tv The Exchange CNBC October 21, 2021 1:00pm-2:00pm EDT
in the last month. looks like it's going to challenge that 286 high. i don't see any reason why it couldn't get through i'm long, i love the story >> we apologize that brenda's shot froze, but her pick is right on the top of your screen. it is walt disney. that does it for us. again, another big show tomorrow hope all of you will join us then that does it for us. "the exchange" begins right now. ♪ thank you very much, scott hi, everybody. i'm kelly evans. and here's what's ahead today on "the exchange. do you stick with the commodities craze? oil and metals are lower today oil having its worst month since august but still up 16% in recent weeks we'll look at whether you should stick with the trade and get some of the best ideas for how also, alaska air returned to profitability last quarter as both business and leisure travel have been picking up as we see rising fuel prices, we wonder if they'll hit the carrier next quarter we will speak with alaska airlines' ceo about that and shares of crocs climbing
today. the company has worked to minimize global supply chain disruptions. the ceo will join me to discuss. but first, stocks are kind of mixed today after yesterday's record intraday highs for the dow jones industrial average kristina partsinevelos here with more of the breakdown. >> we've got a mixed bag today this is after investors digest earnings report as well as labor data we are seeing the s&p 500 pretty much flat to the negative, specifically with the s&p 500, it's the sixth positive session in a row that was yesterday, the longest winning streak since july. it also closed just one point of its record close the dow, though, is down about 0.4% but it managed to close above its 200-day moving average day yesterday. that's 221 straight sessions currently, though, there is no sector that is more than 10% from its 52-week high. energy is the biggest laggard.
and then other sectors in the red, you've got materials as well as financials dragging down the dow. and then the winners, consumer discretionary, as well as utilities. but i want to talk about cars. following autonation's big beat and buy-back program, car retailers are rallying across the board today. you've got advance auto parts, o'reilly auto, auto zone both trading at all-time highs. and, yes, the computer ship shortage is bad for production, but the shortage helped pump up the bottom lines of these retailers. auto zone up 2%. o'reilly up over 2%. but let's start talking about technology we got the arc etf trending 1.5% higher led by names like skills on pace for its best day since august after naming a former amazon executive as its chief product officer. and tesla and unity software driving higher jim cramer was on earlier today and said he sees the stock going
to a thousand bucks. the company is continually squeezing out more profit from each vehicle sold. you can see tesla 894. so definitely has a little bit more to go to a thousand >> yeah, almost a $900 billion market cap now kristina, thank you very much. equities have been hovering near record highs, commodities have seen a divergence in performance. copper is up 30% this year, and 11% in the past month along. but silver and gold are negative on the year. both of my next guests the opportunities and commodities, one in the assets themselves, the other in the miners. joining me now a senior portfolio manager. and michael is president and portfolio manager at the permanent portfolio family of funds. so, who wants the miners cajito >> with respect to industrial metals, the miners are where you'd want to be with respect to precious metals and alternative currencies, inflation, et cetera, we would actually own sort of gold and silver
directly, which we do. and the reason for that is we want those noncorrelative properties in the metal, which it's a business, it pays dividends, it has a management team and has to meet investor expectations versus the alternative currency where it's just the pure price of the metal, which works. and we think long term even though it's down here, it's been a consolidation this year given the run of the year and a half before that. it's natural, it's building a base, and we think it's going to go high or long term with the creation of liquidity, stimulus, monetary velocity, et cetera, in the next several years >> people want uncorrelated. that's what's been going on with silver and gold. >> that's right. it's the time to buy it. >> it can come in handy. bryce, you like the silj, among other things but let's just start out with why you like the junior silver miners here. >> we like having both the direct commodity as well as the actual miners.
