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tv   The Exchange  CNBC  November 22, 2022 1:00pm-2:00pm EST

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talking about kinder morgan. >> i've got some sad news for you. no, i can't. that's too mean. that's too mean. >> you disinvited me yesterday and then you reinvite med after the show what's your final trade? >> i can't own this, because i have too much in this category, but this is breaking out, restaurant brands international, qsr, it's burger king and popeye's, new ceo. >> yum thank you. i'll see you in overtime "the exchange" is now. well, i've got to disagree with scott, because i think natural gas is a perfectly appropriate topic after the thanksgiving dinner, dom, don't you? welcome to the schexchange, everybody. i'm brian sullivan happy anniversary, by the way. stock's up today we are one year for the nasdaq's all-time high. the question is, what comes next well, up next maybe a diesel disaster a shortage of arguably the world's most critical fuel is sending tanks nearly empty and pricing higher we're going to hear from some saying it could be $100 billion hit to the american economy.
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and as the crypto universe crumble around it, will coin base thsurvive and maybe even thrive we'll have a bull/bear debate on one of the hottest debates out there, that is crypto. g >> let's go to dom chu >> i am happy because the niners had a nice blowout win against the cardinals yesterday, but i'm happy for a lot of folks out there who are catching a little bit of a bid today we are seeing some fractional gains in the market. and kind of tilting towards the higher levels of the session so far today. the dow industrials, 33,972. it's up 275 points three quarters of 1% gain there. similar percentage gains for the nasdaq or rather, the s&p 500, 3980 so still trying to get back towards that 4,000 level up 30 handles right now. the nasdaq composite, up 60 points 11,085, the laggard, if you want to call it that, only up about
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one-half of 1% but again, fractional gains. one other place to keep an eye on is whether or not there is sentiment in technology that could foretell us, at least a little bit, about a nice move higher so far, there are three parts of the overall tech industry, the tech sector that are still not showing some real signs of life. sentiment wise, we're still seeing some negativity floating around the year's lows for cloud commuting stocks this particular etf is down 41% on the year. the fintech etf is now down about 50/51% on the year and the dow jones internet etf, big internet, commerce, communications-type names, down about 45% on the year. i put up the chart on a year-to-date basis to show you the medium to longer-term downtrend that we've seen, and we're still kind of hovering near those lows of the year for cloud commuting, fintech, and internet-related stocks. so maybe not just yet, the all-clear for a bounce off the lows we'll see what that sentiment gauge says in the coming days and weeks. and then, if you're looking for
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that retail story today, the best performing stock in the s&p 500 is best buy, up about 12% right now. and dick's sporting goods also up decently here, although not a part of that big s&p 500 trade both of these retailers came out with better than expected results, profits and revenues also raised this guidance. in best buy's case, they affirmed their fourth quarter seasonal guidance. that's the reason for the bullishness. dollar tree also beat and comparable store sales were better but they also guided, to the lower end of their previously stated range, so even though it was an outlook and it was a better than expected report, those shares are down about 9% r right now. it tells you that mixed picture that we're seeing in retail right now is played out through the latter half of this earnings season no exception today, but best buy, dick's, some of those big green spots you can see in that retail trade today i'll send things back over you >> we'll let you go so you can get in line for that 95" flat
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panel. despite today's gains, your next guest says the economic picture will stay rather murky until global inflation settles down. and in his opinion, that is still years away that also doesn't mean that market opportunities do not exist. let's welcome back in andreas garcia amaya, he is the ceo and founder of zoe financial good to have you back on again inflation here is starting to come down. we know that around the world, yuck, particularly europe. it seems to be actually accelerating what's your global macro view right now? >> i think if you look at it, i think the stock market is trading on hope. hope that the federal reserve will at some point in the near future call it quits and say, you know, we hiked enough. inflation is coming down but the reality of it is that once you get inflation above 6%, this actually was done by -- worked by research affiliates, it takesabout 7 1/2 years to
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get back to 3% now, i'm not saying it's going to take 7 1/2 years. the fed is hiking interest rates at a very rapid pace, so it might take shorter than that but this idea of like, you know what, at some point early next year, we're out of the woods, i think that's a little optimistic >> this has been a bizarre year, for a lot of reasons, but from a financial perspective, it's one of the few years we've ever had where stocks and government bonds have both gone down. normally, stocks go down, people buy government bonds, government bonds go down, people buy stocks not this year. the diversified portfolio we hear about in every commercial has not worked will it go back to working >> well, if you look at the usual environment in which that 60 and 40 worked, which was a low volatility inflation world,
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low volatility gdp world, and a world where the fed could always lower interest rates to make it all be okay, is not here anymore. so, from that perspective, i think you do need to diversity more than you used to into commodities, right into tips, and you basically need to have inflation-sensitive asset classes, because to your point, you know, bonds didn't act as a defender, as a shield this year. >> yeah, they haven't. and stocks haven't either, although we've had a nice little run lately to what do you ascribe this recent little run that we've had? is it seasonality? that hope strategy and we know that hope is not a strategy with the weather or with stocks, the hope of this fantastical fed pivotal. >> yeah, look, i think positioning has something to do w with it, right you saw that huge pop after the inflation number came in better than expected for october.
