Skip to main content

tv   Closing Bell  CNBC  November 15, 2022 3:00pm-4:00pm EST

quote
3:00 pm
it is a fluid situation. we do know based on nbc reporting a senior administration official does say the u.s., they can confirm that something has hit poland they do not know what that is. it's not confirmed that it was a russian missile, and that is why we continue to watch. >> a lot we don't know "closing bell" will pick up the story and more now stocks pulling back from their highs in afternoon trading after reports saying russian missiles had crossed into poland killing two people welcome, everyone, to "closing bell," i'm sara eisen. you can see the dip into the red. on the breaking news out of poland, treasuries also were bit up all day long. they get a sdrtronger bid, safe haven bonds.
3:01 pm
a cnbc political contributor, we turn to him on geopolitical news, fred, we don't know if it was an accident or purposeful but we know that it is going to cause a reaction what do you make of the news >> so first of all, on the question of accidental or purposeful, at the moment, it looks as though it was accidental the polish media have reported and we have an office in poland tracking this as well is that two people died tuesday afternoon poland time after a projectile strike, apparently a russian projectile where grain was drying in a polish village near the border of ukraine prcewoedw. this was a day where president zelenskyy says that there were 85 missiles launched on ukraine. "the new york times" is reporting a hundred missiles the biggest set of attacks since
3:02 pm
the beginning of the war, and clearly what putin is responding to is the fact that the ukrainians took kherson a very key city that he had seized, that the ukrainians are on the march, and on top of that, president zelenskyy delivered a peace plan to the g20, and so this is his attack it does seem as though this was accidental, but whether it was accidental or whether it was intentional, this is going to warrant some response from nato, because if you strike into nato territory, that will trigger at least an article 5, you know, conversation among the nato counsel because an attack on one is an attack on all. if it's accidental, obviously proportionate response would be different than if it were intentional. in any case, i think you're going to see a lot more discussion about more and better air defense systems and ground defense systems against these
3:03 pm
kinds of missiles for ukraine. even speedier arms deliveries to ukraine to defend against this kind of thing. >> talk more about the significance of nato because this is the first time, right, if it is confirmed, since the war that russia has launched -- since the full scale invasion of ukraine back in february that they have fired into a nato country. what's the significance of that? what follows >> it's hugely significant president bush has said that they will defend every inch of nato territory this is obviously part of nato territory, and poland is right across the border -- >> biden not bush. >> i'm sorry, please forgive me. president biden. >> that's okay we know what you meant. >> i just got off a 23 hour plane ride from bali to washington, d.c., so, yes, president biden, you know, said every inch of nato territory will be defended
3:04 pm
there were fears at different times that poland would be hit because so many of the arms deliveries come from poland to ukraine and that russia may at some point intentionally hit poland to shut off the arms deliveries, but that would be such a big risk for putin to do. this does look accidental. accidental or not, i think you have to respond. nato, we have 40 countries, 30 or 40 countries under nato article 5 are compelled to respond. nato article 5 has only ever been triggered once in history and that was after the 9/11 attacks in new york by nato countries offering to defend and help the united states so if this happened, this would be the second time with an accidental hit, maybe it doesn't go that far. i think you can expect nato to meet tomorrow if not this evening, and the polish security, all the top officials in poland's security have been meeting in emergency sessions
3:05 pm
this afternoon about what they're going to do and have to see what poland does one thing, what does nato do and the u.s. do, as poland responds as a nato country, and this escalates or expands and this has of course has been the worry all along is this war does not expand into a war between nato and russia i think all sides will be careful, including russia, certainly will be careful to do whatever it takes to stop the war from expanding while reinforcing ukraine's defenses >> so you were in bali, so the world leaders are meeting right now for g20, and it raises a bigger question about what the strategy is from here when it comes to dealing with russia i know there was drama, whether putin would come, whether search would come either way, here we are, several months into this war, whether this is a purposeful escalation or not, it still is ongoing and ukraine is still being hit with a barrage of missiles which has