it just was pointed out that they do not act the same they really are based on different things, fundamental earnings, management team, and the profits that can go with it. but the reserves are also still going to be valued based on whatever the underlying commodity has done and silj, what's nice about that group of miners is it has overlapped with gold as well so, it just helps you be more diversified within the commodities space. but it's tough for us to not like virtually every aspect of commodities right now. i know that won't last forever, but now is a good time and silj is just going to be a nice way to diversify and even out the ride on the community space. >> why don't i see any crypto picks here >> you know, i actually don't mind crypto. i don't have a lot of clients that would ever even consider
it, frankly. but i believe that growth in digital everything is just going to increase. a more traditional strategy there, digital transactions would be ipay as an etf. but straight crypto is something i think everyone should just have a little bit of just so they pay attention to what's going on it's not going away. it's just going to evolve over time to a point where some of the flaws that are embedded in bitcoin will go away there will be other types of cryptocurrencies and digital currencies that will improve upon the process tether is one step in that direction. but there's going to be multiple generations of improvement on that front and you need to pay attention and you need to be there so, i definitely am a fan of that i just don't have any customers that are really considering it at this point. >> your other picks of people who say, okay, well, give me something outside of commodities
or outside of crypto, you like hack, the cybersecurity etf and away so a couple of different plays there for the market as you say we're moving towards digital everything michael, we don't have to spend too much time on the crypto piece of it, but where do you see sort of risk assets performing, broadly speaking, kind of from here and to year end? >> one point about commodities, we think that we're at the beginning stages of another multi-year commodity upcycle, given the lack of investment, given the comedown from 2013, supply/demand issues, global growth, et cetera. with respect to cryptos, we're not against it we would say speculative portfolios if you're willing to lose what you have or experience volatility it's an interesting place to be, but you need to know the risks as well as their potential rewards. it's not tax efficient, but it's certainly a growing area, whether it's the currency values themselves or the blockchain technology we think there's a lot of future
in blockchain technology crypto valuations, though, to me it's a little bit, whether it's a bar of gold or a tulip, i'm not sure be prepared for volatility i don't think they've proven themselves as correlative assets of equities or bonds at this point. there's not enough trading history. but it's an interesting area that's growing, with respect to - >> i was going to say stock to flow is probably the way that those in the crypto space would say they are looking at the, quote/unquote, fundamentals. but i also want to note that your picks here are first republic bank, keycorp so it sounds like you do think that yields are going higher >> frankly, over the next several years, not to mention inflation risk the financials would be an area that we think will take advantage of this situation. and in that area the stocks you
named, we all own them couple regional banks with first republic and key corp, first republic being a little more expensive, i'd buy it on a dip keycorp, midwest regional. all these have pricing power all of them can manage their cost structure and have got good balance sheets they've got good dividends in excess of likely a 10-year yield and likely growing and we think the good total long-term investments as a sector in the stock market that's below the value of the overall market >> 1.67% for the 10-year treasury it's come up substantially guys, thank you very much. kind of a comprehensive view of things right now now to we work, which has finally gone public.
they're up about 8%. and this is two years after the failed ipo their current ceo sat down for an interview earlier today to explain how the pandemic has helped accelerate growth including the launch of an all-access card allowing users to work from any wework in the world. >> pandemic allowed two things to happen. one, it's all about flexibility. no one wants long-term leases, no one wants -- everyone wants a turnkey project. that's one end second is we build the all-access card, which could never have happened if it wasn't for the pandemic where people, the ultimate flexibility come as you want when you want and the third leg is who would have thought that we could actually sell software 18 months ago if you told me that we were to sell software, i would have said no but the pandemic allowed our core businesses to sell an office, sell a conference room we were able to take and white label what we do for a living. >> joining me now to discuss is joel steinhaus, the former head
of wework strategic initiatives. joe, welcome is this a bittersweet day for you? >> well, listen, no, it's a great day. i think that this is a real testament to what the future's going to hold, which is all about flexibility. and i think that if a company wants to succeed in a post-pandemic world, they're going to have to think about what's demanded from their talent and what the talent expects. i think that companies that offer flexibility in this marketplace are really well positioned for the future. >> you know, we've been talking about spacs being kind of a challenged investment vehicle. there's been evolution, you know, maybe the generation coming to market now are not the same that they were six or 12 months ago but for sort of casual observers who ask you since you worked at the company whether we work now would be a good investment kind of to the point about software and the rest of it what are your thoughts on wework today? >> yeah, i think that when you evaluate wework and other
