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tv   Closing Bell  CNBC  October 26, 2021 3:00pm-5:00pm EDT

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there. >> but its is the decision making centralized >> very concentrated among a certain group of people. >> lucky people these days thanks for watching "power lunch. "closing bell" starts right now. welcome to the "closing bell," everyone. i'm wilfred frost at the new york stock exchange. more records set on wall street today. thirsty work, but we're well off the best levels of the session as we head to the final hour of trading. >> i realize that was blocking my whole shot. welcc welcome, everybody i'm sara eisen facebook turning lower, weighing on the whole market after initially getting a strong pop on earnings. stock down around 5% other earnings are also in focus today, including some sizable moves for u.p.s., ge, eli lilly, and many more after the close. consumer confidence topping estimates for the month of
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october, up four points from september. we have 59 minutes left to go in the session. >> we have a big show coming your way in just a few minutes, we'll speak with the ceo of $200 billion pharma giant, novartis on the back of their earnings as that company starts a strategic review of its generic drug business >> get ready for a jam-packed afternoon of earnings with results from alphabet, microsoft, twitter, visa, and many more. >> let's get to the stories we're watching mike santoli tracking the market action josh lipton with what is driving nvidia higher. frank holland with the earnings pop for u.p.s. mike, start us off >> rally has slowed down a little bit grown more mixed under the surface. maybe not too much of a surprise as of right now, s&p 500 is up more than 7% in les than three weeks. so this has been a pretty assertive rebound off that shake-out we got in september and october. we look at short-term momentum signals, the signs that the market is running just a little hot in the near term
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it looks a little like what we got in early april as well as early july so not some kind of perfect mega top signal of any sort, but a little more continuation then it starts to flatten out. however, seasonal factors a little stronger now, and arguably, we got more of a thorough pullback in september and october, so maybe it's a little more energy left. so that's kind of the broad setup here, but the trend is pretty much in fact credit markets very supportive. take a look here at tesla, of course, a marquee reason the s&p has had the extra oomph to the up side. relative to bitcoin, over five months, yes, a cherry picked time period, but also relevant because it goes back to a period in may when tesla hit its lows for the year, went from $900 to $600, and bitcoin was coming off that mini crash from $60,000 to above $40,000, and they're moving synchronously nvidia is not too far off this path as well in this time
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period the only connection is not that tesla the bought some bit coin in mew view. it's that they feed off the same energies a combination of we're going to change the world we will never stelthis asset on one hand, and incredibly leveraged to short term hot money flows on the other hand. that create a lot of aggressive moves in the near term in a longer term up turn, which both have enjoyed small cap stocks yesterday, it looked like their day to join the party at new highs has nat happened russell 2000 still below the highs from earlier this year here's ways to break it apart. the russell 2000 here in orange, right here, you have the financials small cap financials it's a component of the s&p small cap 600, but showing you that spin. that's the biggest group within the russell 2000 that's been doing great and helping it stay supported. however, health care, psch, has been weak. that's the second biggest group in the russell this is the sort of junior biotechs, the nasdaq smaller
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biotech index. you can see how bad that's been. that's a pretty small component of small cap i highlight it to say the fact the russell 2000 has not been able to join the large caps in high territory doesn't say that much about the economy or the macro inputs or yields it seems to be restrained in part by weakness in the health care >> thank you for that. tesla in particular extraordinary. off its highs today but up 33% this month more from mike later in the show let's check in on nvidia, also enjoying a fantastic run josh lipton at the nasdaq with those details. >> fantastic is right. what a run here for nvidia check out the move in today's trade. hitting a new all-time high here currently at 9 of the past 10 days so far this month, up about 20%. so far this year, up about 90% interesting note from the team over at wells fargo noting how facebook set a big factor driving the cap-x increase investment in a.i. and machine learning capabilities.
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wells fargo bets that will be good news for nvidia's business. did catch up with piper's harsh kumar. he still likes nvidia even after this remarkable run. it's an important player in the data center market enabling a.i. for all of the cloud giants. and he thinks gaming business is going to keep performing strongly gamers as the world opens back up might moderate how much they're playing but they're still going to want nvidia's latest and greatest chips. what about the acquisition of arm? it does not detract from momentum in the core business right now. mark your calendars. nvidia reports earnings on november 17th. >> amd after the bell today. josh, thank you. josh lipton. >> meantime, u.p.s. getting a pop on better than expected results. frank holland with a closer look at the numbers >> up 7.5%, on pace for its best day since april with some very
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elevated expectations. the eps with 16 cents above estimates. the average revenue per piece up 7%, with wage expenses only increasing by a percent. the big number, u.s. domest, margin was at 10%. this beat citi's estimate and a lot of other estimates and under 9%, the same metric a year ago investors seeming to give them a better, not bigger strategy a perfect ten, something she touched on in the call >> the capacity, congestion, and cost concerns. but for u.p.s., our outlook is positive we are ready and tight capacity benefits our freight forwarding business. >> she also says u.p.s. is in close contact with its biggest customer, which is amazon, historically, double digit contributor to revenue great report with only one small weak size. small and medium business growth decelerated sharply. u.p.s. says smbs are now 20% of total volume >> especially in contrast to
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that fed exquarter, which was a disappointment a strong one for u.p.s thank you, frank >> after the break, will the supply chain steal christmas hasbro noting a hit in the third quarter from supply chain disruptions, but will that last through the holidays the stock isup 4% after better results. we'll talk to the company's cfo next you're watching "closing bell. dow up around 100 points flexshares are carefully constructed. to go beyond ordinary etfs. and strengthen client confidence in you. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. ♪
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hasbro shares in the green after the company reported third quarter results that beat profit expectations stock up almost 4% productions like my little pony for netflix helped boost the entertainment business especially, which saw revenue grow 76% from a year ago this comes as the company navigates supply chain challenges at the same time. joining us is hasbro's cfo, deborah thomas before we dive in, did want to express condolences to you, to the entire team at hasbro on the passing of longtime ceo brian goldner just two weeks ago this must have been weird for you to do without him. >> thank you, sara brian was an incredibly visionary leader he was the architecture of the strategy of our company, and it was weird today. i have to admit. but we could feel him with us. he was so proud of the quarter we just had. we had a terrific quarter. strong q3 results.