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so i think a lot of people were pricing for it to get worse, but once you look far out, you know, six months out, a year out, that positioning is not as important as the fundamentals. and from a fundamental standpoint, i don't see a world in the next year or two where inflation or gdp is going to go back to the world where there's a lot more certainty around those numbers. >> well, listen, we look at the world and, you know, i don't want to be like some sort of -- have an eagle on my shoulder, eating a hot dog, watching baseball by the way, go usa and world cup, disappointing tie versus wales yesterday. that said, america looks pretty good, respective to the world in terms of inflation, does it not? particularly europe. yeah, they've got gas and storage, but they paid nine times this year what they paid last year. that's going to trickle through. do we want to stay focused good
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old u.s. of a. >> i think it's a good question. i think in the short-term, the safety of the u.s. which is a trade that has worked for years versus rest of the world, does seem kind of cozy, right but if you look three, four, five years out, and going back to what i mentioned earlier around kind of investment trading on hope, the difference here versus stocks abroad is valuation, right there's a huge spread in valuation. even more than usual versus european stocks, as well as emerging market stocks and you throw in the fact that the dollar has been on a tear for more than seven, eight years. it does paint a picture where you actually get more value there than here. obviously, it doesn't mean just own international stocks, but most americans don't own any, right? having some exposure could actually help your overall portfolio. >> andres garcia, aamaya, appreciate you coming on, global macro view have a great thanksgiving, andres thank you. all right. we don't talk about seven-year notes very much, but let's do it rick santelli is at the cme.
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i'm not even sure that i was aware that there were seven-year notes. >> well, you know what, neither were investors and it doesn't really matter the maturity because the dynamic is the same whether we're looking at a two-year, five-year, seven-year, ten-year, 20-year, 30-year, the auctions aren't doing well, and this is a case study in how well they are not going 35 million seven-year notes, sully, so we had 2s, we had 5s, now we had 7s, total package, $120 billion they moved it along because of the holidays the great dog mind is d-minus. it was trading around 3.86%. the auction ultimately went off at 3.89% those three basis points are not good, okay they call that tailing and just one basis points tail isn't good when you get three, that is very much not good. none of the metrics were very stellar. the one that really shot out was 21.7% for dealers.