3:06 pm
wiped out electricity today. so what is the strategy? what are the topics of discussion now from the world leaders as far as fighting back and helping ukraine? >> right, and whether or not it was purposeful to hit poland, it was a purposeful escalation, 85, 100 missiles on ukrainian territory. foreign minister lavrov is in the g20 meetings obviously there could well be conversations with lavrov around this the meeting with chinese leader xi jinping and biden earlier this week was a demonstration by the white house, by president biden that the chinese, they could get the chinese to warn putin if not so directly around nuclear missiles there are two kinds of escalation, one to nato countries, the other use ago
3:07 pm
tactica tactical nuke. the worry was on ukrainian territory. the whole conversation around the ukraine war is what's taking place there? we did a global forum on food security in bali that's why i was there and we wouldn't be talking about food security right now if putin hadn't weaponized food he's weaponized energy, and so we're on the edge of a war nobody wants and g20, i think there's a lot of talk behind the scenes about how to stop it from escalating and over a period of time move it into a peace process that defends ukraine's sovereignty, democracy and independence >> certainly appreciate you coming on with this breaking news thanks for your expertise. we've got a news alert on a supplemental budget request from the white house. kayla tausche with the details. >> the white house is requesting $50 billion in a forthcoming
3:08 pm
government spending package to fund covid-19 and the ongoing war in ukraine $10 billion to fight that and other infectious diseases, notably half of the $22 billion request. the total includes $5 billion for an operation warp speed like program to develop new vaccines and 2 1/2 billion dollars for existing vaccines and treatments the white house is also asking for $37.7 billion to fund the war in ukraine that request includes nearly $22 billion for equipment and intelligence and about $15 billion in direct budget support. senior administration officials tell me these requests would cover the current fiscal year which ends in september 2023 with hopes lawmakers can include the funding in a comprehensive deal to keep the government open beyond december. the new report comes amid reports of rockets landing in nearby poland, the pentagon, the
3:09 pm
national security council and the state department which is currently holding a briefing at this moment have all said they are looking into the reports they're working alongside the polish government to assess the situation and determine what the next appropriate response would be sara >> keep us posted if you get anything kayla tausche. we'll turn to the market reaction mike santoli with the dash board as always. we're green across the dow, s&p and nasdaq we have lost a lot of steam. >> it was an immediate wobble on the unconfirmed reports. not back to the highs of the morning. the s&p 500 is about 14% higher than it was a month and two days ago for the bear market, october 13th it actually has been a pretty good run for the past three days, it's been flirting with the 4,000 mark trading above the past trading days, and now sitting just below there. i think it's key pointing out basically where we are six months ago so a lot has happened, getting
3:10 pm
just very slightly over bought in the short-term. strong rallies can power through that we'll see if it has what it takes. we have results from wall mmart well as home depot both stocks have responded well. this is a four-year look home depot, walmart, amazon, this is the broader i buy. online retail, and you'll see over this span of time it's a traditional big box firms that have nosed ahead of both amazon and of course leaving behind the ecommerce game so clearly, you know, powering through, it's business as usual as you see amazon struggle in this particular moment of its middle age, i guess you could say or maturity. >> i was noticing bitcoin is higher for a change. i'm not sure there's any stability in the ftx situation. >> it doesn't seem so. it's funny, it seems as if it basically is in absence of
3:11 pm
additional bad news and the fact of the broader market when we got thatlighter ppi number, di get a little bit of a jolt higher, especially in some of the tech names >> we'll see you soon. mike santoli after the break, brian nichol joins us dow up 68 points the low of the day was down 216 we'll be right back hear on "closing bell" here on cnbc. dad, we got this.
3:12 pm
we got this. we got this. we got this. we got this. yay! we got this. we got this! life is for living. we got this! let's partner for all of it. edward jones good luck. td ameritrade, this is anna. hi anna, this position is all over the place, help! hey professor, subscriptions are down but that's only an estimated 15% of their valuation. do you think the market is overreacting? how'd you know that? the company profile tool, in thinkorswim®. yes, i love you!! please ignore that. td ameritrade. award-winning customer service that has your back.
