look at what's happening in the economy, there are those things going on in the supply sign and the demand side. i don't think that interest rate, you know, hikes are coming any time soon because i don't think we'll reach our goals which are maximum employment and inflation at and above 2% for some time. so, i think we're going to
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basically think about the decision, you know, coming up, which is about the asset purchases. and then as those wind down, we'll have time to assess where the economy is, what's happening with inflation, what's happening with employment so that we can see the progress towards our goal so, that's a longer-term, that's not a current, you know, decision that has to be made we're going to look at that as we go forward. you saw that in the last set of economic projections that the fomc purchase was put out. the thought about raising interest rates is not a near-term consideration. >> and, yet, inflation is running pretty hot, hotter than most people expected, and lasting longer than most people including you guys at the fed expected have you stopped using the transitory word? have you changed the way you thought about how long and how persistent this is going to be in our economy >> i mean, certainly we've all looked at the numbers and we've all looked at our forecast, and
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i did revise my forecast for inflation because of what the conditions on the ground suggested. but i don't like the word transitory in the sense that i think it's a little misleading in terms of meaning short-lived. i think it's better to think about what's the sources of the inflation, higher inflation readings this year and a lot of those increases can be tied directly to the effects of -- whether it's pent-up demand, which of course raised prices for some goods as we came out of the shutdown, or whether it's the supply considerations that are very, you know, very across various sectors, worse in manufacturing construction but every firm we talk to in our district is talking about supply considerations we had an advisory council meeting this morning with community depository institutions, and some of them said for sure they're hearing that from all their customers. but what they're also hearing is
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that the customers are learning how to continue to do business even though there are these shortages. so i expect those to last longer all of our contacts were saying those shortages are going to last longer than we originally expected but i still think that as those wear off and as firms can navigate that, we'll see inflation readings come back down they're going to be elevated at the second half of this year but i think they'll come back down next year and that's important because if we don't see that happening, then we have to reassess, well, if we're attributing most of it to supply, if those continue to raise up even after the supply chain disruptions are abated and pent-up demand is really abated, we can't attribute that demand to covid, the re-opening then we'll have to say, well, it could be that there's really a demand side factor here, and in
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which case then monetary policy might have to react to that. there are these demand-side factors. but we're going to have to see how that plays out over time most of the forecasts have inflation coming back down and that's my base line forecast i just see that there's upside risk to that, and i'm going to be very attentive to those readings inflation expectations are also a very important part of that. and so far the median-run inflation expectations and longer-run inflation expectations are still at levels consistent with our 2% inflation goal but, again, we don't want to get into a situation where they continue to move up because that will, again, be a signal that we may have to do an adjustment, that maybe it's more than just supply side, maybe it's demand side factors >> right and obviously there's a self-fulfilling prophecy, i guess, aspect to inflation expectations pivoting a little bit though, what are your views at the moment of the housing market
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are there fears that that's getting a little bit overheated and areas that would have you acting today and now in terms of hiking rates if we didn't have all of the other recovery aspects that you've been talking about? >> certainly if you look at prices they've been frothy there's been some pullback on the housing in the last report i would say that some of what's going on in the housing market is also related to the pandemic. we saw that big surge in demand for housing as people moved out of cities and into suburbs and needed more space. so i think, again, that's a covid effect and a pandemic effect so we don't want to overreact on that. that said we're always attuned to sort of these imbalances in financial markets and we have to be watchful of those continuing. i just don't feel that that's a reason for us to be changing monetary policy at this point. my view on monetary policy now
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is wholly driven by what's happening in the macro economy and those macro economic policy goals and now really worried about a financial stability issue at the moment. >> president mester, earlier today on cnbc, hedge fund heavy weight paul tudor jones weighed in on inflation, which he thinks there is a lot of and that it is here to say. and fed policy, just listen to what he said >> first and foremost, i'm concerned about the future of this country so, clearly i think we have maybe the most inappropriate monetary policy that we've seen maybe in my lifetime we are adding stimulus, we are still quantitative easing when we should be doing the exact opposite >> what's your response to that? >> well, you know, we laid out our guidelines on what we were going to do with those asset
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purchases, as he was saying. and my own view is we added that guidance in december that we needed to see substantial further progress towards our goal i think since december we've achieved that. so i am supportive of us beginning to do the taper. now, that said, we're tapering asset purchases. we're still going to be adding purchases and adding to our balance sheet. so we're reducing the level of accommodation. and so he probably would think that that's not enough but i think where we are now when policy is more calibrated toward what the outlook is if inflation does move back down to levels that are more consistent with 2%, which is what the forecasts are, if employment and labor market conditions continue to improve, then i think we'll be in a position where we can actually start having that conversation about what's the appropriate level of interest rates.