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and really proud of the team and the quarter that we just had and our year to go forward >> well, let's get right into it, then talk to us about what's going on with the supply chain, because i know you did take a hit, especially on the consumer product side in terms of being able to fulfill demand how severe and acute are the issues right now >> so we're seeing these macro issues for everyone right now. on supply chain. and in fact, we had about $100 million that we were not able to ship in the third quarter, which was just timing. it's now shifted and been shipped in the fourth quarter. so we're quite fortunate in that as we look at our business and why our business is different, we have three segments with entertainment, digital gaming. both of which were up significantly, and consumer products was just a bit behind despite the supply chain challenges >> on that point, i mean, was
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the sort of tv and film side of the business that picked up the slack this quarter is there more growth to come from that or do you think you enjoyed a quick post-pandemic bounce that's already in the books now? >> no, absolutely, we see continued growth we believe that segment is going to grow for the full year and be back around 2019 levels. if we take away the pandemic impact more importantly, going forward, we see more hasbro brands coming out, like my little pony can loved the excerpt you showed at the beginning because my little pony was a proof point in the quarter. it was a fantastic movie the team pivoted it was supposed to be theatrical, and moved to netflix. it was very successful on netflix. got a a lot of eyeballs and we're looking forward to the content to come with respect to the entertainment team as well >> so the question, deb, that many parents are asking, are there going to be toy shortages for the holidays this year, and do we really have to start that process of shopping now? >> well, there will absolutely
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be hasbro toys and games on the shelf this holiday season. the team has done a terrific job with different strategies to make sure we're dealing well with these supply chain challenges, and insuring our retailers, and as i like to say, both virtual and brick and mortar, will have those toys and games on the shelves for the holiday season >> i wanted to ask about peppa pig, deborah, and the extentto which it is underpenetrated in the u.s. versus other markets like the uk. >> that's a great question we love peppa pig. and i'm very excited i was able to get my hands on one of her new peppa pig products behind me very excited with part of the acquisition that peppa and pj both came to our family, and we started to bring products out into the mark frt the third quarter, but the expansion and the availability to reach further geographies with our
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skill sets with peppa and the great entertainment behind e-1, we're very excited for peppa to have more of her adventures in the united states. >> addictive viewing, peppa pig. >> it's blastered all over the double decker tourist buses in new york i know you're pushing it hard. finally, in terms of pricing, sort of another supply chain inflation related question, which is are you having to raise prices to combat the higher materials cost and all the maneuvering you're trying to do to get the toys, whether it's through air freight or delivered in time? >> sure, likemany companies, we're facing inflation that everyone is seeing right now we did take some increases in august minor price increases. we don't intend to take any more price increases. obviously, the retailer sets the pricing overall, but we don't intend to take any more pricing increases for 2021 >> that's good to hear unusual in the consumer world
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these days deb, thank you very much for joining us deborah thomas, cfo of hasbro. >> up next, another earnings interview. we'll speak to the ceo of novartis about the company's move to explore alternatives for its generics drug division check out some of today's top search tickers on cnbc.com the ten-year note knocked off its perch at the top of the list by tesla still second place in the ten-year facebook, digital world acquisition as well, making the top fivean, d nvidia we're back in a couple
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♪ so, let's do it all together people, ♪ ♪ 'cause this is what healthier looks like. ♪ higher today following its earnings earlier before the bell the company beating on earnings and report ed revenue in line with estimates i talked with the ceo, dr. vusant narasimham.
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along with plans to sell its generic drug unit, which the market welcomed. >> it's a leading generic. number two in the world, number one in europe, number one in similars and an attractive market but at the moment, it's having a little bit of a difficult time because of some of the launches over a little delayed versus what we expected in a tough u.s. environment. i would want to emphasis, it's not that short term performance that has driven us to take the decision to starve the strategic review, which could include keeping santos or separating from santos. we have gotten to the place where it is really more separated autonomous unit within novartis, which gives us the freedom now to consider the option that would best suit sandos, best suit our shareholders and our novartis core business. we're going to lack at it, synergies, who is the best owner of the business, and try to come to a decision over the course of
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the last year. >> as far as m&a more broadly, the street has been a little surprised by the lack of deal making this year, and as an active deal maker in prior years, what's your take on why this cycle appears to be slower? >> i think when you look at biotech valuations at the moment, and i think it's a struggle to get the numbers to work, first, from a pure valuation perspective. i do think covid had an impact on the amount of engagement that's happened and that's scientific engagement, engagement of teams is important to get deals to move i think that's getting better. and you know, i think companies in general have been trying to understand a bit of how is the environment going to evolve with respect to covid, of course, u.s. drug pricing, and i think as those things start to settle out, we'll perhaps see a recovery on the overall deal making next year but i think critical first and foremost is to look at valuations that's been challenging over the last year, year plus >> what about the parts of the
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business that were moe impacted negatively by covid-19 thinking oncology in particular. how far along are you toward what would be normal, the base line >> in most therapeutic areas, and you and i have discussed this a few times, we're seeing a return to normality. the one area is oncology and specifically breast cancer, and also therapies that involve hospital stays we're starting to see recovery we're starting to see improvements in diagnosis rates, in biopsy rates, in patients who get our radio therapy or our cell therapy starting to come back into the hospital, but i still think we have probably a little bit more time to go before we'll get to a place where we expect it to be fully back at pre-covid levels probably will be hopefully by the start ofthex year. >> why is that you think people are still hesitant to see their doctors? >> it seems to be a few factors.
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one, i think that patients who need to get diagnosed are a little hesitant still to go into the hospital, especially when they don't even realize these are routine care visits typically where we detect cancers. i think there's also the element in many hospitals because you can't have family come into the hospital still, patients are reticent to sign up for an in-patient stay, even if this would really benefit them in terms of their quality of life or longevity of life again, we see this steadily improving month on month, and i think i'm hopeful by the end of this year it will be back to a formidable place >> i'm curious about your interactions with the fda. seems like there have been more setbacks with drug approvals than normal. has your experience with the fda reflected any kind of change >> we have not seen any changes in how the fda approaches drug approval at least for our filings i think certainly, it is the case that the fda right now is working through a backlog of
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drug manufacturing inspections that i think is well described they're trying to insure they make the right decisions on which manufacturing inspections could be done paper based, which could be done virtual and which require their teams to travel to europe or asia, et cetera, and that's led to a backlog. more on the clinical and development side of things, i think this is more the fact that biotechs go all the way to the end, sometimes taking risky bets on hard science. sometimes the science doesn't work out in a way that fda feels is appropriate from a benefit risk standpoint. >> finally, i always ask you, started going back to january before the pandemic really spread beyond china, about covid-19 what's your sense of where we go from here? a lot of people are thinking, including former fda commissioner scott gottlieb, that delta is the last big variant we're going to have to contend with how do you see it? >> i certainly think we're heading rapidly to a place where
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this becomes an endemic virus. when you look at coronaviruses and we have talked about it on the program before, there are foreign coronaviruses that normally circulate in human populations causing symptoms like the common cold and i would expect this to become a fifth endemic virus that causes these kinds of respiratory systems, symptoms. i think we have, let's see, probably over 10 billion vaccines by the end of this year, i have read reports, 20 billion vaccines by the end of next year. we have oral drugs we're developing another injectable drug, there are antibodies all of this leads me to believe over the coming four to six months this will truly become an endeppic virus we have to protect those who are most vulnerable, make sure they have the protection they need, but for the rest of the population, i think natural immunity combined with vaccines and the availability of therapeutics means this will
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just become another part of life on the planet, and i think that's a testament to medical science and the incredible work of thousands of scientists and people around the world that have been able to bring these innovations like vaccines and drugs to patients to treat covid-19 >> has the whole experience changed your strategy at all or the way you look at novartis, its future, and what types of drugs you hope to deliver? >> i do think that the explosion of acceptance of mrna as a technology has further strengthened our conviction in moving into new technology platforms is the right direction. and when you think about we have been focused on rna therapeutics, but the fact the world was able to accept in rapid order a completely new vaccine technology like mrna, i think gives us confidence that it is the right course there will be opportunities for these technologies to unlock the ability to treat diseases that haven't been able to treat
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before, unlock whole new areas of medicine, and so that's given us more conviction to stay the course it's a course we started well before the pandemic. as you know, we did $70 billion of deals to transform the company in that direction. but i think it gives us more conviction now than ever that that is the future of medicine, these new technology platforms >> our thanks to the doctor, the ceo of novartis. a little discouraging to hear the cancer visits are still down, especially on breast cancer from covid-19 and ground to make up, but overall, investors like the move of potentially spinning off sandos. >> yeah, market welcoming that today from novartis. and we're up 0.4% on the s&p 500 more broadly with 32 minutes left of the session. >> buckle up, by the way, for an onslaught of earnings. we're counting down to results from alphabet, robinhood, microsoft, twitter, and more and we'll bring you the numbers
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as soon as they cross. here's a check on bonds. mixed picture for the yield curve today. ten-year down a little bit 1.62% or so. the short end of the curve just ticking up slightly. we'll be right back. so to accelerate growth, should all our it move to the cloud? well, it isn't right for everything. the cloud would give us more flexibility, but we lose control. should we stay, should we go? ♪ ♪ ♪ darling you got to let me know, ♪ ♪ should i stay or should i go? ♪ we have tons of data at the edge, but we have to act on it in real time. ♪ if i go there will be trouble ♪ and we need business insights across all our data silos, but how? ♪ so come on and let me know, ♪
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welcome back 29 minutes, 28 1/2 minutes left of the session let's dive into some individual market movers. shares of draftkings are moving higher on news it will not make a firm offer for sports betting company intain saying it's confident in its
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ability to maintain leadership and grow in north america without the acquisition. the shares of draftkings up 4% of course, intain down sharply down today here's a check on walmart. and the cnbc investing club newsletter, jim cramer writes he's trimming his position on walmart. walmart climbs back to levels nearilities 52-week highs and cramer says now is time to take some profits off the table for the charitable trust the stock is down about two thirds of 1% more about cramer's stock picks and to sign up, head to cnbc.com/investingclub or point your phone at the qr code on the screen and it will take you there. sbl we're getting new details on the democrats' billionaire tax plan ylan >> sara, democrats do intend to release the details of the billionaire tax plan tonight as they race to reach an agreement on both the social spending package and how to pay for it. senate finance committee
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chairman ron wyden said backing down now on raising taxes on the wealthy would be tough to explain to the american public at a time when stock markets are reaching record highs. he also said that the corporate minimum tax as well as an excise tax on stock buybacks are still in the mix, but these ideas are getting a lukewarm reception in the house. ways and means committee chairman richard neal said his ideas for raising rates and imposing a surtax on millionaire income have already been fully vetted and debated >> if you consider that the caucuses i met with in the last 48 hours in the house, there's more steadfast support for what we did in terms of rates than at any time i think we have offered our proposal which is now 40 days old >> so still some big differences, but democrats are hoping they can reach an agreement in the next 24 to 48 hours, guys. back over to you >> keep us posted. thank you. >> time for cnbc news update with rahel solomon >> hi, sara.