3:13 pm
3:14 pm
3:15 pm
. stocks remain higher today it's been a volatile intraday session. this morning we got good news showing that inflation continues to cool. chipotle prices rose 13% in the third quarter year over year transaction saw a decline of 1%. are those higher prices starting to eat away at consumer demand and are those prices srting to slow joining us now is chipotle ceo brian nichol great to have you on welcome. >> thanks for having me. >> we're seeing good evidence that inflation super high rates are starting to slow on food they remain stubbornly high what are you seeing? >> that's what we are seeing, you know, we anticipate roughly 10% inflation in the fourth quarter. we continue to see elevated pricing as it relates to beef,
3:16 pm
da dairy, tortillas, oil. it's continued at an elevated level, and that's going to continue to put pressure on our supply chain. >> how much is due to the war in ukraine, do you think? >> you know, i mean for us, we purchase a lot of these items domestically, so we're not seeing the war in ukraine have a lot of impact on this. it does have some impact on tortillas and oil, specifically sunflower oil, but for the most part, it's just been and continues to be a really tight market, and, you know, we continue to see these price pressures, which i think is predominantly driven by all the labor inflation that people have experienced over the last 18, 24 months. >> and what about at the consumer, i mentioned transactions, your consumer with an upper income has been willing to pay those higher prices that you passed on. has anything changed >> obviously the consumer from the data we track is still very much worried about the
3:17 pm
inflationary environment, that impact on their budget you know, and obviously influences how often they go out and buy things fortunately for us, we've got a great value proposition, and you know, we continue to see strength in that higher end consumer, you know, the household that earns over 100, $150,000, and i think we have talked about this in the past. we have seen some weakness in the $75,000 household income cohort, and we continue to see coined of the same trend so we look like we're picking up experiences with the higher income consumer, and we have definitely seen a little bit of a stepback in the lower incomes. >> i know you have some news today on the drive throughs, the chipotles, and how you have been growing this what can you share >> we're pretty excited about this we opened our first chipotle in 2018, and for everybody that's where you order ahead in our app or the web site and you just literally pull up to our restaurant, say your name and
3:18 pm
they hand it to you through the window and off you go. we're going to be opening our 500th chipotle in short order, and we're pretty proud of that it went through the stage game process. we demonstrated that it drove, you know, incremental sales, incremental digital sales, and we responded to consumers req' request to have more convenience and access we're excited to be opening our 500th chipotle. >> 500 that's the news. does it impact labor and how much you have to hire? i know at these higher wages that you and everyone else has had to pay >> no, you know, fortunately for us, the way the restaurants are built. we've got two lines, front line, when you traditionally come into the dining room, and walk down the line and build your burrito, and the digital make line, we put the food after we build it on the mobile pickup shelves or you pull up and they hand it out the window to you.
3:19 pm
we'll have a pretty good idea of where you plan on getting your food so we know whether to put it in the dining room to come and grab it or we'll wait for you to come to the window and we'll hand it out the window it works in our existing operating room. >> i wanted to ask you what you've thought about the labor market i know in the past your cfo has talked about the quiet quitters and the challenges of retaining people, front line workers and the tight labor market any change there as we have started to see some layoffs plrl fro -- particularly from the tech sector >> it's tight and tough. we're fortunate, we have the restaurants staffed to our p precovid levels. our business looks different than 2020. 40% digital, 60% in the restaurant, and both multibillion dollar businesses and it continues to be a difficult environment.
3:20 pm
we're investing a lot on retaining, training, developing these individuals that join our company because we've got so much growth in front of us we want to promote within so that people can go from crude to manager to field leader to team director, but we think we've got a special proposition for people if you believe in the purpose of food with integrity, and then you want to grow a restaurant career, we think we're one of the best places to have that experience and with that all said, it's still a tough environment. >> no, i also want to ask you, brian, about your strategy around advertising because you, as well as a number of other companies like general mills and pfizer have decided to pause advertising on twitter, and i am just curious as to why you made that decision? >> look, we just wanted to see where everything lands with that platform you know, we were not a huge advertiser on that platform. and, you know, we continue to
3:21 pm
obviously evaluate all of the different ways that we can comm communicate with our customers and employees. we said let's hit the pause button and see how the platform evolves with the new leadership, and then we'll reassess and figure out the best way to communicate with our guests and our employees going forward. >> what would worry you? what would make you go off twitter and let me ask you also because i know you were a cmo. this is right up your ally of taco bell, your background, what about the brand itself communicating on twitter, which chipotle and everybody needs to do we've already seen with the new blue check mark rule, a fake eli li lily account, i wonder if there are concerns as well >> it's the same principles we use in how we evaluate frankly any media tool we want to understand who's going there, we want to understand how we'll be presented and the way that we can present our message, and
3:22 pm
once we understand those aspects, we make a decision of whether or not is that platform the right platform for us to use, and i think we've done a pretty good job of experimenting with new platforms, whether it's roblox or snapchat, it's crazy now. snapchat is not that new anymore, but we were willing to experiment and as we learn, we evolve with the platforms, and in some cases that means we walk away from it in other cases we choose to invest more. it's similar here. we're just assessing frankly the media landscape, and we'll figure out where is the best place to present our brand with the message that resonates with our customers and our employees. we've got 100,000 employees that we use these tools to communicate with as well >> is it what elon musk says or does is it -- are you monitoring hate speech, like what are the things you're looking at there? >> look, we're definitely monitoring i think the primary thing for us to focus on is who's actually using the platform, right?