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but right now i'm very comfortable where policy is and the direction that we're going in terms of the asset purchases. >> pivoting a little bit, i'm sure you've seen the coverage in the spat that senator warren got in with chair powell and i wanted to ask not specifically about that, but what triggered her comment about the safety of the banking system in the u.s. do you think it's fair to say that the fed has relaxed regulations so much in recent years that we have a dangerous banking system >> no. i think the banking system is actually quite healthy we are trying to always look towards making sure that it's a safe and sound banking system, and also a financially stable one. so looking across not just vertically at individual institutions and right now i think it's healthy. we're focused on all the right things in terms of risk management and i think we can say that, you know, because the banking system was in good shape when the
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pandemic hit, it was able to be a real force for good in terms of getting credit out to the businesses and the households who needed it. so, i'm comfortable where we are. i do agree that we need to be always looking at to make sure that capital levels, liquidity levels, capital against liquidity issues is robust and staying healthy, and the resiliency of these institutions is very important. we also have issues with other kinds of institutions in terms of, like, we saw the disruptions in the treasury markets early in the pandemic and so there are longer-run issues and more median-run issues that we have to make sure that we shore up our financial markets. but right now i'm comfortable with where the banking sector is >> and just on your economic outlook, president mezer, we hit a little bit of a speed bump with the delta variant here in the u.s. the atlanta fed just put out their gdp tracker,
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lowered it to 0.5% for this quarter's gdp. are we slowing or are we accelerating where are we into the end of the year and into next >> the third quarter is going to be weaker than we saw in the first half of the year, no doubt. i'm expecting the second half to come in at a pace so that we're going to still make the year be between 5 and 6% and we'll have to see. but, again, what has been remarkable about the economy is how resilient it has been in the face of these extraordinary shocks and some of what's going on in the third quarter -- some of it is just these headwinds from the fact that labor is in short supply at the moment, partly due to delta and due to the pandemic, and the supply constraints are also a headwind on growth. i expect those things to be relatively short lived in that we'll see growth, you know, be pretty good in the fourth quarter, not as high as it was in the first and second quarter.
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but, again, for the year between 5 and 6% >> loretta mester, always good to have you on the show. thanks for joining us. >> thanks for having me. >> president of the cleveland fed. we will get much more on the fed's rate hike time line tomorrow when we are joined by the atlanta fed president raphael bostick. my takeaway from that is that she said interest hide ke rates aren't coming any time soon. time now for a cnbc news update with shepard smith. >> will, thanks very much. there is some breaking news in the hunt for the killer of gabby petito just moments ago the fbi's special agent in charge of the search for brian laundrie, gabby petito's former boyfriend, made an announcement in florida that human remains had been found those human remains found in the same reserve where they had been
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searching for the past month or so for brian laundrie. i want to back up to this morning. this morning we got word that brian laundrie's two parents who have not spoken publicly and for weeks didn't cooperate with police at all, according to authorities, that those two parents informed local police that they wanted to go to this reserve and begin searching for their son brian laundrie once they got there, law enforcement met them and while they were there, they discovered what was described to nbc news' pete williams as some articles believed to belong to brian laundrie we later confirmed, or pete williams did, that those articles were presumably his backpack and possibly other items. as the search continued, according to authorities, they found what pete williams learned was at least partial human remains. immediately they set up a working tent in this reserve and began working on evidence in that area. a short time later, they set up
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a second tent presumably another area of evidence the medical examiner's office was called, and then right after the medical examiner's office search dogs, dogs to search for human cadavers so as the process moved forward, the fbi announced that they'd be making an announcement at 4:30 eastern time they did just moments ago that in fact they had found human remains. we don't yet know whose remains they are that's a process that could take some time. the authorities said that the fbi could be on site for the next couple of days. in addition the air space they've announced is going to be closed over that the question now is how is it that brian laundrie's parents were able to lead authorities almost immediately to the very spot where brian laundrie's items were recovered and eventually where these human remains were discovered? and what questions might authorities have for those parents? all of this will be part of our reporting tonight on "the news" 7:00 eastern right after jim
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cramer on cnbc it's a major break, when the it's brian laundrie's remains, well, remains to be seen wolf and sara, back to you >> indeed, shep, thanks so much. we look forward to it. up next, mike santoli has a look at some surprising new data that's giving new clues about a potential economic rebound here's a check in on today's after hours earnings movers.
