good afternoon and welcome to "power lunch. the market is taking a breather after yesterday's record rally we're awaiting the release of the beige book from the federal reserve any moment now it will give us a closer look at the economic recovery as it stood there back in early november plus, that recovery hanging on the hopes of a vaccine and

vaccine stocks are rallying after yesterday's selloff. pfizer, biontech gaining approval in the uk for their covid vaccine. how far behind is the u.s. a matter of days, weeks? we don't know. we'll bring you up to date. the billionaire wall street power player always provocative, mario gabelli will join us and why he's looking ahead to 2021 and where he's find, the best value with records near record highs. the stock picker's stock picker will join us as "power lunch" starts right now thank you, ty. i'm kelly evans. we are watching a split market the dow lower right now thanks especially to one stock in particular dom chu is looking at that for us. >> one of the newest entrants. that's why we're focused on the dow, the s&p and nasdaq. take a look at the dow is off

0.2, 54 points the s&p drifting slightly lower and the nasdaq composite off one-third of 1%. it's salesforce.com, on the heels of that big deal to acquire slack. those shares are taking down a big hit, down 9%, but about 125 points are coming off the dow just because of salesforce.com remember, it got added late this summer mcdonald's, by the way, one of the other ones, ticking 40 points off it's off 3% now. in no way is it launtied to the launch of the mcrib. it's coming back to the menu we can take a look at mcdonald's two dow components taking some luster away from the overall index. one place that is a bright spot within the dow, the only oil major that's left in the dow, and that's chevron

those shares up about 3% right now. you can see $89 mt..82 the last trade there. it's still one quarter, about 25% of its value has been shaved since the highs we saw just in the last year. again, on a year-to-date basis, off 25%. chevron, one of those big oil stories that's really starting to resonate in the market as the covid-19 vaccine plays out, as optimism returns about the overall economy. that's something to watch. and then let's go away a little from that chevron story to another play of optimism and that's happening with fedex. those shares up 1.25% today. being propelled to near record high levels at this stage right now because in part it's buying a huge e-commerce portal we're looking at what's happening with shop runner they'll take them over, undisclosed sum. what that will do, kelly, auto tyler, is to take a look at fedex, it will create a bigger

e-commerce presence by taking over that portal, it will allow them to grow that e-commerce presence they have fedex to the upside, 1.5%. back over to you >> dom, it's interesting, just -- i was going to say that salesforce hasn't done better today, continues to head to the lows we have to move along. we appreciate it let's get to steve liesman who has news from the fed on the beige book for us. steve? >> yeah, kelly, a certain darkness to this beige book. federal reserve characterize expansion as moderate, but four districts described little or no growth and five narratives noted activity remain below pre-pandemic for some sectors. there were several areas where manufacturing did well that was a good thing. delinquencies were expected to increase and most districts reported that the outlook remain positive that's good news however, optimism waned, it

says many contacts had concern over the recent pandemic wave unemployment, all districts reported employment rose but for the most part the pace was slow, it said. i think this is to be expected despite higher difficulties, it says firms raised rates for low-skilled workers. that's good news, especially in outlying areas this is the first initial beige book after the pandemic began to surge again. and i think what you're seeing here is, perhaps, what was expected some slowness in the economy, and we'll get a better report on that, i think, kelly, come friday with the jobs report. >> steve, thank you. steve liesman running through the headlines from the beige book let's get out to rick santelli in chicago looking at the reaction to what we've heard so far. >> kelly, let's lay the groundwork once again, though. this is the road map for the next fed meeting which happens to be december 15th and 16th of course, we know that the last

fed meeting was a bit mired because of elections and all the political issues and steve's exactly right. the more i see headlines flashing regarding the beige book, it's all about the utility function of growth versus need for stimulus that's going to be the underlying tone for the federal reserve and it really comes through. there's very little reaction in any of the markets because we all know this. the real question is when the vaccines make a difference, how the distribution goes and all those businesses we're worried about that are going to run out of cash, playing the clock, playing against the clock. if you look at two years, we're still at 16 basis points tens still at 94 up a basis moint 30s leading the way at 169, close to 170 up a couple basis points dollar index hovering down a quarter of a cent at fresh 31-month lows should it it close here with little volatility. nothing surprising but we continue to be nervous and i

think that's what the world will look like after vaccine distribution. >> steve, i'm going to bring you back into the conversation you began by saying that this beige book was a little darker than just beige. it feels like it has a burnt sienna tone to it. what makes you feel that way and, secondly, what if anything, does it say about the health of the american consumer and what the fed may be sensing there >> yeah. first of all, as people may remember, you and i have been punting on the beige book for many, many years now we have not yet run out of reasonable puns on this thing. the thing i thought was darker was the idea four districts of the 12 saw no growth at all and five said they remain below the pre-pandemic levels. that was the first thing the second thing was the possibility of the rise in -- the rise in delinquency rates