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12% is the ten-auction average takedown the more dealers take, the less investors take and i think if you look at these charts, pretty much many are now in my camp that the high-yield closes for the longer mature 'tis, sevens on, are probably already locked in concrete back to you. >> rick, unfortunately, i think your feed went about as well as that auction, apparently rick, we'll get you back on soon thank you very much. all right, now to the saga that has taken the crypto world by storm the ftx bankruptcy hearing kicking off today. and it is fair to say it is getting weirder, it is getting darker, and it is getting more complex by the day eamon javers is at the proceedings in wilmington, delaware, joining us now with some headlines eamon, i don't even know where to start take it away and we'll go from there. >> brian, i just talked to john wray, the ftx new ceo stepping in for sam bankman-fried, who of course has left the company now. ray said he's not going to be able to have any comments during
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the course of this proceeding, but his attorney did appear before this court today, saying a number of things about the company, including, he called this probably one of the most abrupt and difficult collapses in the history of corporate america. he said the emperor had no clothes, in terms of the management in ftx we learned a couple of new things here today. one is that the company is grappling with cybersecurity concerns here, cyber attacks against the company, they said, are ongoing. they said, substantial assets from the company are now missing and they don't know where those assets are the account holder attorneys here stepped up to argue against publishing the names of the individual customers of ftx. we had a dispute here between the u.s. trustee and the company. the company does not want those names made public. the company argues, in fact, that those names represent an asset of value to the company itself that could be sold later for a lot of money and there are privacy concerns
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here the u.s. trustees stepped up and argued, well, wait a second, we have transparency in bankruptcy proceedings in the united states, we want those names to be public at least as much as we can. at this point, the judge has stepped in and ruled in favorite of the company here. so the names of the ftx customers will not be made public anytime soon. he said that's on an interim basis. they may revisit that decision, brian. a dispute over exactly how much information the public is going to get out of this bankruptcy proceeding so far, the answer is, not much in terms of those names, brian back over to you >> i'm not sure that i've seen a bankruptcy hearing where they've redacted the namesof the creditors like this one before i thought it might have something to do with law in the bahamas. apparently, it's not in those headlines, though, eamon, also, in the filing, ftx's attorney also said that revealing those names could destabilize, their word, not mine, the crypto markets so, in a way, they're kind of
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arguing that this is also potentially, at least for crypto, a systemic event >> yeah, well one of the things that they're arguing here is that people invest in crypto in the first place, for privacy reasons. and it's unfair to those customers to then go ahead and name them in the proceedings here in court in delaware. the u.s. trustee didn't buy that argument at all. he said, we want as much information basically as we can get, on who these people are and that should be out, at least in terms of the institutional holders here, if not the individual addresses of individual customers for cyber privacy reasons. the other concern here, brian, is an interesting one. because you've got european digital privacy law, which really blocks the release of a lot of that information. and u.s. privacy law doesn't and so one of the things that the ftx attorneys were arguing was that it's unfair to the american crypto holders, to name them, but not to name the europeans who are protected by that digital privacy law they said that creates two tiers
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of customers in terms of privacy. and all of those people are at risk for cyber attack, if their information is made public so a lot of concerns here. the judge said there's a real tug here back and forth between privacy and transparency for now, he has sided on the side of privacy. >> and apparently, they've amassed -- and i know you've got to go very quickly, amassed quite the real estate portfolio, including a $16 million home purchased for his parents. both of whom, by the way, are law professors >> reporter: we are learning a lot here about the real estate assets held in the bahamas by this company a number of those homes the company has said were purchased for the use of company officials. the question is, you know, who was using those homes, what were they using them for, and what's going to be the disposition of those assets so, at some point, we might see a fire s.e.ale of real estate i the bahamas, brian if you want to get in line for that one, there's a long line of folks here wanting assets from ftx here in delaware
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>> i have a feeling that the only winners are going to be the bankruptcy attorneys themselves. what a web this is >> a lot of them here on site. >> that's it, eamon javers in wilmington, delaware thank you. all right, speaking of crypto, have you seen a chart of coin base's stock lately the market cap was down $70 billion in a year, but one analyst says, it's time to buy the dip. and at least one big investor is we'll tell you who and debate coin base, coming up but first, it is not high pee person hyperbole to say that we might be on the verge of a diesel disaster. we will explain on the exchange, he said, next. at humana we believe your healthcare should evolve with you and part of that evolution means choosing the right medicare plan for you. humana can help. with original
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all right. this story is not getting a lot of attention elsewhere, but it should and it's not just a business story. it could impact every aspect of the economy. it's a growing shortage of diesel fuel demand up, supply, down so down, in fact, that the cost to run homes, power machinery, everything diesel does becoming a bigger problem for many americans, and companies and one of your next guests says the higher prices could lead to a $100 billion hit just to the u.s. economy overseas in europe, things are just as bad, if not worse. dig in deeper to all sides