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welcome back we've got this news alert on the spending plan in d.c yun li has that for us >> reporter: two sources are now telling me that senate democrats are searching for ways to pay for their social spending package without touching the corporate tax rate instead they're focusing on including a new tax on stock buybacks, a minimum tax on corporate book income, overhauling the international tax rate, and ramping up tax enforcement. they're hoping to reach some sort of agreement by the end of the week in order for them to meet that end of the month deadline for passing both this package and the infrastructure both but it looks like they're now starting to make some tough decisions on their tax plan. >> that would be bullish for wall street certainly. let's send it over to mike santoli now who's taking a look at estimates for economic growth we were just talking about it with the cleveland fed president. >> this is the atlanta fed gdp now model, which is for the
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third quarter, the quarter that ended a few weeks ago. started out at around 6% it's down to around one-half of 1% it doesn't mean that this is necessarily where the gdp is going to end up. it shows you the direction of travel what's interesting is that this is about when the stock market peaked, and through the entirety of the third quarter cyclical stocks were weak this shows you the market was sniffing this out to some degree wall street is seeing this perhaps as deferred. delta has eased up and therefore you may be getting we had talked about when it peaked and then when it troughed, it's kind of rolled a little bit again still in negative territory. we had this sort of comeback on the way. and then just the last little run of economic data have come short of economists' forecast. it shows you that it's a little
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bit of a stop/start story. it reason it resembles what we saw in 2019 some mixed signals on immediate term economic growth, and pretty much everybody feels like it's about to quicken up again, guys. up next, pimco's ceo emmanuel roman that's next. wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq thanks for coming. yeah... oh. donow when it comest! to a financial plan this broker is your man.
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on "squawk box," ceos from american airlines and autonation talk quarterly outlooks. tomorrow 6:00
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celebrating its 50th anniversary at its annual client event tomorrow where it takes a closer look at the next five decades. >> an exclusive interview. over to you. >> thank you and manny, thank you for being here so as mentioned, you are celebrating your 50th anniversary and are calling for a radically different macrooutlook in the future what does that look like
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especially when we have seen in previous years decent returns, low volatility, the future is not so bright, is it >> thank you for something it. we are celebrating our 50th anniversary and the reality is it has been a great 50 years great for bond market, returns have been strong it is unlikely in the next five years that we see the same type of return and we have pulled back some of the expected return this year. so we are more measured in our outlook in terms of what may happen in the future even if the rebuilding is strong and the bounce is strong out of the pandemic, there are a lot of things we don't know and a lot of risks that may happen >> the more near term, inflantin is front and center for a lot of
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investors. do you think inflation is the new normal, a term pimco coined in a previous outlook? >> we think inflation is temporary and temporary is a ve vague concept. it may last nine months to a year it is often linked to the labor market or supply chain that being said, we forget about how efficient the economy is and how the economy finds a way to solve problems and the long-term trend remain intact efficiency, all of the things here that should in the next 12 months put downward pressure on inflation. when it exactly happens is hard to tell.
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i think you will see some volatility in terms of the prints and what the fed may or may not do >> we are grateful to you for your perspective and insight thank you so much. >> thank you so much >> back to you >> thank you so much up next we will get another check on today's after hours earnings why shares of ibm are under hard selling pressure, down 5% in after hours selling. it's another day. and anything could happen. it could be the day you welcome 1,200 guests and all their devices. or it could be the day 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
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breaking news on covid vaccine boosters meg? the fda issued authorization for covid boosters for j and j and moderna. more importantly the fda is allowing mixing and matching of boosters saying anybody can get any booster and laying out the circumstances in which they should the eligibility group for
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moderna and pfizer boosters remain the same in terms of who can get a booster and when m moderna moving up just a tick. >> pretty much as expected as far as the vaccine news. the market, we had a pretty strong day although tech was left behind. i wonder how much to make of that how long can this uptick continue as we have gotten back near record highs. >> i think you have to give it the benefit of the doubt to the market and say we are still responding to the same things, earnings going higher. earnings seasons will probably be a lot of back and forth and not a lot of progress. often that's the way it goes but we have insulated ourselves
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against the downside recently. not necessarily the most persuasive thrust higher meandering up higher >> a positive earnings season from the way banks reacted netflix closed down today. after hours. it seems like there are more decliners. >> that was the rule for the prior three quarters that was also partly because everybody knew they were going to beat by such a hard number. i think it has to hash its way out. we see what happens to fourth quarter estimates after this season that tells you if they were just moving the ball forward and substantiating -- >> watch ibm that's down after hours more than 4.5%.
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a miss on stimates they will be punished for that even though red hat continues to do 17% growth. >> cleans up the story you try to focus on the stuff -- $120 billion market cap. it's shrinking compared to what else is out there in tech. there is a strong legacy, but not that big >> we are out of time here on closing bell "fast money" starts now. >> live from the nasdaq market site, this is "fast money. i'm melissa lee. tonight we are all over the after hours action tesla down calls for ibm and lvs kicks off. we will bring you the big headlines from those quarters. plus craftin


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