co-working companies, you have to think about it in two ways. you have to think about what market they're playing in, and you do have to think about the value proposition. the market they're playing is enormous it's a giant market, which we're talking about the future of work, we're talking about workplace. we're talking about, frankly, the where of work and all of those things have been re-evaluated as part of the pandemic and then the value proposition being primarily about flexibility, we think is a really compelling value proposition. whatever i would say is and what we're trying to do is there is a need for another place and we think that the future is an ecosystem approach. so you will have a hub space that you use and consume in a very different way, hopefully a more efficient way and then you'll have spokes and that's what we're building out as a network of spokes we really think that there is going to be an ecosystem approach that companies take going forward. >> we looked at some wework. serendipity was a regional one they were very expensive and i wonder if the future of flex workspaces is actually to
be able to use that corporate card, joel, and expense it as companies shift from having everybody in house to maybe paying for those seats to be in a space like yours, do you think that they could become a bigger share of your client mix overtime instead of workers themselves >> we do we think about it in two ways. we want to serve the individual user and really solve for the pain point of working from home that were surfaced from the pandemic we also want to perpetuate some of the benefits that were surfaced people have talked about not wanting to commute five days a week and i think that a future where you're not commuting five days a week means you're going to need another place to go. i think over time what companies will do is they will try to figure out ways to save because what we've been doing has been entirely inefficient relative to people thinking about real estate as really a warehouse for employees as opposed to thinking about it relative to what are the tools that my people need to do their various jobs? and you get to a much more
engaged employee population. you also get to better outcomes from a business perspective. >> so finally where do you see competition going? obviously you have your company now, wework itself is still out there. there's a flurry of others is there going to be a race to the bottom in terms of cost? or is it going to come down to kind of who has the real estate advantage? and what do you think your advantage is from a business model point of view over time? >> i think in all real estate, what's happening is you're going to need to have a differentiator that's based in service and based in experience. so that's how we've oriented ourselves. that's how i think that a lot of operators are arranging themselves in traditional office environments so, our differentiator is going to be having an amazing experience, being consumable, completely on demand, close to home, close to where people live, which is a huge need and a huge gap that was surfaced by the pandemic >> well, there's a lot of people
desperate to get out of their house or they're being kicked out by their spouse. no comment we really appreciate your time today. than they reached number three in the 2019 list and our disruptor 5 virtual summit is at 2:00 p.m. today. there's time to register in the next couple of minutes go over to cnbcevents.com/disruptor-50- summit we are still talking carriers, crocs and crypto the ceo of alaska air group which turned a profit for the first time in six quarters will also join us and we'll also speak to the ceo of crocs bitcoin is also moving lower today. but crypto exchange announcing a new so-called meme round at an eye-popping valuation. we've got all the details, coming up.
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parts of the world, will the games be harder to come by from here joining us now for an "exchange" exclusive is alaska ceo along with our very own phil lebeau. phil >> kelly, thank you very much. ben, thank you for joining us from the alaska airlines headquarters in seattle. i'm curious about something. you guys posted a profit at a time when a lot of your competitors are still posting losses what was the key to profitability, in your opinion >> well, thanks, phil. it was just a great quarter. 12% pre-tax margin, our first profit since the pandemic began. i just want to start by thanking just the amazing employees at alaska they've worked through this pandemic, and now we're celebrating our great success. some of the key strategies were how we deploy capacity we had a very measured approach, very disciplined approach. and we only brought back 80% of our capacity that allowed us to match supply and demand, but also allowed us to execute our operation in a very good way. so we had top performance.
we were near the top in the industry for operation performance in terms of on-time arrivals and completion rates. that's a huge key to it. >> ben, you have huge exposure to alaska, hence the name alaska airlines and you also have huge exposure to california, basically up and down that coast. alaska is getting hit by covid-19, a surge in cases up there. california has the mask mandates, which has, for some people down there said, look, tourism is not where it should be how are you managing those two areas, and how much of that is weighing on your business? >> you know, so far what we're seeing is some impact, of course, the delta variant has weighed on our results pretty much for september we're seeing some impact in october. we're starting to see a shift here right now in the last two weeks, we're seeing bookings strengthen, what we said for the fourth quarter is that we hope to be break-even to slightly positive as we end the quarter