3:23 pm
is it the guests that we need to communicate with through the platform that's where this all begins, and then obviously you evaluate, you know, what are other things showing up you know, there are places we choose not to advertise because, you know, a myriad of reasons, right, and we want to show up in place where is it best aligns with our brand's purpose, which is around, you know, this idea of cultivating a better world through food with integrity, so if it aligns with our brand purpose, the guests are there for us to communicate with, and then it presents the opportunity for us to communicate in a way that's effective, we'll use the platform >> brian, really appreciate you taking the questions on a number of hot topics right now. >> a yeah, sure. >> brian niccol, ceo of chipotle we'll show you what's happening in the markets the dow is up 115 points off the highs of the day, up 450. most sectors higher, and the s&p is up 1%
3:24 pm
every sector now is higher just added a little strength from where we were a few moments ago. consumer staples are your best performing sector. industrials are strong technology, the nasdaq is up 1.8%, and so are small caps. when we come back, we'll talk to the ceo of planet finance at the new york "the exchange," we'll talk about the plan to reth t business and expand overseas, next on "closing bell.
3:25 pm
what if you were a major transit system with billions of passengers taking millions of trips every year? you aren't about to let any cyberattacks slow you down. so you partner with ibm to build a security architecture to keep your data, network, and applications protected. now you can tackle threats so they don't bring you to a grinding halt.
3:26 pm
and everyone's going places, including you. let's create cybersecurity that keeps your business on track. ibm. let's create
3:27 pm
take a look at planet fitness shares the company hosting its investor day this morning plans include doubling the membership days with annual revenue growth in the low to mid-teens by 2025. this of course comes on the heels of a strong third quarter. record membership and expanded full year guidance joining us now planet fitness ceo chris rondo, thank you very much for joining us. >> thanks for having me. >> where is the expansion opportunity first of all here in
3:28 pm
the u.s. it feels like people who go to the gym already have gym memberships. >> 4,000, we have been saying that since the ipo, and we have added 1,300 stores since the ipo and coming out of covid with the heightened awareness of wellness, 25% of the industry is permanently closed 10,000 gyms have closed. we didn't lose a single store during covid more opportunity in the u.s. of 4,000. a lot of mom and pops. 24 hour fitness did close some, and national brands. there's more opportunity in the u.s. and on top of that international now too. we're in mexico and panama australia, canada. we just entered new zealand later this year. more opportunity internationally as well. but domestically, we don't take our eye off the ball there's so much opportunity. >> peloton was going to destroy your business. was that just a fad? >> i looked at home fitness. it's not new it's been around since jane fonda. you go down the list, right.
3:29 pm
it's a secondhand experience for brick and mortar peloton, you have the apparatus for your house, you can be a member for ten years, and not spend ten bucks a month. >> just sits in my house. >> recession has to be a head wind for your business, especially the lower income consumer starting to pull back here on high inflation. >> we had 53 straight quarters of positive cops, and the share average of those over 13 years was 12%. even in '08 and '09, we had some of our best. trade balance from higher priced gyms you're not going to stop i don't use a rock wall. i don't need the towels and they come to a $10 membership club because we have great equipment. anything we night lose on the lower end, we gain on the top, people trading down. >> what's the cost of planet fitness membership right now. >> $10 a month, entry level.