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here's what's happening at this hour we begin in the suburb of st. louis where a plafrs died after being shot this morning. illinois police officer tyler timmons was investigating a stolen car when a man started firing at him. a suspect is in custody. >> the nhl has fined the chicago blackhawks $2 million. the costly penalty is for mishandling sexual assault allegations by a player against an assistant coach in 2010 the general manager has also resigned he said he regrets not doing more to investigate at the time. >> and another dune movie is on the way. legendary entertainment announcing the sequel will be released in october of 2023. it is scheduled to debut exclusively in theaters. the current dune movie was released on hbo max and in theaters so far, it's groced more than $70 million at u.s. theaters back to you, wilf. >> thank you so much when we come back, the number one ranked banking analyst, mike mayo, joins us to weigh in on
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the state of financials and the names he likes now, and we're less than half an hour away from big earnings after the bell. ruls are coming from alphabet, microsoft, robinhood, twitter, visa, and many more. all of those numbers of course as soon as they cross. we'll be right back. tv: mount everest, the tallest mountain on the face of the earth. keep dreaming. [coins clinking in jar] ♪ you can get it if you really want it, by jimmy cliff ♪ ♪ [suitcase closing] [gusts of wind] [gusts of wind] [ding]
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welcome back bank stocks slightly in the red, but a strong month up 9% so far in october. joining us now, wells fargo securities senior banking
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analyst mike mayo. he was named the number one banks analyst in the institutional investor all americas research survey congratulations on that and thanks for joining us. >> thanks for having me. >> my first question is a broad one, which is, i know you're constructed on the banks sector, but how positive are you relative to the last five years or so, because for the most part, you have maintained more buys than sells over that period of time. is this as constructive as you have been or somewhere in the middle >> well, we certainly upgraded several of the largest banks in the middle of the pandemic and a year ago, when i was on your show, it was about defense. it was about the resiliency of the banks and a year later now, you see that credit quality of banks has been far better than anybody expected credit losses are at a half century low. but now, for the banks, it's really about offense, and wilfred, i'll give you two for tuesday. one, we still expect an upward
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rating of bank stocks to the stock market as a whole. third quarter was a turning point, the 1st time traditional banking revenues increased for a few years. more loans, higher rates, we expect this turn not just for the next one or two quarters but for the next one or two years. the second item here is we expect an upward rerating of the biggest banks versus the banking industry for 50 years, money centered banks traded as a discount to the bank group, and we said no more at least in the case of bank america and jpmorgan we increased our targets to high on the street yesterday. for both bank of america and jpmorgan, they benefit from the tech revolution of banks you have seen that win the market share gains over the last year and a half. equal to the six largest bank when it comes to deposits. here's the point that's really underappreciated the big banks, as well as the industry, retooled for the last decade with technology
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and when the revenues come back, you really start to see those benefits through an incremental margin a profit margin on new revenues that are far better than they were in the past, and far better than expected. and that's why our estimates are still well above the street. last year, it was about defense of the banks right now, it's about offense for the banks. >> i get that opportunity in terms of improving the operational leverage from tech, but is the threat from fintech also bigger than ever? >> well, i have three words for you. and those three words are "primary checking account. okay, so when you look at bank of america and jpmorgan in particular, they have been growing primary checking accounts so there's always tech and fintech, and they are getting market share in different places and if the banking industry missed something, it was serving the underbanked and the unbanked, and they threw away too much risk. but look, given the tradeoff after the global financial
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crisis, you wanted the bank industry to derisk, and that's what they did. now they're taking another look at some of those customers that maybe they should have approved when they denied but aside from these preferal items and they are pureferal, the primary checking account is the major relationship vehicle that is for the banks. you're seeing the multiproduct, multidistribution, multigeographic approach of the largest banks. it's leading to more customers, staying around for longer, and with greater customer satisfaction and you know i was negative on the group for a decade and a half and now here i and we are positive on the bank stocks here, and this is really a time that if you're a portfolio manager underweighted bank stocks you better take another look >> i wanted to ask you about a note you put out yesterday, because i think it was kind of unique linking banks to climate change. ahead of the cop-26 u.n. climate
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conference next week i just wonder, in all your conversations every day from clients, do bank investors really care about where banks are on fighting climate change and how do they rank >> well, bank investors certainly care after the global financial crisis when the banking industry was tone deaf to society's needs right now, it's night and day. the bank industry has gotten the memo that you need to take care of shareholders and your other stakeholders and right now, the largest banks have committed $4 trillion over the next decade for climate issues now, that's not going to do enough, and you'll see at the u.n. meeting starting this sunday the world needs a lot more money, but at least banks are doing their part or trying to do their part by being trusted transition advisers to all the companies that they lend to it's not just climate. it's also diversity and it's also being more hypersensitive to the needs of society as well as the needs of shareholders
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the challenge and the opportunity is to serve both >> mike mayo, thank you for joining us and congrats on the distinction today. number one from ii >> thank you >> we're gearing frup a big hour of earnings. we'll preview the key things to watch in alphabet and microsoft reports nextcong i, mipin the market zone. we'll be right back. nurse mariyam sabo knows a moment this pure... ...demands a lotion this pure. new gold bond pure moisture lotion. 24-hour hydration. no parabens, dyes, or fragrances. gold bond. champion your skin.