so we're starting to see this delta variant get into the rear-view mirror, and we're starting to see some positive traction >> ben, are you concerned about staffing shortages and i bring this up because the wichita airport said that you guys were cutting back some of your flights from there, and they cited labor shortages frankly this is an industry that when it comes to pilots and certain areas, staffing can be tight especially when you have the vaccine mandates coming in what are you sitting at in terms of staffing, and do you have any concerns there >> no. we're in a good position now with staffing. like i said, i think one of the keys was how we deploy capacity. we're reintroducing capacity as a measured rate. so we're at 80% now. we'll be at 100% by next summer. staffing right now is good we're hiring, we're getting people into the door we're hiring 600 pilots next year, 800 flight attendants, 130
mechanics, over 1,100 airport workers. so far we're not having trouble attracting folks into the door so i feel good about our staffing numbers but it is a challenge especially at the entry-level market, entry-level labor market in a place like seattle but we're making some traction >> if i could just ask how you're managing jet fuel costs, especially the volatility that we might see and do you have any hedging strategies for that that could maybe benefit or cause some concern? >> kelly, great question so nobody likes paying more for gas. and whether you're pumping it in your car or this beautiful 737 max that's behind me, the cost of fuel is a huge drag quarter to quarter we're seeing about a 30% increase in the price of fuel per gallon that amounts to about $50 million. so that's a huge impact to the bottom line. so in terms of fuel hedging, we're 50% hedged on our fuel so that's going to take the sting out of fuel. but it's still a drag, and
unfortunately it's going to mean a lot of higher ticket prices for consumers. >> ben, that was going to be my question we talked to scott kirby at united yesterday he said higher jet fuel prices will mean higher ticket prices how much do you expect your ticket prices to go up either into the first quarter or into the -- >> it's hard to say, phil. the alaska mindset is always to have a low-cost/low-fare mentality. we want to make sure we keep fare as competitive. hard to say. our goal is to bring people on our airplanes and give them a competitive fare, and we'll try and manage our way through this fuel spike >> but you do expect some increase in ticket prices, correct? >> yeah, of course again, we'll try and contain it as much as we can with our fuel hygiene, but there is going to be some incremental increase in
ticket prices because of the cost of fuel for sure. >> the ceo of alaska airlines joining us today from the company's headquarters in seattle, ben, thank you very much he is in front of a brand-new boeing 737 max alaska stands out as the one that post a profit >> that point is very well taken. phil lebeau, thank you coming up, crocs on pace for its best day since july. how they're able to avoid supply chain problems holding up other companies. and the k web is on pace for its third straight weekly gain and best month since january is it clear sailing from here now? we'll explore that
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welcome back to "the exchange," everybody dow's down 120 points. we're about 40 points off the session low. down a third of 1% look at the sort of the mirror image now. while that's down about a third of the percent, the s&p is pretty much bang-on flat at 4535 here are some of the movers this hour no pandemic hangover for tractor supply they're up almost 5% right now, and they are tracking above their all-time closing high. more than 10% growth in comp store sales, up 215% so more than tripling since the pandemic low another debut we're watching today in addition to wework is portillos, jumping 55% after already pricing at $20 a share
at the top end of its target range. not bad for a restaurant that started selling hot dogs from a trailer back in 1963 and krispy kreme down 4.5% today after hsbc downgraded from firm to hold they noted the structure of this ipo appears to be one of the things holding the stock back. shares down 36%. and are pace of their eighth straight week on losses. you can head over to cnbc.com/profor more on that call here is our cnbc news update at this hour former minneapolis police officer mohamed noor sentenced to nearly five years in prison for the 2017 shooting death of justine. he was resentenced today on a second-degree manslaughter charge after his murder
conviction was overturned. on the news, the house votes on finding steve bannon in contempt of congress will republicans vote against bannon what happens next in the vote succeeds that's tonight at 7:00 p.m. eastern time moscow will bring back covid-19 lockdown measures beginning next week as coronavirus infections and deaths continue to soar. schools, gyms, and restaurants will close beginning october 28th for 11 days supermarkets and pharmacies can remain open. and the world's biggest triceratops skeleton known as big john sold for $7.7 million today at an auction at paris it gets its name from the owner of the land in south dakota where it was found and is estimated to be over 66 million years old. big john measures 23 feet long and stands 8 feet high at the hips kelly, back to you >> i love it [ laughter ] kristina, thank you very much. bitcoin is lower today after hitting highs not seen since may
earlier this week. up next, we discuss these moves and the company's meme fundraising roundthat was just completed. we're back in a minute your bins to page 188... uh carl, are there different planning options in here? options? plans we can build on our own, or with help from a financial consultant? like schwab does. uhhh... could we adjust our plan... ...yeah, like if we buy a new house? mmmm... and our son just started working. oh! do you offer a complimentary retirement plan for him? as in free? just like schwab. schwab! look forward to planning with schwab.