3:30 pm
we haven't changed that in years, decades it's our 30-year anniversary. >> why doesn't that go up with inflation? >> we have the black card membership, a lot of americas, reciprocity, use of our massage beds and so on, and we look at the black card membership, if we get you to trade up, even though you see it advertised as 10 bucks mostly, 64% pay 24.99. and around our existing fleet of stores, 2,300 locations is 140 million americans over 15 that don't have a gym membership at any gym. raising prices is not going to get them off the coach that's who we're going after is the first time gym user. >> when it comes to opening new store units, that has been a little bit slower than you wanted, right? you can't open gyms because you can't get hvac. >> is it because of supply chain. >> of all the things, it's not
3:31 pm
treadmills, not the rubber flooring, it's hvac. we have to slow down openings because of that. on top of the 2,300 stores opening, we have a thousand commitments with the franchisees scheduled to open over the next few years. we'll open 150 to 160 stores this year. >> is it still hard to get an hvac >> yes. >> it's not getting better >> no. >> what about higher rates, doesn't that hurt the franchisee's ability to open stores. >> we don't bring in new franchisees. we grow with the existing group, very sophisticated, been with us for many years all multistore operators, they might own 10, 20, 100 location they grow with the cash flow don't need financing, necessarily. inflationary cost, build on construction, that has gone up
3:32 pm
in the situation of the gyms, we don't have cost of goods, we don't have daily deliveries of product that is go up with inflation. once a store is built, we have 12 to 15 employees, and that's it, and the rest runs like a top. >> thanks for joining us stock is up 6% on the investor day. really appreciate it after the break, analyst days are fairly common occurrences but weall street is buzzing about one in particular today. we'll tell you why when "closing bell" comes right back ♪♪ ♪♪
3:33 pm
♪♪ be ready for any market with a liquid etf. get in and out with dia.
3:34 pm
new customers get our best deals on all smartphones. that's right! but what if i'm already a customer? oh! no problem! hey, cam? wow! same deal! yeah! it's kind of our thing. wow! that's a great deal! what if i'm new to at&t? cam, can you? nice! hey! but what about for existing cust- it's the same deal! it's the same... is he okay? “it's not complicated.” with at&t new and existing customers get our best deals on every smartphone.
3:35 pm
3:36 pm
what is wall street buzzing about today, fanatics and michael reuben, literally. i'm told from people inside the room, fanatics hosted a sort of analyst day in new york. it's pretty unusual because fanatics is a private company. i'm told this is a meet michael rubin event. more than 90 folks there south side research analysts from the top investment banks, a mix of internet, retail and gaming specialists ceo and founder michael rubin did a long fireside chat and spoke about the growth plans for the company. could be a sign it's gearing up for an ipo it is look to go ipo in the medium term.
3:37 pm
it raised 1 1/2 billion in the last round it launches its own sports betting platform in january, and is at the heart of some cyclical and secular trends rubin sold his ecommerce business to ebay in 2011 and bought back parts on the cheap and grew it into a behemoth wit the nhl, mlb, and colleges to make jerseys, caps, and other merchandise. they acquired tops trading cars for half a billion dollars bottom line, it's a somewhat complicated business more so than a straight up apparel or betting company, so perhaps this is a first step in introducing the business and the man behind it to wall street when we come back. rbc capital markets, head of marketing strategy, loricalvasina, and reminder,
3:38 pm
listen to "closing bell" on the go by following the "closing bell" podcast on your favorite podcast app. we're hanging on to a gain up 54 points for the dow, more than that on the s&p and nasdaq going strong up 1 1/2% we'll be right back. power e*trade's award-winning trading app makes trading easier. with its customizable options chain, easy-to-use tools, and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunities. while an earnings tool helps you plan your trades and stay on top of the market. [drone speaking]
3:39 pm
technology lets drones deliver pizza. no,no,no! have a nice day. but to deliver powerful insights that are on target you need more than technology. you need cdw. we can help transform and manage your it environment with a dell technology solution, so you can use your data to innovate. wooh pizza is here! i'm still gonna eat it. me too. tip please. dell technologies makes data driven insights possible. cdw makes it powerful. moderate-to-severe eczema.