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mike santoli, and steven weisz as well. let's kick things off with the broader markets. major averages all in the green. the dow and s&p 500 on pace for record closes once again mike, when you factor in some of the high-profile big cap declines off earnings most notably, of course, facebook today, quite impressive we continue to grind higher to these records again. >> yeah, facebook, lockheed, in a smaller group, taking down the defense contractors. but in general, in aggregate, earnings are good enough to keep things supported seasonally, the path of least resistance tends to be higher. we're still working off some of the defensive positionings put in place in september and october. people certainly don't want the market to get away to the upside as i mentioned, top of the hour, it's getting a little extended in the short term. a little choppier below the surface. not as many stocks that are participating today, have really mega caps like nvidia and apple. but it's enough to move things
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ahead for another day. >> what do you make of the facebook turnaround? i know you own some of these big mega tech stocks i don't think facebook is one. >> you know, i actually do own facebook, although i appreciate the opportunity to say i didn't. look, i sold some about 6:00 this morning i have been trading around and sold half of my core position when we had the whistleblower come out this stock is just getting too hard we know the growth is there. albeit shrunken a little bit from the apple moves we know the valuation is there despite the growth coming down but we have regulatory i just find there are so many other ways to make money in the market that i don't have to deal with the angst of owning the stock every day. so i still own a smaller position i'm going to keep it for now, not selling it on this flush, but it's definitely not one of my favorite large cap stocks >> bigger positions in google and microsoft, right
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>> absolutely. bigger positions in those two as well as amazon and i look at them, frankly, as slightly better than cash substitutes, although google in particular has done well there are other parts of the market that have outperformed this those are tried and trued stories that are going to anchor the portfolio. >> we'll talk about both in a moment we're awaiting earnings from both of them after the bell and also awaiting a decision from an fda panel today currently deliberating whether to recommend a pediatric dose of pfizer's covid-19 vaccine to kids 5 through 11 years old. competitor moderna's stock pulling back following a rally after announcing the covid-19 vaccine is safe and effective for kids moderna saying it will submit the results of its clinical trial to regulators in the u.s., uk, and elsewhere to expand the age range of those who can use the covid-19 vaccine down 1.2%. steve, i know you have loved this stock we were joking maybe you top
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ticked it when it was surging a few weeks ago, and you wanted to continue to buy more do you think we have peaked out for moderna in the near term >> no, actually not. i own the stock since about $23, and it's my largest position by far, and trade around it when you had an inane downgrade by the deutsche bank analyst who, by the way, never spoke to the company at all nobody at any level of the company. that was an opportunity to put our trading position look, this company will be the first trillion-dollar health care company, period, full stop, end of story so don't worry about this volatility for now it's a phenomenal story with a great pipeline >> let's pivot onto some of the big tech earners that we're awaiting and very excited about some huge market cap reports tonight. alphabet is coming, and we have a preview.
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>> unlike facebook and snap, google's ad business is expected to have benefitted from apple's privacy changes thanks to its drove of first party data. they may keep the pace of growth up for retail ads. the bigger threat is regulation. not necessarily what ultimately comes down, but how google is already bowing to pressure last week, remember, it cut app store fees by half for now, google set to keep on winning the street anticipating the highest pace of revenue growth in 14 years back to you. >> deirdre, thanks so much for that mike, if we did see more advertising revenue pressure from google than expected, not being as tied to the ios changes, would that spook the broader market quite significantly? >> i think a lot of that has already been kind of incorporated into those ad centric markets. what i do think is worth being aware of is that the magnitude of the earnings beats that alphabet has put up in the last five quarters have been stupendous the smallest beat was like a 27%
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earnings report higher than the forecast they have been beating by -- the question is, have the analysts caught up? because there has been some increase in the underlying forecasts. so the consensus seems to be slightly more aggressive we'll see what is kind of built in even alphabet itself is down 2% since snap's earnings. you're right, it would not be because of the ios changes but just in general, the commentary about softening ad demand because of supply chain and product shortages. i think those are the things to be alert for it has been considered to be maybe the one that's the default big bet of people who believe it's safer, it's insulated from a lot of things going on the valuation kind of reflects that now big premium over facebook's valuation now. >> steve, that's the thing it's a tough setup it's up 60%, one of the best performers in all of tech this year >> yeah, look, i expect it to trade down after the earnings because of exactly what mike said i think all that is already embedded in the stock.
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i'm naument looking at it now, but i know earlier in the day it was doing quite well as facebook was crumbling. i don't know if it's people looking for exposure in google and selling facebook or what it is, but they have some of the same headwinds however, this is a short-term issue. they don't have the social political issues to any of the large extent that facebook has, so it's a much safer play. and a reliable grower. and even if they break these companies up, some of the parts is going to be worth of the whole, so that doesn't concern me so i still own it. frankly, i don't even look at it it's impossible to do work on, as is apple, as is google. i spend my time doing research on the other names where you can get more transparency than any of these >> another big winner this year is microsaumpt, which is up 40% year to date we're going to get earnings after the bell let's get to josh lipton with what to watch. >> here's what to watch from microsoft after the bell q1 eps of $207 on revenue, $43.97 billion
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the stock is on a roll, already up 40% this year hit a new all-time high today. one big number to watch, as always, commercial cloud that's azure, office 365 commercial dynamics 365, and linkedin commercial. morgan stanley seeing growth of 33% to $20.1 billion back to you. >> josh lipton, thank you. and another question is how much we know i.t. spending is very strong right now, microsoft is a huge beneficiary of that and also a barometer how much of that is already in the stock. >> you, you have been able to say that for a long time it's been hovering at this fairly extreme premium to the market both because of diversification and the fact they have been flawlessly capitalizing on a lot of the trends going on in tech. easy to say it's priced somewhere close to perfection. 33, 34 times forward earnings, but it's been tough to poke a hole in the actual fundamental story for a while. you know, other companies, especially intel, have suffered from the fall' off in pc demand.
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it doesn't seem to be filtering into microsoft's numbers just yet. >> steve, what would the valuation gap between microsoft and google versus facebook have to get to for you to rethink that decision to kind of sit out of facebook for now and focus on those two names? >> you know, i just don't see myself having to go back to facebook when the report came out, the stock traded down. i sold half of it before it really collapsed and intended to sell the remaining half, but instead wound up buying some for a trade. it's not a question of the valuation gap. it's really a question of, look, mark zuckerberg, brilliant, done a phenomenaljob out of his college dorm room, but there's an arrogance with the company that keeps them from getting the street on their side to like them and from getting washington to like them. so as i said, it's in that too hard category.