app. welcome back to "the exchange." bitcoin dropping today, but it's still up more than 10% over the past week. and its move to fresh highs is coming amid new disclosures that show the crypto industry has been ramping up. >> the new numbers are in, and you can see that the crypto industry is responding to all this discussion of crypto regulation by stepping up its lobbying spending here in the nation's capitol coinbase reregistered to lobby in september, and it terminated its registration earlier in the year now they spent $625,000 in the third quarter. that's up from nothing in the second quarter the crypto exchange also hired outside lobbyists including franklin square group, steptoe & johnson and tiger hill partners. a spokesman for the company told cnbc our public policy presence in washington, d.c. is growing to meet the moment and to represent their views in
critical regulatory debates. we also see a trade association for the crypto industry, the blockchain association spending $210,000 in the third quarter. that's up from $160,000 last quarter. among the issues the trade association says it's lobbying on are a variety of bills focused on digital tokens and currency, as well as broader measures like the defense authorization act and the infrastructure bill, which could have a lot of little line items that impact the cryptocurrency industry kelly? >> all right, eamon, thank you very much. while the crypto industry is pouring money into lobbying, investors keep pouring money into the industry. ftx announced the cloesher of almost $120 million. joining me now to discuss, it's great to have you. how much of this money is going to go toward uniforms and more
stadiums you guys are everywhere. what is this capital for >> yeah, it's a really good question and the honest truth is i'm really excited about the various endorsements and partnerships that have been made. but all of those together are things that are way less than our sort of net profit outside of that. so all of the advertising, all of the endorsements are things that we could meet just with our normal business operations we're in a really fortunate place to be able to be a quickly growing company, which is already strongly net sort of positive cash flow the biggest use of the investment proceeds is mor likely to be acquisitions and investments. we've already done a few, obviously we acquired blockfolio last year, ledger x a few months ago. there are a number more that we are looking at >> so we're showing some of your all-star spokes people i have to hand it to you for the tom brady and giselle commercial how much more is going to go into that high-profile celebrity
endorsement? >> i think we might do a bit more i think that we're sort of nearing the end of ramping that up at least for now. obviously we'll have to see what happens. because our targets here are to form partnerships that we are really excited by and that we hope our users will be really excited by, too, it's really dependent on exactly who we can work something out with. so, there is a fair bit of uncertainty about exactly how many will do, it is super dependent on the details i would guess there will be a few more >> let me turn now to sort of the ftx platform itself. if you guys were to enter another stress test, we spoke with caitlin long earlier in the week who is warning that bitcoin has drawdowns on average of 68%. you throw in leverage in the system, and she's kind of hinting what if it falls 75% granted we went through a 50% drawdown earlier this year, would your platform be able to sort of meet the sudden rush for
the exits? how much of this capital that you're raising goes into kind of shoring up that structure, and what would you tell any investors, buyers, traders who might be nervous about that? >> totally first of all, none of this is investment if i said none of this is meant to be a statement about whether crypto will be going up or down and whether you should be buying or selling but in terms of the platform functionality and safety, this will give us a bigger backstop but it's also the case that we've never had a day in our history where the payouts from that are greater than our revenue. and that includes days where we've seen 25, 30% drawdowns, and weeks where we've seen 50% drawdowns. we've thought for a long time about exactly how to design a risk engine. we've iterated over time and we've built systems that have done pretty well, all things considered, during large market moves before. we've never clawed back. we never anticipate clawing
back that's not how we work and overall we've been able to keep liquid markets. and, you know, keep the risk engine functioning properly even during large market movements. again, that's not to say there will regular basis won't be large market movements but from the perspective of the platform we feel pretty good about how we are going into it >> so where are we in terms of your platform? we've seen this big move by the s.e.c. to tacitly allow bitcoin futures to start trading >> yep >> what is the status of ftx for people in the u.s. who want to use the platform and what do you think this now means for the scope of u.s. kind of regulation if we want to call it that, of the crypto industry over the next six to 12 months >> it's a huge step forward. and i think one thing that is really cool about it is that the s.e.c. for a while has been signaling what would need to happen for them to get comfortable with the bitcoin etf. and this is very much in line