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mark finley is an energy fellow at rice institute baker of public policy. he just ran the numbers, along with someone who needs no introduction that is cnbc contributor, thalia croft. good to see you again. mark, you ran the numbers. tell us what you found, because we implied there was a shortage a couple of weeks ago. there is a real issue here >> there is a real issue inventories, for this time of year, are the lowest they've been in memory, and there may not be physical shortages, but that's because the price has gone up so dramatically. and and whether you trade off physical availability for a higher price, you know, the impact is still the same and as you mentioned, it's, you know, looking at u.s. consumers footing a bill for an extra $100 billion this year, just for diesel fuel. >> that's it, halima and we're competing in new england, i don't know if you're
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up there in rhode island you travel every day, is who knows where you are. if you have heating oil, i'm sorry. what's going on? >> i mean, this is a huge challenge, particularly for the east coast of the united states. well it's where all the products are in really short supply and this is going to be a big challenge when we go to the european sanctions in february, europe is going to basically go to zero in terms of imports of russian products. we now have europe essentially bidding against the u.s. east coast for a refined products and if we have a very cold winter, this competition could send prices much higher. and so that will be a really pronounced problem come winter and again, it's a problem with competition right now between the u.s. east coast and europe for their fine products. >> back to you, halima, before we go back to mark, do you think we could get a ban, temporary or whatever on refined products like diesel from the united states, being bandied about.
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in other words, you can't ship from houston to rotterdam. >> right now, the u.s. energy secretary is talking about sort of minimum inventory levels for the east coast, but the question is, do we go further in terms of refined products banned? you have certain members of congress calling iffor this now the real problem would be what this would due to europe europe has taken a very serious stance in terms of willingness to shut down the market for russian products into that continent. and if we basically ban u.s. exports, that's going to put our key allies in a very, very serious economic crisis. >> that's it, because they need this sort of gas to oil and diesel switching that we've talked about and mark, from an economic perspective, diesel, we don't even think about it unless you're a trucker or a train or whatever it is so critical. i mean, anecdotally, i just got some tree work done. my tree guy, who's a great guy, tacked on a surcharge for the diesel, and apologized, but i
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totally understand talk to us about the ripple impacts. not just if we don't have diesel, we'll probably have it, but man, the extra cost on everything >> that's exactly right. it's literally the extra cost of everything that moves is moved with diesel fuel and you know, we're staying at home, so maybe, you know, gasoline has been a huge issue already. we saw how big it was in the midterm elections. but with more people staying home, everyone is ordering, so the need for stuff to get moved around is if anything even greater than it was before and literally, diesel is in all of that. >> mark, one more to you what is the reason for this? is it only the war in ukraine? that's what we hear, but is that the only reason? >> in normal times, the only thing you need to worry about is
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what's changing with the price of crude oil this is not normal times there are a variety of factors as halima mentioned, russia is a significant exporter of not only crude oil, but diesel fuel as well earlier this year, china put export restrictions on its refineries but also we've seen in addition to the strong demand that you mentioned earlier, brian, it's the number of refineries have closed in the u.s. and in europe after the pandemic, so refining has been tight and on top of that, you have the russia and the china stories >> we've also got the war. it's played a tremendous and terrible impact and will more so next year than this year but when we're down by 50% from our refining capacity in the northeast and new england from ten years ago, what do we expect is going to happen
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>> one of the things we should be really concerned about issprg capacity what are the tools that policy makers have to alleviate these shortages. if we go into a really, really cold winter, that's going to have huge impacts for consumers, particularly sitting in places like i am in rhode island. >> that's it and apparently you guys used to work together. it's good to have you back on, as well. it's a good pairing. mark and halima, thank you very much halima, see you in vienna. have a great thanksgiving. still ahead, are you p panicking yet? just 32 days until christmas there is one big question facing everywhere can the shippers get you your gifts on-time? we'll get a live look. frank collins is down in atlanta at a maj u.sor.p. hub. we'll find out if you're going to get your goods. with billionss taking millions of trips every year? you aren't about to let any cyberattacks slow you down. so you partner with ibm
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all right, welcome back to the schexchange, everybody. a lot of green on the screen right now. stocks are at session highs across the board dow is up 317. that's almost 1% nasdaq about the same. it's a little holiday rally we had, just continuing on. feels kind of good, doesn't it here's some of the movers at this hour. fly, eagle, fly. american eagle soaring on the back of its strong numbers american eagle up 17%. on the flip side, medtronic on pace to close at its lowest level since march of 2020, after revenue missed expectations. the company provided a rather down-beat full-year outlook citing weakness in procedure volume just medical procedures. look at zoom zoom getting hit hard today. not as hard as it was. down about 4% right now.