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there's no doubt in my mind the stock is going to recover and go higher i don't doubt that however, i just find other places to make money so for this stock to double, versus a moderna, which i think could go five fold from here, why would i be there and no matter what facebook does, google is going to keep doing it microsoft, the brilliance of microsoft and the ceo is not only in the execution of the business but it's the execution in guiding the street lower than where he's going to come in at, and that's most of the game with wall street. do they beat so the bar is very high for them coming in at consensus numbers will not be good for microsoft so i'm looking for another beat because i think he gets that game >> it's hard to say specifically what people are reacting to in facebook's numbers that has this sell-off throughout the day relative to the reaction late yesterday after the results were reported i do think a lot of value type investors have gotten into facebook those that are there for the relative cheapness of the stock and that's not necessarily the same group that loves tens of
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billions in cap-x to be part of the thrust of the story right now. for an uncertain payback when it comes to this meta verse type of business it might just be a short-term hiccup you have to clean up some of the positioning and some of the shorter term holders out there, but it has broken down technically, so it probably has to gather itself up before it does recover back to where they were a couple months ago >> facebook down 4%. the gofocus after the bell is microsoft and alphabet two minutes left in the session. mike has ininternals for us. >> a little slippery in the internal a little negative breath for most measures here you see 2 billion shares in declining stocks in the new york stock exchange that's been the case all day of small caps also, the russell 2000 down about two thirds of 1%, so there has been some slippage take a look at the dow jones transportation average this was one of the sort of bellwether groups that had not reached a new high, but it has
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done so now. only marginally. you see early may was the last time it really hit a new high. u.p.s. clearly driving this today. fedex is being pulled up along with u.p.s. following the results today. so it has been a story of rails, truckers, and the package companies outperforming the airlines, getting the transport. the volatility index is just a little bid today it's picking up around the 16s, 15 as we mentioned has been the low for the year so maybe there's a little gathering up of hedging ahead of the fed meeting as well as the fact that these massive volumes in things like tesla, call options often drags up the volatility measures as well. >> just under one minute left. slight flattening of the yield curve, but we should mention that now only just positive as we approach the close the s&p holding on to .2% gains. the nasdaq still leads .1% energy, the best performing
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sector, up .7% two sector in the red, industrials and communication services communication services really in the red because of facebook. at the close, the dow and nasdaq just holding on to a fraction of gains. the s&p up .2% >> welcome back, everyone, to closing bell i'm sara eisen along with wilfred frost and mike santoli we did lose a lot of gains but we still got a double record closing high a fresh record for the dow ending up about 14 points. all we needed to do is go positive, and it looks like we got there, although it took a spill into the bell. united health care the biggest contributor to the gains s&p up .2%
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that will be another record closing high 57 record closes of 2021 so far. energy the best performing sector, industrials the worst. oil continues its climb, up another 1% today the nasdaq closing just about flat as well giving up some of its gains. nvidia the biggest contributor to the gains amazon did well, microsoft and google also higher ahead of the results which should come any minute the russell 2000 of small caps lost steam, down .75%. alphabet, robinhood, texas instruments, microsoft, visa, twitter, amd, all set to cross any minute we'll break down the numbers as soon as we get that. first up, steven weisz from short hills capital partners victoria hernandez joins the conversation welcome, mike. to you, what will you be watching as a common thread in earnings feels like the market continues to climb these walls of worry,
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and the path of least resistance is higher. >> it has been obviously, today, you had big losers such as lockheed martin and corning, which were both supply chain stories that's been the only common through those that are missing consumer demand has been strong. even business spending has been strong i think considering most of what we're seeing today is kind of growth and tech related type reports,probably the organic secular trends are going to be what we focus most on. i think a pause for the general market makes a little bit of sense here up 7% in three weeks it has been a little fatigued and that's pretty much what i interpret today. we sniffed out 4600 on the s&p and backed right off it. >> victoria, one theme has been the punishments are more severe on the earnings side for misses or companies that can't deal with supply chain. have you found any opportunities in some of the strong reactions? >> well, really what we have been looking at is trying to kind of even out some of these larger growth names that we have had in our portfolio over the
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last 18 months or so by adding some of the cyclicals, some of the consumer facing names. so even though they haven't been, per se, pullbacks on earnings, we have been adding to consumer story with names like target, with names like cvs, even lululemon lululemon and cvs have earnings coming in a couple weeks we'll see what happens there, but that's how we're adding to our portfolio. the pullbacks is not something that's been a huge opportunity in our viewpoint, although i do think we're setting up earnings better than what we had anticipated coming into the first quarter. people thought it would be a big drop from second quarter, and actually, it's not that big of a drop from the percentage of companies that are beating i think we're sitting in a pretty good spot right now >> i want to hear a couple numbers that are crossing. just the top and bottom lines of each of the headline ones. microsoft moving higher, $45.3 billion. the forecast was just under $44 billion. eps, $271.
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the forecast was closer to $2. i want to mention we have the first numbers from google crossing microsoft beat google to the punch. $65 billion in revenue $65.1 billion for google or alphabet the forecast was for $63.5 billion, so on the revenue line. just digging in to see what the eps has come in at eps looks like it's coming in at $28, which is a beat versus the forecast of closer to $24. but need to get to the guide on that because we're seeing shares slide a little bit down 1% in after hours trade. going to keep digging into those. mike, immediate reaction, slightly negative for google, slightly positive for microsoft, that's delivered a nice beat >> yeah, we'll have to look exactly what google is saying here about perhaps guidance, put that was a very healthy beat, but below what they have been beating at in terms of percentage outperformance in the last five quarters that's all i would really point to in the initial flush of the
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numbers. as we always say, the first reflex isn't always the enduring one. but microsoft has firmed up just a little bit i think, you know, if whisper numbers matter anymore, i think for microsoft, it was above $230, and this $271 is healthily ahead of that. >> deirdre has been diving through the alphabet numbers for us what stands out? we'll get to deirdre in just a moment let's go to steve weiss for an initial reaction steve, i guess as a long-term holder, you like the quarterly results, but it's not going to move you necessarily but particularly on microsoft, a nice little beat on both lines >> yeah, it's expected said before they reported that everybody expects a beat so the problem is if they don't. look, it's a great story ever since they went to a subscription model that's what markets want to see. that's what they pay premiums for, that recurring theme, and
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the innovation on their products just keeps driving further acceptance, further spend on microsoft, and the cloud so there's nothing not to like here quarters, you know, they'll be forgotten in two days. i'm not doing anything with it or with google for that matter either >> google shares have turned around we should say. mike, they're higher now by a little bit >> as we were saying >> as you were saying. can't necessarily trust. >> it is almost every three months, we say you never in the history of capitalism have you seen companies of this size grow this fast. and that still remains to be the case with google 40% top line growth year over year so that's kind of the main thing. i look at the things like, you know, the implied losses on other bets it's are expanded year over year i'm not sure what the estimate was for that, but clearly, they have kind of dodged any bullets that might have been out there in terms of overall ad demand coming in soft >> we can dive into some of the individual line items on google.
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google search came in at $37.9 billion. the forecast there was for $36.3 billion. so the core search business, which of course, is the biggest part of the revenue, was a nice beat by almost $2 billion there on that line youtube ads came in at $7.2 billion. that was a slight miss, forecast of $7.4 billion. google network came in just ahead of expectation, $8 billion. the forecast was there for $7.5 billion. as mike said, the other line, again, basically in line $6.75 billion, which was largely in line with the forecast. cloud, which of course, is often focused on, was a slight miss. again, fractional miss coming in at $5.0 billion. and theforecast was for $5.1 billion. but it's really the revenue there on the typical google search business that delivered the beat on the top line shares essentially flat now on alphabet just fractionally higher let's get to twitter's numbers
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julia boorstin >> well, twitter reported revenue pretty much in line with expectations $1.2 billion. earnings at a 54 cent loss that's not comparable with estimates. it includes a roughly $750 billion fine it would be a gain for working on getting those exact numbers now, monetizable daily active users, that's the key user metric, coming in at 211 million, versus the 211.9 million estimated. just under a million miss. but did share guidance on user growth,saying it will be flat to up in the fourth quarter. and fourth quarter revenue guidance for $1.5 to $1.6 billion with a midpoint below consensus but within the guidance range now, in terms of raging in on the apple operating system change that's been front of mind for all these platforms, i spoke to twitter's cfo and he said the
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company benefitted by being 85% brand advertising and only 15% direct advertising that category is more exposed to the ios changes. he said we're coming from a different starting point from other platforms and we see a modest impact in q3 and are incorporating that into q4 guidance we still think there's opportunity for us to improve the relevance of ads on twitter. as for concerns about a pullback in advertising on explain chain issues, there was no specific reference to that issue. one that was front and center for snap no reference to that in the letter to shareholders, but they did say that more than half of ad revenue on twitter is tied to services and digital goods, and guys, of course, those wouldn't feel the pinch from supply chain issues >> kind of playing down a lot of the issues that competitor snap faced. thank you. robinhood is getting crushed after hours. results just out kate rooney with the numbers kate >> hey, sara robinhood shares down about 8% after hours after a miss on