3:40 pm
it doesn't care if you have a date, a day off, or a double shift. make your move and get out in front of eczema with steroid-free cibinqo. not an injection, cibinqo is a once-daily pill for adults who didn't respond to previous treatments. and it's proven to help provide clearer skin and relieve itch fast. cibinqo continuously treats eczema whether you're flaring or not. cibinqo can lower your ability to fight infections, including tb. before and during treatment, your doctor should check for infections and do blood tests. tell your doctor if you've had hepatitis b or c, have flu-like symptoms, or are prone to infections. do not take with medicines that prevent blood clots. serious, sometimes fatal infections, lymphoma, lung, skin and other cancers, serious heart-related events, and blood clots can happen. people 50 and older with heart disease risk factors have an increased risk of serious heart-related events or death with jak inhibitors. it's time to get out in front of eczema. ask your doctor about once-daily cibinqo.
3:41 pm
result in the bankruptcy of another major crypto company kate rooney with the details on
3:42 pm
this developing story. >> block five, another crypto company reportedly preparing for bankruptcy this is a lending company that sam bankman-fried's ftx had agreed to buy earlier this year and it's the latest collateral damage from ft x's collapse. this report coming from the "wall street journal." no comment from blockfi. we did reach out it comes as the company halts customer withdrawals and in a block post yesterday, blockfi said that rumors, a majority of assets are custodied of ftx are false but we have significant e exposure to ftx. sam bankman-fried was supposed to bail this company out after they saw cascadeinging liquidations agree to go buy blockfi at
3:43 pm
$240 million, and it was worth at $4.8 billion earlier this year sam bankman-fried, the former ceo of ftx also just tweeting. we have heard a couple of tweets today. he says his goal is to do right by customers and says he's contributing what he can to do so he also says he's meeting in person with regulators and working with teams to do what they can for customers after that investors, but first customers. we have gotten some responses from him out there, sara but it seems to be a slow trickle when it comes to these tweets and his responses. >> it's like one letter every, i don't know, few hours or so. but there's reports that he's trying to still raise money to make his customers whole are you also reporting that? >> i had heard ahead of the bankruptcy that was just last friday that he had been scrambling for emergency funding. the idea that he would be able to get an investor with a balance sheet big enough at this point or the risk appetite is hard to believe but we're
3:44 pm
working on it and it's interesting to see the latest developments if he is able to get emergency funding even at this stage in the game when they have already gone through bankruptcy, and we're seeing filings overnight. they are really in the process right now. that does seem to be quite the hail mary. >> 1 million customers unbelievable number could be affected by this bankruptcy. kate rooney, thank you. chinese technology stocks are soaring for a fourth day in a row. up next, we'll discuss whether investors should believe in the bounce that story, plus, tesla takes off. and the dow is up 123 when we take you inside the market zone. ♪ ♪ luxury exemplified. innovation electrified. with apple music seamlessly integrated. the all-new, all-electric eqs suv from mercedes-benz.
3:45 pm
3:46 pm
you'll always remember buying your first car. and buying your starter home. or whatever this is.