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profit did top estimates, but their guidance for revenue in the current quarter fell short of estimates that stock down 60% this year. i know a lot of people still zoom, but a lot fewer than were. and here's some more beautiful market music shares of warner music, they were soaring after posting a rise in profit and revenue and growing streamings, music revenue, also growing, whatever i just said. warner music, wmg is up 14.5% right now. all right. there are some stocks that are on the move for you. let's get a cnbc news update with tyler mathisen. >> brian, thank you very much. here's what's happening at this hour the first real-world data on updated covid boosters show they do work better at preventing infections than the original vaccines did the cdc says the results are based on tests of more than 360,000 adults the driver of an suv that crashed into an apple store in boston has been charged with reckless homicide.
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one person died and 63 others were injured he has pleaded not guilty saying that his foot got stuck on the accelerator as his vehicle sped into the store and a new poll showing a virtual dead heat in the runoff election for georgia's senate seat voters asked by aarp favored democrat raphael warnock over republican herschel walker, but that is within the poll's margin of error warnock leads among voters over 50 and women of all ages, walker more popular among older georgians. perhaps those who remember him from his football days at georgia and beyond >> we kind of learned a lot about polls the last couple of elections, as well we'll take it with a grain of salt tyler, thank you on deck, it's a coin-based clash. is it safe to play the crypto-based stock right now we're going to debate coin base with those two fine gentlemen,
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all right. welcome back to "the exchange. coinbase shares getting whacked as the falloutfrom ftx and others rocks the crypto world.
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you have needham andbarclays cutting their price targets, but also remaining generally positive on the stock. and kathy woods' arc invest has bought more than a million shares since the beginning of november but with crypto lender genesis reaching out to big investors to raise capital and everything else going on, the future of everything in crypto seems not super clear right now. and sometimes, maybe it's just darkest right before dawn, right? so let's talk both sides of the coinbase, taking the bullish side is chris brentler, senior equity analyst at d.a. davidson. he apparently liked that dad joke for the bulls, senior analyst at missoulu holdings. what is the bear case for coinbase >> so there will be winners. this is the darkest before dawn
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type of stuff makes a lot of sense. it's a very stressful time for the industry we have probably more shoes to drop we believe the coi given it's sort of mission, the way the company has been run for the last decade is going to avert the disasters that are following many of its competitors and come out a winner crypto is not going away we believe in the long-term value of what technology can do for financial services >> and dan, you're not a complete hater, right? you've got a hold. it's not like it's a super cell rating what's your take on coin base and its prospects right now? >> i think the prospects are pretty grim. all you have to do is read the 10q. in the third quarter, they made $590 million revenue and $1.2 billion of expenses, with over $2 billion, $3 billion of leverage they're burning cash i mean, this thing doesn't look good investors, retail investors are fleeing crypto they're not coming back. i don't know what's to like
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about this one >> well, chris, how would you respond? >> probability is improving. i think the gap numbers can be a little bit distorted sometimes and adjusted ebitda, they're down to $150 million loss. the interest income has been a nice offset. i think interest income is an unknown wrinkle when it comes to coinbase they have a significant interest in circles so with rates going up, we see a big tail wind from interest income that will dilute the reliance on trading volume and, you know, i certainly agree that re retail investors will be pulling back we had thought they had gone away forever and came back bigger than ever, probably too big. i don't think that this is necessarily going away and coin base is built to survive >> dan, do you think it will -- in five years, will there be a coin base, as an independent stock? >> there is a percent chance, which is not zero, that that's
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not going to happen. and if you want interest income, own a bank, not coin base. the reason they're getting interest income is because their not paying people's deposits as much as they should be getting if you want something with interest income, go on sofi. much better plan at least according to my view, that's not the right way to think about it >> chris >> totally disagree. i think it's a nice, you know, sort of added revenue stream people aren't putting their money on coin base for earned interest income. i would rather be exposed to coin base here than be a consumer lender like sofi, given the stress to lenders and what's going on in the economy. so everything has its angle, and you know, coinbase, obviously, it's not a bank. it's going to be the leading trading platform what's happened in the world in the last couple of weeks, we've learned that putting your crypto in an offshore exchange is not