with it. all of the rejection notices that they sent were -- many of them were combined with color about our biggest concern is the regulation of the markets, of the venues that these bitcoins would be trading on, especially anti-market manipulation regulation and the bitcoin etfs that we're seeing right now are a regulated futures platform that draw on regulated platforms, we're excited to join that, frankly, we acquired ledger x, later this year. i think that we may also see spot cryptocurrency exchanges, you know, enter a new regulatory framework some time over the next few years to be determined what that looks like but i would not be surprised to see more regulation of the markets and exchanges, especially on the anti-market manipulation, you know, helping market side. >> and you have legions of
quotes you also have the teachers innovation platform. you have sort of pension-type funds and institutional investors and the traditional venture capital all looking at what they think is the future of the financial system that you're working on would you ever move your headquarters to the u.s. >> so we do have a u.s. headquarters right now chicago is our largest office we also have some in miami and a few other places in terms of what is sort of the relative activity of those two venues, today there is way more buying that trades on the international platform than on the u.s. platform. it's probably a factor of 30 or so i'm really optimistic that we may be able to grow our u.s. footprint by quite a large amount over the next few years and what are the things that are going to lead to that? it's all licensing and regulatory, at least that's a long part of that. i think that, again, we see
ledger access being a big part of that. we're excited to work with the s.e.c. and with other regulators to figure out how we can have fully regulated and licensed market activity in the united states, which is able to mirror the sort of, you know, combination of futures spot that really makes the capital efficiency of the platform work. >> exactly sam, great to have you today congrats, and please keep us posted we appreciate it >> of course thank you. coming up this freight name is up 32%. we'll tell you what the ceo said about inflation. they plan to launch a social media platform called truth
social backed by none other than the former president himself that venture is valued at $875 million including debt, and the deal is still pending shareholder apovpral they are trading at almost $45 a share right now. we'll be right back. get decision tech from fidelity. [ cellphone vibrates ] you'll get proactive alerts for market events before they happen... and insights on every buy and sell decision. with zero-commission online u.s. stock and etf trades. for smarter trading decisions, get decision tech from fidelity. we now find that 85% of individual investors are interested in sustainable investing. among millennials, the interest is even stronger. ♪♪ one of the big trends in sustainable investing is data, and the ability to understand how sustainable your investments are.
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welcome back, everybody. let's do a little show-and-tell. shares of union pacific are up slightly on better than expected earnings but the company is seeing a jump in their fuel costs. they're able to deal with that at least for now >> we're seeing inflation in purchase services for sure, whether it's commodity driven or labor driven we are seeing the pressure right now it's manageable. you mentioned fuel price increases. we offset that with fuel surcharges into the marketplace. and those are broadly accepted in the transportation industry but you're right there is real pressure on prices
inbound. and some of that might be transitory some of it looks like it might be structural. >> sounds like they're mostly managing it bypassing it along jim cramer says the stock is poised for breakout thanks to strong management and the global economic recovery. if you want to read jim's whole take, sign up for the cnbc investing club newsletter. coming up, a new cnbc survey showing supply and labor shortages are now getting the attention of both wall street osrelt n street. the sus,ext.
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to have a universal recycling and composting program for residents and businesses. but it all starts with you. let's keep making a differene together. welcome back cnbc's latest all-america economic survey has found it's not just businesses noticing the supply in labor shortages. it's really starting to hit home steve liesman is here with the numbers. steve? >> kelly, thanks at the stores, on the shelves and at the cash registers, shortages have been plaguing businesses 66% of our 800 respondents nationwide say they've noticed stores closed at odd hours or on odd days
60% report difficulty finding certain goods. these results among the first attempts to see if these supply shortages are indeed affecting average americans. they cut across party lines with very modest differences among democrats, republicans and independents another place where they agree, concern about inflation. the cost of living has now rocketed to the top of the list of concerns of average americans up 16 points from the last quarter, and tied now with covid. and while they differ sharply on the importance of almost every other issue, an equal 38% of democrats and republicans pick inflation as their top concern the results 84% of americans now believe prices will increase in the next year, the highest level in our survey since 2011 large percentages see high prices now for gasoline, groceries, electronics and clothing and as we reported earlier, kelly, that's depressed the overall outlook for the economy,
and president biden's approval ratings. >> yeah, maybe the wrong kind of inflation expectations really telling results our steve liesman with the latest there let's stick with the theme, crocs just crushed third-quarter earnings estimates, hiked its outlook for the near and announced a 150 million dollar buyback. but all of these other retailers have $100 million buyback. corroboration has be aim to avoid production by shifting their production and distribution strategies. investors like what they hear. the shares are up more than %. and more than doubled this year, up 130%. andrew reese, crock's ceo joins us great to have youback. listen, nike, everybody is struggles with these vietnam shutdowns. you experienced that what did you do? >> look, it is exacting everybody, the footwear industry, the apparel industry, et cetera, tremendous concentration of production in southern vietnam i would say the good news is the