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revenue. also reporting a slowdown in user growth. revenue at $365 million for the quarter. an increase of 35% year over year, but did miss analyst estimates of $431.5 million. loss per share $2.06 we don't have a comparable number quite yet for that, but a big slowdown in monthly active users came in at 18.9 million for the quarter versus about 21 million in the prior quarter so a big slowdown there in user growth also want to point you to transaction based revenue. crypto saw a big slowdown, made up about $51 million of total transaction based revenue. options was the biggest group here, $164 million, and equities about in line with crypto. so crypto and equities, stocks there, are making up a smaller portion of robinhood's transaction based revenue when compared to options. still looking through the release here we'll bring you more as we have it back to you. >> kate rooney, thank you. >> they're also talking in the financial outlook, robinhood,
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that is, saying they anticipate many of the factors that impacted these results like seasonal headwinds and lower retail trading activity will persist into the next quarter. so seeing a slowdown >> a third of a way into that quarter, so they know, and obviously could pick up. it was late last year that we did see a ton of new entrants and real fevered activity from retail but this is obviously a step back because, you know, robinhood really kind of had the optimum operating circumstances in the beginning of 2020 whether it's the crypto rush or the kind of people being acquainted with options sxanchd p and everybody piling into the markets and that is sort of the high water mark for their growth and operations now it's a struggle. the stock is not remotely valued in a way that really is tied to current revenue levels it's all about how fast they can become more to their client base they don't have necessarily a
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different, a differentiated offering >> they did add dogecoin that was great hope about that, but as kate said, crypto activity declined. >> a pair of analysts coming up later on robinhood we'll dive into that steve, looking on the side of the screen, the big beasts we're reporting trading only slighty, but do you worry the broader indices could get dragged down if we start to see some reactions like we did with facebook today >> you know, it could happen just because there's such a big part of every index, the big tech, but i think it would be short term we have gone through periods in the market where the market is elevated despite the stocks doing virtually nothing or even trading lower. there's been a rolling correction throughout the market i've got some stocks that were down meaningfully, take a look at fedex that's recovering now so i'm not all that concerned about it frankly. i'm more concerned as we get closer to next year and the big
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question, of course, on everybody's mind, is inflation is it going to continue to be transitory, as powell says and powell's reappointment we're close to biden apparently making a decision. i think if biden -- if powell is not reappointed and we go with a progressive, that will be much more troubling for the market than any of these companies. >> we don't know any real progressive names being floated, but it's a good point. we have more earnings to get to. texas instruments just out leslie picker on texas instruments. what do you see? >> hey, sara take a look at the chart for texas instruments right now, currently trading down more than 5% on these numbers. largely due to a miss on the top line here. reporting $4.64 billion when analysts were expecting $4.655
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billion. a slight miss. the bottom line was a beat by about 2 cents. reporting $2.07 per share in terms of eps compared to street estimates of $2.05 per share the conference call today is at 4:30, so hoping for a bit more color on the quarter from that front. the press release did note strong release in industrial, automotive and personal electronics. bloomberg reported iphone is likely to slash their iphone 13 production for 2021 due to the inability for some of their suppliers to deliver enough components for those iphones that was citing people familiar with the matter. so perhaps we could get a bit more color on the supply chain issues that they're undergoing right now. but for the third quarter at least, a miss on the top line. a beat on the bottom back over to you guys. >> yeah, now declining more than
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5% after hours thank you. victoria, i want to bring you in because you own a number of these names. i think microsoft, google, alphabet, texas instruments included what are some of your impressions so far >> we do own all of those. we own visa as well. you have hit the highlights of what we're looking for on these names. when it comes to microsoft, we want to get the numbers on azure. that's a huge component of their business we want to see what that cloud space looks like for them and continue to see that growth going forward. the work from home was a big boost for them so we want to see that continue. you look at alphabet, same thing. but operating margins right there is key for us. that's about 34% operating margins, when you look at a percent of net revenue i'm curious to dig in and see what those numbers look like i'm really kind of surprised at the drop we're seeing in texas instruments down 5%. it wasn't that big of a miss on that number. so i'll be curious when the call
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come uz out. we're going to be listening to what supply chain shortages are doing for them we heard the hp ceo this morning on your network talking about he thought shortages were going to go to second half of next year so i'm very curious to hear the intel call and see what their guidance looks like on supply chains >> microsoft is now moving higher by a percent, by the way, the intelligent cloud revenue which contains azure was 16.96 billion, the forecast, 16.5 billion, so a slight beat there. let's get to visa numbers. kate rooney has those for us kate >> visa with a beat on the top and bottom line. we'll start with earnings here adjusted earnings coming in at $1.62 per share. that was a beat. and revenue as well, $5.56 billion here also a slight beat visa also increasing its dividend by 17%. we have a statement from visa's ceo talking about a relatively tumultuous fiscal 2021
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fourth quarter results were strong, talked about the rebound in travel. said looking forward to cross border travel improving, and they're also talking about rapid growth of digital payments total payment volume also up, about 17% from a year ago. back to you. >> thanks so much for that one wanted to pivot to tesla, because i know you were trading in and out of that of late tell us where you stand now. >> yeah, so i have got a tag end of the option position i bought it yesterday. and tesla was that perfect combination of momentum and share price and momentum in fundamentals and in this kind of market which i believe has been entirely a momentum market, or at least 80% of it, i took the opportunity to buy the calls yesterday. and sold them for each lot between 375% to 500% profit. i think it's still a move, but
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to me, that's both what's right and wrong about the market there's no way a trillion dollar company should add that much market cap overnight on basically one order. the hertz order. so look, the meme craze, the robinhood craze, maybe it's not alive and well with robinhood, but it is elsewhere. and you have to make money when you can trade them mostly long term, but that was too good to pass up. you know, it's also what markets like so while i wouldn't say the google quarter blew you away or microsoft blew you away, they were excellent quarters and growing the businesses between 40% and 50% is phenomenal, but it's what they like. the facebook miss wasn't that big a miss but people don't like the personality of the company so that gets sold down hard. but the amd, i'm sure we're going to get to it, that was a pretty good quarter. maybe that lists the space i don't know >> let's hit those amd numbers christina parts nuvellose.
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>> you're seeing beats coming in at 73 cents versus what analysts were expecting revenue is $4.31 billion, much higher than anticipated at $4.11 billion. what we care about is q4 revenue guidance, which came in also higher their forecast at $4.5 billion according to the earnings rorpt, you have another report quarter as revenue grew 54%. and i know we also care about the gross margins for the third quarter. that came in at 48%. and you're seeing the share price reacting up a little bit, 1.3% at the moment a double beat on the top and bottom line. >> amd moving higher by 1.8% in after hours trade. mike, this one, i mean, stunning performance, of course, of late. and showing very different reaction to texas instruments' numbers. >> the top line miss probably has people a little bit spooked slightly in the short term texas instrument shares held up okay, but yeah, amd has been
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kind of the sweet spot in terms of market share, and also not being a tremendous market cap yet. it's obviously had this incredible run from a very small base, $150 billion it's a big company, it's not a cheap stock, but it's still -- it can move, and it still has room for upside in terms of the end markets to grow into that's why it tends to be one of the favorites here >> expectations were already elevated after intel's big loss. it's considered their pain, amd's gain they still managed to surpass that, up almost 1% thank you, steve and victoria. that was a lot we appreciate you sticking by us we're getting breaking news from the fda advisory committee, they're meeting on vaccines for kids meg tirrell has the story. meg. >> hi, sara. this advisory committee to the fda just taking a vote for pfizer ffs vaccine for ages 5 to 11 it's coming out 17 yes, 0 no, with one abstention. so overwhelmingly recommending that the fda clear this vaccine
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through emergency use authorization for that age group. but that overwhelmingly positive vote really sort of doesn't reveal the amount of debate that happened from this committee today. a lot of the advisers were asking if the recommendation could perhaps be narrowed to more at-risk kids. there was a lot of debate over the benefit risk because of the unknown risk of myocarditis, the rare heart related side effect that has been seen predominantly among young men after the second dose of mrna vaccines. this is a third of the dose of the adult vaccine, so there was a lot of debate whether there will be much of this seen in the younger kids population. the fda doing a lot of modeling and ultimately, the fda came down on the side that the benefit did outweigh the risk. now this goes to the fda to make its decision after that, it will go to a cdc committee next week to make recommendations on how the vaccine should be used and we'll see if they agree this should be potentially narrowed to more at-risk kids
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but right now, a broad recommendation for the first vaccine down to age 5 for covid. guys >> meg, thanks so much >> when we come back here on "closing bell," we'll have much more on tech earnings from alphabet, microsoft, and twitter. we'll talk to a top analyst at jefferies who will tell us which companies he has a buy rating on and the one he's cautious about. we're back in a couple minutes strengthening client confidence in you. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.