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regulated. expect coin base to gain significant share as the fallout continues. >> chris, do you have any liquidity concerns at all with coinbase, given what genesis has said, what we've already seen this year with voyage. i know they're not the same companies, i get it. but investors sometimes hit sell now and think about it later >> absolutely. and look at the way the bonds have traded. they're trading like there is some material liquidity risk here and you can't say for sure we don't know how deep this thing goes and a lot of companies in the crypto world tend to be very closely tied together. i think it's a huge feather in their cap to coinbase that they've avoided the significant issues so far, but you never can be too sure. it's really a high-risk position with a lot of upside if they get this right is our view here. >> do we need new management there, dan would that matter? >> i don't think so. i don't think the management actually matters i think the category in which they -- i think, actually, what we've learned in the last few weeks is that crypto could be
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worth something and it could be worth zero and this could happen overnight. i think the same thing could happen for everything that's traded on coin base, including bitcoin. i don't think the management matters, although, i would say, i don't see it in a very positive light that the ceo is selling shares at these lows it doesn't bode very well for sentiment in my view >> it's a very hotly debated stock. it's passionate and good arguments on both sides. dan and chris, appreciate you both, gentlemen. have a good thanksgiving check out this mystery chart. it is up 22% so far this year. they report their numbers tomorrow i honestly have no idea who it is robots, apparently, are one of the key factors to watch, i'm told we'll figure that one out, reveal the mystery chart, coming up
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. all right. i just learned the mystery chart and so you're going to learn it like ten seconds after me. it is deere, formerly known as john deere there are a few potential
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headwinds on the horizon they report their numbers tomorrow seema mody joining us now with some of the key language to watch. what is happening down there in moline, illinois >> there is no question that john deere, brian, is the standout this year this chart, as you were just showing, up 20% in 2022 compared to the industrial sector, which is down 5% year-to-date. a surge in crop prices fueling the rally. and yes, we, it's off its multi-year high hit back in april, but farmers can lock in pricing at any time. which means more money they can use to buy big machinery right now, equipment sales anticipated to rise by $13.4 billion in the fourth quarter. jpmorgan expecting sales to come in right below that at 13.1. a slight miss and that is due to the ongoing supply chain constraints, as well as higher info costs that was a clear concern for deere's competitors, agco, oshkosh, both of which reported earlier this month softer demand for smaller tractors was also cited after the big run-up we saw during the pandemic more importantly than the fourth quarter numbers are going to be
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the 2023 guidance that we get from john deere. do we expect a recession, brian? you know, what are they seeing on the economic front for farmers? are they feeling confident farmer sentiment is heavily tied to how much they are willing to spend on tractors and precision technology >> i was out there in davenport and i drove out there. there's some cool stuff they're doing, right robots, drones it's not just the combines that we've got in the giant monitor behind your head >> john deere's aggressive spend on innovation, including robots and ai, what they're trying to do to make farmers feel more efficient when they're out on the farm, it's one of the reasons that they outspend all of their peers on r&d. about $2 billion per year. so much more than adco and ch. however, going into an economy that could be softening, will john may stick to that aggressive spending plan he is expected to receive pushback on the call tomorrow starting at 10:00 a.m.
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>> i understand the drones the farmers used to go in the films, now you just kick back, let the drones film the crops for you. what do the robots do? >> robots mean fully autonomous tractors >> you can literally just sit and it does the work to you? >> they're adding so much technology to these farms across america to ensure each farmer can bring back more crop per yield, that's allowing them to be more efficient, helping with sales, but it's a big investment a combine can be $1 million per device it's very expensive, however, thebenefits could outweigh the costs, that's the hope, at least. >> we just did a segment on diesel fuel, i don't know a lot about farming, but i know those things take a fuel >> they do they very much do. that's why batteries is one way that john deere is hoping to get around it. >> powered by corn, aka, ethanol. john deere's numbers tomorrow. we have heard from a lot of stock pickers that america is the place to be right now, but up next, a bond strategist will
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all right. welcome back to "the exchange.