factories are reopening. as of today the majority of factories are reopen for a period of weeks, they were shut down. we shifted productions to china, to indonesia, a little bit to bosnia for our european business we cut our line a little bit, so we narrowed our sku base productivity in the factories as they ramp back up will be better and be able to catch up. and we used airfreight in the first quarter of next i don't remember to accelerate delivery here and to the united states. it is a lot of investment but our teams are very good at this and we should be able to combat the head wind. >> you transferred production back to china, bosnia, and indonesia. fewer products in the offerings so you could simplify things and bounce back more quickly and you have been using airplanes to deliver cigna jewelers have been able to
avoid supply chain snarls by using planes, not ships. crocks are about as light as jewelry. you uniquely were able to could that were you able to sell all the product that people wanted to buy. or did you have to forego some sales? >> we have foregone some sales not so much in the third quarter. the third quarter that we just announced was mostly impacted by delays in shipping transit days have gone from 30, 40 days the over 100 days. that's what impacted us historically as we look forward we are foregoing sales. we have taken orders, and we have demand that we know we are not going to be able to sell we have built that into the estimates that we provided to the investment community so we think we have captured that but there is tremendous uncertainty. absent all of these issues we would have an even better
result. >> how would you describe the demand were the u.s. consumer. deloitte said high end consumers are going to spend 15% for, low end consumers, 22% less. i imagine you would benefit from discretionary. it would seem like it would be a good holiday season for you. highlight your comment on the scope of your u.s. sales and how that stacks up with the rest of the world? >> the u.s. business has been very strong for us i mean we have really benefitted over a three-year period from rising brand heat. a lot of what i have behind me are the collaborations we have been doing with brands and celebrities, it drives attention to the brand and builds the brand heat it resonated strongly in the u.s. we have grown our u.s. business strong low for three consecutive years. we have a dedicated consumer base, low end consumers, high end consumers and we see strong traction across the board. the u.s. consumer i think is generally feel boyant. the stimulus that now subsided
was an important factor through the summer obviously test less today. if you have a brand that's in demand and you also sell at an approachable price point, the majority of our products are around $50 and below and the consumer finds it exciting and wants it they can afford it. >> in all seriousness, they are great forred to lest, who it is hard to get shoes on you are trying to comply with net zero initiatives people fear this could raise cost force the supply chain. is this going to be a net positive for your company? >> absolutely. we wouldn't do it if we didn't think it wassed a good thing for the company. it is the right thing and good for our company. the traction it gives with us the consumer, particularly the you think younger consumer outweighs the cost there will be a cost increase
over time. we are blending the sustainably sourced material into our production over time the sustainably sourced material will grow and will allow us to achieve ned zero by 2030 we are excited it gives us traction with the consumer, it drives costs up but overall economic equation is. >> you get that, sg stamp of approval as well. >> out aly. >> thanks, we appreciate it. fun to see that display behind you as well. shares up nearly 10% now on the session. still ahead, chinese tech stocks are posting big gains over the past month. alibaba jumped 17% is it too late to get in we will discuss that next. ♪ there are beautiful ideas that remain in the dark.
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valuations and whether there is room to run. seema? >> kelly, a stunning rebound at k web etf now tracking for its best month since june of 2020. the turn around in chinese tech stocks questioning valuations. morgan stanley saying the market might have overpenalized the stock on concerns of an unfavorable regulation environment. other chinese tech names like baidu, blaed have seen their stock prices jump around 20% this monltd but are still trading at a discount to their historical averages. alibaba now at 21 times earnings, lower than its average of 28 times. valuation is only one part of an investment thesis. the question around what chinese regulators could do next remains unanswered but what you are seeing is analysts including those at
benchmark saying policy changes are conducive to some company's business models like baidu they see an opportunity in artificial intelligence. there is also reporting this week that the chinese government is amenable to releasing more information to tech companies. >> charlie munger piled in thank you seema mode audio. thattest does it for "the exchange," everybody "power lunch" starts right now boom welcome -- i feel like doing the bewitched thing. welcome to "power lunch" i am kelly evans with scott wapner. the s&p 500 trying to extend its winning streak to seven days the markets are focused on earnings they have been good. is that good enough.