3:47 pm
but the things that last a lifetime like happiness, love and confidence... you can't buy those. but you can invest in them. we believe that your investments should work harder for the future you imagine. and that's where our strategic investing approach can help. t. rowe price. invest with confidence. power e*trade's easy-to-use tools like dynamic charting and risk-reward analysis help make trading feel effortless and its customizable scans with social sentiment help you find and unlock opportunities in the market with powerful, easy-to-use tools power e*trade makes complex trading easier react to fast-moving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity
3:48 pm
we are now in the "closing bell's" markets own, cnbc commentator, mike santoli breaking down the crucial moments, and seema mody on the tech bounce. we'll pick it off broad. the dow is down 100 points, s&p hanging on to a 1% gain. certainly off the highs of the day. we did get more evidence that inflation is cooling but is it a bigger question what the fed makes of this? because as long as they are still hell bent on getting to 2%, that's going to mean higher rates and more economic pain, isn't it >> without a doubt there's probably some room between now and when we know exactly how aggressive the fed might respond. producer price index, which we got this morning, not typically the biggest market mover but simply fed into a developing story line that we are seeing perhaps some downside momentum
3:49 pm
in inflation clearly we don't know what level it might settle out at or any of the rest the fed will not love to see the market prematurely celebrate we're up 14% from the lows you're still short of those levels we reached back in august when there was excitement about a fed pivot. you have seen semiconductors come back nicely industrials lead there's a sense the economy is holding together okay. whether that's good or bad for the fed outlook remains to be seen credit is cooperating. for now, it's a comfortable spot even though, you know, you can't necessarily call anything like, you know, including the up side. >> and we had the rally in bonds which is also constructive for stocks to see lower yields dollar is weaker that's helpful 37.85 is the yield on the ten-year take a look at the china etf, up 10% or so, extending its winning streak to a fourth day in a row on signs china's covid policy
3:50 pm
could relax. we've got ten cent music, alibaba among the biggest winners. seema mody joins us, do investors believe this bounce is sustainable. it's time to be buying after these stocks have sold off on a number of factors, including covid over the last year, so >> well, sara, what is clear is there are positive developments over the last 48 hours first, calling that meeting between china's leader, xi jinping, and president biden a modest success, and then you had china also stepping in to prop up its real estate sector, plus some evidence of beijing starting to relax its covid policies for the first time in two years, bank of america turning tactively constructive on china, which strategists say will help energy, industry, consumer stocks in china. what's interesting is that the latest 13 f filings show that hedge funds have been reducing their exposure
3:51 pm
trimming position by 20% david tepper reducing alibaba stake by 10% these are filings that ended on september 30th their position may have changed. the take away is they still need more evidence of this china reopening to call this a turn around but clearly hard to overlook these big moves we're seeing today, sara. >> and there are geopolitical concerns i know we had talks between biden and xi that's a good thing, but where that relationship is going, ultimately, how xi jinping is going to proceed with the regulation of the tech sectors and others, and these companies are being delisted in the u.s there's a long list of concerns around china still besides what's happening with covid? >> a laundry list of these longer term challenges one of the reasons they decided to halt new investments in china is because of the risk of a
3:52 pm
taiwan invasion. yesterday in the meeting between president biden and xi jinping, biden's take away was that the invasion does not seem imminent. that was seen as a positive takeaway overall, clearly longer term risks including the possible delisting of alibaba, some of the other companies. we haven't seen developments on that front investors seem to be focused on the near term cause of developments, and that's sending shares of alibaba up 25% this month, the best month in six years. >> wow >> seema, thank you. tesla is higher today after moving up four spots in consumer reports latest reliability rankings morgan stanley's adam jonas said any weakness results in negative sentiment of elon musk's purchase of twitter could create a buying opportunity for shares. tesla did move up on the reliability rankings, which i know you keep track of how much does this survey
3:53 pm
matter >> i don't think a whole lot it really doesn't hurt tesla, sara when you take a look at the potential impact for years we have seen the reliability reports, whether from jd power, consumer reports, other auto magazines and industry news letters. almost all the time, we see the reliability of tesla is not dp great. it is incredibly popular it has more production of evs and availability of evs than any auto maker in the u.s. it is going to have a huge impact on demand. >> what about jonas saying buying opportunity off twitter with tesla who is running tesla when elon musk is consumed with twitter? >> he's still running it he has a strong bench. i think it's a mistake to assume that just because he's consumed or appears to be consumed with twitter, there's nobody minding the shop if you will at tesla.