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you might have heard about this. but the federal reserve has raised rates by 3.25% so far this year. there's still one decision, maybe two on the table that has helped propel bond yields to multi-decade highs two-year yields began the year below 1% they're now at 4.5%. 70 basis points higher than the ten-year yield that's your inversion. your next guest thinks that we'll be stuck in this range for a while and says that quality is the name of the game joining us now, where he is buying is brian weinstein. he is head of fixed income at morgan stanley investment management brian, thanks for joining us bonds have suddenly become attractive to a lot of people, but does that mean treasuries or does that mean high-grade investment bonds or does that mean yes to both of them >> i guess the very simple answer is "yes." yes, it's very exciting. fixed income is attractive, it's in the game. it's an asset alternative, where it hasn't been in a while. i think treasuries are a fine place to start, but there's no reason to stop there great yields on municipal bonds,
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select emerging markets, credit markets are -- have cheapened a lot, too but treasuries are a great place to start, down 15 to 20% on the year, one of the biggest moves we've ever seen. >> and are we being compensated enough in other words, is the yield that i'm going to get from a high-grade investment bond, call it 6%, but i've got more probably move in the fed funds coming am i going to be compensated right now enough to make up for that spread if it moves? >> i think so. if you look at the inversion and what's coming, we'll have slower growth, slower inflation it's going to be sticky. the fed will be forced to keep rates higher than they want for longer, which means a bigger slowdown, lower long-term interest rates i think you're in the middle of a bond rally, so that 6% you're going to get, you can get some duration call. call it another 3 to 4% and that doesn't have a big risk of default. yes, that 6% inflation rally is a pretty good return versus
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other alternatives >> are you getting a lot of questions from clients that are eyeballing some of these highhi high-junk things that are yielding 9 to 10%, it looks juicy. >> and there's been so much shock in the markets this year, having the worst year ever in fixed income, a lot of investors are still a little shocked so you get those falls should i buy things that are juicier, riskier, get into double digits. the answer is, eventually. there are certainly some things that you can buy out there that are attractive but i think the securities, 6.5 to 7%. it's really hard to convince me that you need to extend out the risk curve when low-risk stuff is as cheap as it is >> and would you dive into the high, high-yield sort of, you know, highest quality junk market right now would you do it? >> and it's funny, people have that's the one place in high yield where people have
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continued to jump in they may be splitting hairs. i think that stuff has great yield, i think it's attractive in a slowdown, if treasures rally, you'll get your income, maybe not a lot more it wouldn't be my first choice, but spring in some things with more yield, you have have an attractive portfolio that could compete with equity markets out there. >> this may be wonky, don't want to put you on a spot, but i have a buddy who is more successful than i am. he bought two-year treasuriesget is state income tax free he was nearly dancing around the room. >> i think if you want real tax-free, the bond market has a ton of opportunities in the 5% to 7% adjusted range treasuries to me, listen, we were 4.5% tender notes a few weeks ago. i think we're going to 3.75% two-year notes give good income. depends how safe you want to be.