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microsoft, alphabet and twitter out with earnings. shares volatile. alphabet still down a little bit. microsoft up 1%, as is twitter joining us, brent dill of jefferies, and rbc capital markets. i'll come to you first on microsoft. what's your take >> yeah, thank you so much for having me. look, i thought it was a really strong quarter broad based beat across the board. we're seeing a lot of the most important areas, cloud, azure, dynamics, all accelerating, and it's really telling us, number
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one, the software spending environment remains hs healthy. number two, we're in the early days of digital transformation and those sector tailwinds are going to continue going up >> brebnt, why is alphabet downa little bit >> 59% year to date, huge move google bet with them in odd years and we're coming up on an even year. don't shoot the messenger, but they tend to have these great years in the stock and they have this digestion there's a high correlation of odd and even embrace the oddness of google, and youtube was a little lighter than most people thought but overall, good numbers. stock still cheap in the mid-teen ebita we still like it long term, but a number of names have had big moves. >> the winner of the three in after hours by a little is twitter, brent and it's also -- it hasn't done a lot this year, but had a nice run from the march lows.
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we knew the ad market was strong, but it's interesting how they distinguish themselves from facebook and snap especially what do you make of that one >> expectations were super low going in the stock is only up 13% been a total laggard they had, you know, multiple kind of trip-ups, if you will. there's just better names in social on the internet so the expectations were super low going in it was basically people expecting maybe a little bigger miss so good enough i would correct kind of my observation. i think microsoft blew it out. you have to go back seven years ago to look at 22% growth. the type of operating margin expansion, that to me is the absolute clear stand out by ten miles. there's nothing even close those numbers were insane. >> richie, do you agree to that level of commendation to microsoft's quarter and what does it mean for their multiple at the moment given that there are some mega cap tech names on
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a relative discount like facebook >> yeah, i think, look, microsoft doesn't have the antitrust concerns, doesn't have the government concerns that you have with consumer internet and social media and you have just so many strong secular tailwinds working at its back at the same time, you're seeing profitability continue to ramp up in spite of the strong growth numbers and everything they're seeing and they seem really, you know, insulated from stuff like explain chain shortages from the apple privacy issues this is by far our favorite mega cap name out there in technology land >> are they growing the pie, brent, on cloud? or are they taking market share? what's the story here with that kind of growth that you said you haven't seen in a while? >> they're taking massive share from oracle. they're taking share from ibm. they're taking share from everyone they're taking share even from zoom over time as teams gets more integrated, and i think even many companies are using
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teams for internal calling as we go into the next year. we think a lot of firms will be using it for outside calling there's a tremendous setup for them, azure 50% growth, again, above the street they're taking share, and the big move that they have in taking share is around power apps which is what we call low code no code there's nafnut ot enough develot build the code we need, and these no code low code solutions that i used in the '90s you can now use more so. let's all be our own software developer. this is a huge opportunity for them, you know, look, you can't get pcs until next year in some of the case studies we have seen that's just going to you have seen this incredible demand and that's not just going to land this quarter it's a recurring theme into next year microsoft set up as long as amy and nadella are running this, i
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don't think we have too much to worry. >> i like what nadella says in the news release digital technology is a deflationary force in an inflationary economy you both like the stock. thank you for joining us appreciate it. >> we have more on alphabet. the cfo giving color on the quarter. let's get to deirdre bosa. >> hey, sara i just got off the phone with cfo, and she attributed that alphabet revenue beat to a broadbased strength across the advertising business she said there was a strong contribution from media and entertainment, financial services as well as travel retail was again the largest driver of ad growth. you're seeing the commerce efforts pay off. on the explain chain, she said they're working with suppliers and logistics to plan and pivot accordingly. when it comes to their own products, their own hardware, she did say they're expecting some supply constraints. on cloud revenue, this was a bit of a miss. she called that miss modest and said there wasn't anything specific to call out that earnings call begins in one
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minute we're going to get more, including the impact or perhaps the nonimpact of those apple privacy changes on google. back to you. >> stock is heading a little south after hours now but it's been all over the place. thank you. it has been a wild after-hours earnings session up next, we're going to talk about the chips, amd and texas instruments reporting a few minutes ago. they were moving in opposite directions they still are i'll break down the movewis th a analyst bullish on both names when "closing bell" coming right back introducing the biggest advancement in the history of small business bookkeeping. having someone else do your books for you. i'm linda, your quickbooks live bookkeeper. let's do this linda! sounds good! a live expert bookkeeper who understands your business. felipe, i've categorized last month's hair gel expenses.
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we've got some breaking news out of washington on corporate taxes. ylan mui has the story for us. >> well, wilfred, we're learning how democrats plan to structure that new corporate minimum tax as they look for ways to pay for their social spending package. democrats want to create a 15% tax on companies with profits over a billion dollars they would still be able to use tax credits for things like r&d, energy, clean housing, and they would have flexibility to carry forlosses. democrats estimate 200 of the country's largest companies would be affected. the lead sponsors are senators elizabeth warren, ron wyden, and angus king it's more aggressive than the
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initial plan the white house proposed which would have set the threshold for profits at $2 billion. this plan is estimated to raise hundreds of billions of dollars over the decades that important because democrats are looking for ways to offset the cost of their broader spending package clearly, the negotiations are hitting the final stages democrats having to make decisions on what's in and out of the plan. the corporate minimum tax appears to be in, and now we know how it looks like >> let's hit earnings. two chip names reporting results. amd in the green after beating on both the top and bottom lines. texas instruments sinking after missing revenue expectations down 4.6%. joining us is chris roland, covers both. likes both chris, wanted to start with amd because we're used to these beats from amd, and lisa su on top and bottom lines i don't think, though, you were
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looking for them to inkrcrease, the forecast, which they are lifting to 65% growth. is that a surprise >> that's a surprise, sara so 65% was kind of our bull case here and it does seem that they're going to hit that. and with good quality. meaning it looks like it's data center products, not let's say low-end pc that's going to get them there, with high gross margins. we like that a lot >> what's the take on texas' miss here? >> yeah, wilfred, so going on right now it's a little different than normal semis quarter in which both demand is playing but also supply is playing into the equation here when you're looking at analog, when you're looking at broad-based semi-conductor catalog companies like t.i., people are putting in hoards or orders right now t.i., although they have more
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fab capacity than many out there, they are not unlimited. and i think that that's what this report is coming up against. the limits of their available capacity >> so which is a bigger opportunity of the two for investors right now given this big dip we're seeing after hours? >> i like them both for the setup for next year. i probably like t.i. a little bit better only because pc has been going gangbusters all through covid and beyond and you know, once we are all back in the office, next year we may have a pc hangover so i still expect amd to grow, to grow nicely, but you could have that hangover for the stock versus t.i. that will be bringing on extra capacity and could see their numbers in fact go up. >> chris, thanks so much amd up 0.7%. texas down time for a news update with shepard smith.
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hi, shep >> thanks from the news on cnbc, here's what's happening now. heavy rain and wind are pounding new england this afternoon after it moved through the new york city area. that nor'easter triggering flash flood warnings throughout the northeast. as much as five inches of rain expected some in areas the wind a big concern for more than 19 million people now under wind alerts. gusts in excess of 70 miles per hour forecasts from the eastern tip of long island all the way up through new england. the new york city area gets its second dose tonight. heavy rain expected to begin around sundown for up to eight hours of downpour. and enough fentanyl to kill 4 million people off the streets today after a global drug sting. the justice department announcing the fbi worked with law enforcement agencies on three different continents to take down drug traffickers on the dark web the traffickers accused of selling opioids and pills laced with fentanyl. the ten-month operation known as
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dark hunter netting at least 150 arrests. 32 million in cash, dozens of firearms, 500 pounds of illegal drugs, including those 4 million doses of fentanyl. and finally, gas prices or gas lines across iran. all the pumps turned off today by an apparent cyberattack state news outlets in iran reporting the nationwide shutdown it affects a system that people use to buy government subsidized fuel no claim of responsibility yet but there are reports of hijacked electronic billboards all across iran showing messages to the ayatollah asking, where is our gas tonight, more sexual misconduct allegations in pro sports in america. this time involving the chicago blackhawks the details of the sexual harassment and sexual assault allegations tonight on the news. after jim cramer, 7:00 eastern, cnbc wilf, back to you.