3:54 pm
look, does he go through his bench? has he gone through his bench quite a bit at tesla over the years? you bet. but he always has had a number of people who have moved up and assumed leadership positions within the company who are strong performers and there's no indication at this point that he's dropped the ball at tesla it's a fear that people have, but there's no indication that's actually happened at this point. >> right because you can monitor in realtime he's tweeting 24 hours a day i understand that view, phil mike, how about you on the stock. it's down now 45% year to date about 51% off its highs. where has that brought tesla to? >> it's interesting. you can see it trade in line with the general sense of concern, either, a, that musk was, for a while, thought to be continuing to sell the stock that obviously was leaning on, and the sort of, having the sort of absorption in twitter in a lot of the details of what's going on at that company, completely out in the public,
3:55 pm
perhaps zapped some confidence in tesla, using engineers from that company on the other hand, if i look at a year-to-date charge against nvidia, they are in line with each other, on total losses, it's sort of traded along with a lot of the other very highly valued crowded names people own the high octane versions of this i get the concerns it's very hard to figure out what is filtering into the recent bout of weakness in tesla, which has made a two-year round trip from the late 2020 burst hire. >> got it. phil lebeau, thank you. we'll turn to the broader market with a few minutes to go in the session lori calvasina is with us. what is the strategy now that we're starting to see inflation numbers coming in a bit better >> look, i think at this point in time it makes sense for investors to think about recovery trades. that's the big fear in the markets. if you think a recession is
3:56 pm
coming, the deeper the recession, the longer it will go, and i think at this point even though it's premature to say all tear, and we know there's more tightening coming, i think investors have as much defensive positioning as they need at this point in time, we've got a little bit of relief in markets, it's well deserved, and i think it's time to start looking at small caps, tech, financials things that typically do well in a recovery trade in the market i'm not saying abandon your defenses, things are going to be choppy for a while that's the work investors need to start thinking about doing. >> a recovery trade. some say we haven't fully price instead a recession, lori, as far as earnings and the economy with all the tightening that we have, and still more coming. >> so, look, i think that we're in a period, it's a messy, long, normalization process. this is something we saw in 2022, 2023 we saw it in 2010, and 2011 where it took a while to cement the bottom we've got to see earnings
3:57 pm
expectations come down it's important to keep in mind that typically stocks bottom three to six months before earnings estimate revisions stop going down so i will tell you, frankly, every buy cider knows it's too high we have the bottoming process well underway at this point. >> what about tech because i don't hear a lot of calls to buy tech even though that are looking for a recovery. say stick with value stick with cyclical stocks tech is undergoing sort of a long-term process where it's being reset by higher interest rates, built up all of this capacity during covid. what in tech do you like since it is so out of consensus now? >> you have to define what you mean by tech semi, software, i.t. services, hardware, i am actually overweight the technology sec tor is a longer term play
3:58 pm
technology itself has to be very high quality, again, is typically a rebound play coming out of the recession, and semiconductors no one is taking numbers. typically the rate of upward revisions and semiconductors is coming down at historical lows that's a good buy signal you can look at some of those areas where the earnings sentiment is pretty much at rock bottom and poke around. >> lori calvasina appreciate you joining us with the call from rbc on the recovery trade. two minutes to go in the trading day. speaking of, 52-week high for ibm. haven't seen levels like this since february 2020. what are you seeing in the market internals >> pretty strong even though we did get the little fade in the middle of the day, recovered most of it. it's about 3-1, advance to go declining volume small caps out performing. the equal weight indexes outperforming the market cap weighted one it shows you a broad lift we're getting. take a look at the euro zone, equity etf. that's a five-day
3:59 pm
chart. recovered about half of it it kind of shows you trading with the headlines, unconfirmed out of the missile landing take a look at the volatility index. also did get a pop above 25 briefly but has receded from there. still kind of very very slowly and grudgingly coming off the mid 30s level, and settling in the 24s. equities might have to get over the 200-day average to get it truly relaxed. dow is up 35 points. going negative a few moments ago. lost most of the rally in reaction to the inflation we got earlier this morning wholesale inflation coming in a little better or under expectations biggest contributor to the dow gains would be walmart, adding 60 points. rose 8.2%. the company raised guidance and also added a $20 billion buy back authorization s&p 500 is up about 8/10 of 1%
4:00 pm
you've got two sectors lower in the close here health care, materials, everybody else is having a pretty decent day. the best performing sector is communication services along with real estate and technology. the nasdaq rises 1.4%. we are now positive on the nasdaq for the week. only tuesday the s&p 500 goes out with a gain of 1%. that's it for me on "closing bell," see you tomorrow. it's "over time" with scott wapner. in just a little bit i'll speak to bitcoin, anthony p pompliano. and we're also watching reports of course from europe about those russian rockets landing in poland all of it only under scoring the risks that still lie within this market an

72 Views

info Stream Only

Uploaded by TV Archive on