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i do think bonds for the first time in a long time give you both income and a chance for appreciation that they'll be around a little while, but probably not too listening >> brian weinstein, good look there at fixed income. really a topsy-turvy year in so many ways, brian finally, your team is getting some love. that's good news >> it's good good to be discussed, for sure back in the mix. >> boring is the new sexy, baby. brian, thank you. >> we're back. today on "closing bell," don't miss mario gabelli of gamco. get his take on disney and the breaking up and much more. the always entertaining mario gabelli. ahead, shippers gearing up for a holiday season, but could inflation actually impact your shipments? frank holland has that story from the ups smart hub in atlanta. frank. >> we're in ups's second biggest facility in the u.s., where they process 100,000 packages just like these per hour. we'll look at the holiday peak
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welcome back the national retail federation predicting double digit e-commerce sales growth again this holiday kind of every year now, right? the shippers may be seeing a different picture. frank holland is at the ups smart hub in atlanta where some fear it may be a ho-hum or a humbug holiday frank? >> remains to be seen, brian 90 million packages per day is the latest forecast from data firm ship matrix for e-commerce. would be flat year over year as you mentioned, we're at the ups smart hub, where they use a combination of automation and human workers to get packages out. they say they're ready for any surge that may come up so the question is, where is that surge going to come from? as i mentioned, the forecast is flat over the last couple years
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during the pandemic, ups and fe fedex, they've counted on surcharges for big retail customer shipping above holiday volumes to boost bottom lines. another question for the holiday peak is on-time delivery ups and fedex are sweating assets and reducing capacity to cut costs. any time that you have a slowdown in on-time delivery, that directly hits margin. the last six weeks, ups at 97% anything over 95%, that's good the company says it's still on pace to hire 100,000 holiday workers. they say, in some markets, they have to pay them more. another question of margin the story for this holiday peak may be over capacity 20% more capacity available than is actually needed this holiday season with the u.s. postal service ramping up its capacity. that's allowing new e-commerce grant entrants to enter the space. quiet logistics, subsidiary of american eagle i spoke to ups and fedex they're not as worried about the new entrants because they're
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focused on quality, not quantity something to watch for the holiday peak back to you. >> frank, i know it is loud, but no one has been accused me of having trouble hearing me. hope you can hear the questions. an interesting one, if i ship something to you, i'm in new jersey and i ship something to l philly, right? you're visiting your family, and i want to send a box does it go through atlanta or louisville is that how everything routes? >> no, absolutely not, brian they certainly have stations and regional areas not every single thing goes to those two main hubs. you're referring to the main hub for ups in louisville and the main hub for fedex that's not quite how it works. certainly, when you're talking about air express delivery packages, many of them will go through the main hubs. another point that i think you're eluding to, will we see the same delays this holiday season it's not expected. it is expected to be a smoother holiday shipping season with not as much capacity needed by big retail customers that have top
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priority over a person like me and you, and just more capacity on the networks. the question is, potentially, on-time delivery with the companies cutting back on workers and capacity, and then their margins when it comes to earnings this quarter is their biggest when it comes to volume. the question is, will it be the most profitable? at least since the pandemic started with the different changes of people going to stores to shop more. >> you know, we kind of got to look behind you. you're in focus, as you should be, my man behind you, how big is this facility i'm kind of picturing this as a mile long. seriously, how big is it >> i'm going to step aside so you can get a good look at the work going on. this is a very big facility. i'd say it is about the size of six or seven football fields more importantly, as i mentioned at the top, they can process about 1,000 packages an hour if you look all the packages they can process throughout the course of a day, it'll be as tall as mt. everest. the size of the facility is not
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as important as the capabilities this is the most automated huh h hub in the united states takes a third of the workers it'd take in a facility somewhere else without the same automation behind me, that's a big part of the automation it is scanning packages. there are manual duties. a lot of automation, automated vehicles and sorting capabilities. >> drop to the ceo this idea, frank, because it looks fun. they should own a ride nearby. basically, you go on that, sit in a box, and that would be a business -- i don't know what the ceo would think, probably not. it looks like fun. it's like the log flume ride i want to ride it. frank holland, thank you, my man. good stuff all right. quick check on the markets at a couple things. we actually from a little time it's a miracle, right? all right. markets are up right now, 319 on the dow. seeing moves across the board. oil stocks doing really well today. in fact, the oih, an etf, we talk a lot on "fast money," it's
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up about 3% to 309 it was under 175 a year ago. this is interesting, best buy is the best performing stock in the s&p 500 today. dollar tree, the worst go figure. all ahead of black friday on friday that does it for us on "the exchange." "power lunch" starts right now great to be with you all today. nice to have your company. here's what's ahead. tesla tanks. the stock cut in half this year, trading below the median price target of wall street analysts what do the technicals say we'll look at the charts to determine the stock's next move. plus, getting defensive. money has been rotating into biotech. gilead up 20% over the last month. anagen, 13%. are investors hiding in biotech as the threat of a recession looms? we'll explore that one later this h


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