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>> thanks so much. still ahead, much more on this afternoon's busy earnings session. shares of robinhood sliding after reporting their numbers just moments ago down 6.5% as we stand. a little after session lows. we'll be discussing that next with a pair of analysts. eals on- including the iphone 13 pro with 5g. that's the one with the amazing camera? yep! every business deserves it... like one's that re-opened! hi, we have an appointment. and every new business that just opened! like aromatherapy rugs! i'll take one in blue please! it's not complicated. at&t is giving new and existing customers our best deals on every iphone, including up to $800 off the epic iphone 13 and iphone 13 pro.
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robinhood reporting just a few minutes ago. the talk is down 8% after hours. we have comments from the cfo next ♪♪ ♪♪
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♪ say it's all right, it's all right ♪ ♪ have a good time 'cause it's all right ♪ ♪ now listen to the beat ♪ ♪ kinda pat your feet ♪ ♪ it's all right ♪ ♪ have a good time 'cause it's all right ♪ ♪ oh, it's all right ♪ (rhythmic electro rock music) (crowd cheering) - bito, bito, bito, bito! - [announcer] bito, the first u.s. bitcoin-linked etf. in on robinhood's earnings the stock is down sharply after hours. >> i just talked to robinhood's cfo, jason warnick
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he highlighted the slowdown in cryptocurrency trading $51 million of that to remind you of the numbers came from crypto trading of the transaction based revenue. that's down about s78% from lastwaterer. he said what was really going on, we had fewer new funded accounts joined the platform we don't expect our growth to be linear, he says, we do think it's going to ebb and flow q2, he says, was one of those idiosyncratic market events where there's massive interest, in this case, specifically in doge he said, they love when those moments happen it's a great way to bring in a lot of new customers to the platform, but going forward, it's going to be impossible, as he says, to accurately predict revenue on a quarter-to-quarter basis. as a result, he says they're forecasting some of the same factors they saw in this quarter, seasonal headwinds, lower trading activity, and he does expect and the company expects fewer new funded account through the same amount we saw this quarter, consistently,
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about 60,000 opened in the third quarter. they're looking for sort of the same level going ford wr the stock getting hit after hours. it was down as much as 8%. >> let's discuss this further. let's discuss this further very good afternoon to you both. mercedes, i'll come to you first of all, and i guess i know you were focused on what the crypto numbers were going to be and what it will be from here. is that one of the factors behind this decline, do you think? >> certainly i think that when you look at the crypto total trading volume, it's decreased in q3 as much as 40%, 75% depending on if you're looking at robinhood's number one cryptocurrency, dogecoin, or looking at the broader market. this had a big effect on them. it was a main driver of revenue. it had become the majority use
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case for why new clients were signing up, and now that's come to a bit of a slowdown >> steven, what was your take on these numbers versus your expectations >> yeah, i mean, candidly, first off, thank you for having me on. the results really disappointed, even relative to what had been rebased expectations and to the credit of the management team, they at least tried to telegraph what was expected to be a pretty material slowdown in the third quarter, and mercedes is right. dogecoin was the predominant driver of the revenue contraction. i think the bigger concern for us is all the kpis are moving in the wrong direction. account growth stalled, rpu declined materially, monthly active users which is the best measure for engagement also contracted a as we start to look at the setup, even into fourth quarter, they telegraph or guided to a $325 million revenue number.
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the street is at $500 million, so there's going to be significant negative growth revisions that are going to have to be absorbed here. that's going to continue to weigh on the stock >> so steven, where does that put the valuation relative to current levels and where the stock should be trading right now? there was so much hype when it first went public and retail trading was in stronger shape? >> right now, sara, everyone is trying to figure out whether they need to comp it versus fintechs or versus some of the brokers. and the brokers trade at high single digit multiples on revenue. robinhood right now is trading at a mid to upper teens multiple on revenue i do think it's not going to get quite as low a some of the other brokers. there's still a lot of optionality that people are willing to underwrite, from crypto wallet to international expansion, what have you, but versus that multiple, that's going to have to come in pretty significantly there. >> mercedes, what about other areas of fintech as steven just referenced,
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should they be pushing into those other areas and trying to kind of reignite their growth there, whether it's more typical kind of banking services but via fintech through a fintech prism? >> robinhood talks about wanting to be the single money app that we'll use in the future, so i think they have to think about it if i was at robinhood, i would be running tons of experiments on alternate monetization schemes and different products they could be offering and we're seeing them start to come out with a bit of this with their cash product and also they had earlier released the ipo access i think they do ned to be thinking more broadly as to what are other products that consumers want as a consumer investor at the private stages, i'm always thinking about how can you continue to deliver what people want from an experiential standpoint, and they want fractional everything, not just fractional equities and crypto today. >> i'm looking at the breakdown on some of the transactions,
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steven options were actually stronger than expected. cryptoes sharply weaker than expected and equity a little weaker where does this company in your view go as far as the breakdown? does it become a crypto company, as mercedes is looking for >> yeah, i do think, sara, they have your view go? does it become a crypto company? >> i think they will have to make a deeper push into crypto i think that's a big part of the pitch. management has articulated to the community. it's a big driver. if they can't deliver on that front, i think you will see continued pressure on chairs and in the form of multiple contraction because people won't be able to underwrite that option alt i think people will have to make
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a bigger push. and on the higher side in trading revenues, that's where they will have to deepen penetration. >> and that coming in around 65. expectations was 77. robin hood is now down near session lowers we will get a key read on inflation and supply chain concerns when coca-cola reports tomorrow morning, we will tell you what to watch for when we come right back
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and advanced security integrated on our activecore platform so you can control your network from anywhere, anytime. it's network management redefined. every day in business is a big day. we'll keep you ready for what's next. comcast business powering possibilities. quick check on this afternoon's biggest movers mixed share price reactions. microsoft and visa both higher robinhood missed on both the top and bottom lines and is trading down 8 1/2%. and texas instruments is also trading lower. up next, another day of big earnings on deck tomorrow.
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another busy day of earnings ahead. we will hear from --
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on a programming note, i will be sitting down with the ceo of coca-cola tomorrow morning at 10:00 a.m. eastern time always a good read on consumer demand and don't miss our interview with the spotify ceo mike, in terms of the after hours movers, interesting that alphabet was down 2% it was pretty strong and microsoft also with a strong quarter. >> i think alphabet was the strongest. and the record in the last four or five quarters, how much they have beaten by and maybe how much they have beaten expectations by microsoft only up 40% so to me it's giving up some of that premium. not clear performance on the
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quarter which was pretty good. >> over the course of the last week or so, the rest of the market fairly held up well it has been stock specific >> that has been the pattern without a doubt. if you were to get microsoft and alphabet selling off in the same day -- not saying that it will happen -- you will feel that in the index, but it has not been about companies dragging things down credit markets are solid the overall thrust of earnings is good enough and we have a reacceleration story going on in the real economy which is getting c getting credence with the data >> just wanted to talk about the democrat proposal on minimum tax for corporations now they don't want to raise the overall tax rate, but a corporate minimum tax rate of
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15%. i wonder how that will go down in corporate america it is companies with a billion >> you can deduct what you can deduct to me it is probably preferable to a 3 or 4% increase across the board. >> we are out of time here on "closing bell. thanks for watching. "fast money" picks up now. >> we are live from the nasdaq market site at times square. i'm melissa lee. we have a busy night of earnings all of these companies on the move many of the calls are just getting underway plus, we are trading the record rally. the s&p 500 trading at a fresh all time

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