coming down the pike some eviction bans end at the end of this year finally, the issue of the second wave beginning to cause some concern in the outlook here. i am, though, on the other hand, seeing some positive stuff about retail i thought i would see more negative stuff about bricks and mortars but i'm searching the word retail. here's a summary from boston that says while brick and mortar saw gains from earlier in the year that's pretty good although tourism remained in the doldrums san francisco said retail was up appreciably. when we're trying to figure out the health of the economy in the fourth quarter, many people are focused on the holiday season as we see optimistic reports from the national retail federation, and a the lot of people on the day after christmas will lose their jobless benefits there's a tug of war going on in the economy so i'm focused on

any anecdotal information i can get about the christmas season. >> about benefits disappearing the day after christmas, are we, as i heard you suggest a moment ago, in one of these zones or grooves where the focus is going to be on washington and whether they can hammer out some kind of deal light -- delight, i guess you could call it -- before the end of the year on stimulus? >> oh, i think that's spot on. listen, there's nobody arguing with the notion that there's portion of america that are suffering. it's also pretty obvious that there's a lot of heat in the marketplace with respect to what stocks are doing, for example. it's going to be very difficult for the fed and the government to come up with needed stimulus in a timely enough fashion not to run into some of the heat that's going to come ultimately with the vaccination yes, my guess is we'll see something before christmas in

this lame duck as the president-elect has pointed out, that might get modified to a more aggressive stimulus package once he's sworn in with his new administration. >> rick and steve, we thank you very much. let's dig deeper into the state of the economy the markets and individual stocks with our power player and a legendary wall street investor, the always interesting and provocative mario gabelli, ceo of gamco investors it's great for you to be here. when we spoke last, or i heard you speak last at a cnbc event about a month or so ago, you were very optimistic, i thought, about 2021 are you still? >> yeah, rick, i added a lot of the dots we are thinking about, but let me go from my point of view the economy on a global basis is like $91 trillion. china is 18.1% and i think they're going to do extremely well and, particularly in the consumer sector. that's very positive

the united states is 25%, 24.1%. that's because -- in my judgment, the consumer, a long runway for housing, a long runway from the automobile sector and then i've seen some -- with the notion of a vaccine, tyler, that we're going to have travel and leisure come back. that will help boeing and their ecosystem. there are a lot of pluses. clearly what rick talked about is you need an element of support for a certain part of the population particularly if you're dealing in restaurants, if you're small businesses that has to be forthcoming it will be a great christmas present if the politicians can get their act together stepping back, we need an infrastructure bill. we had a conference on the vendors to boeing and airbus but we also had one with pump valley motors and the civil engineers come in and they pointed out that our bridges, 500,000 plus in the united states, 40% have

d-minus to d-plus ratings. we need inland waterway. we need bridges. finally, we hope to get some visibility with the current administration, the new administration coming in, and that's going to be very helpful to infrastructure and then we have to worry about the climate. wind, solar, battery storage, transmission a lot of pluses. clearly we need support for the working person who has not got a job on the short term with regard to leisure-related businesses >> anybody who has driven across the cross bronx expressway would agree with you, we need better infrastructure across the board, whether it's bridges or highways -- >> it's also the railroads and also transportation. it's a lot to be done. the one i did not mention was broadband. we have to do what they did in the 1930s when we did plain old

telephone service where we did utilities in rural america broadband is another area we need to put money in in infrastructure, and they're doing it now >> i was going to mention, utilities, water systems, power grids, broadband, all of that. we've been leap frogged, in many cases, by other countries who didn't have the sort of installed infrastructure we do so they had an advantage they could do that. you mentioned so many areas here across the economy in the short term as the economy comes back, it sounds like you're pointing to some sort of cyclical companies in the automobile -- you talk about automobile has a long way to run. construction, housing has a long way to run it sounds like you're suggesting that that's where you're finding some of the more exciting plays right now. am i understanding correctly >> yeah, there's no question that we looked at in the cyclical, i started my career 25 years ago as an analyst, so we

understand growth and we understand cyclicality basically, how bad is bad, how long is it going to be bad and how good is good example, there's a company in milwaukee we've been following that's gone from 20 to 20 to 100, 20 to 100 the stock was 20 the analysts were stirmenting 180 for a year and they came in $2.25. the stock is now 40. what will make it even $100 stock over the next two or three years? that's what we are trying to figure out the same thing with a lot of companies. so, let's look -- yesterday i called a company in richmond, virginia, called traffic i was the om one that called them after they announced they were paying out $5.95. why? nobody follows the company there are many unloved companies we like to focus on. our clients already own those. the other area they didn't talk about, tyler, is the whole notion of travel and leisure sports betting and sports are

coming back. when you have a vaccine, you're going to have a year from now football without all of these lockdowns. you're going to have basketball, betting on these things. what companies are doing what. you take a guy like barry, who makes a ton of money, buying mgm, and su kim, a broadcasting guy that took on a company called twin river chains, cut a deal with sinclair sinclair owns regional sports network. they're doing terrific a company in reno and brilliant and bought william hill and they're emerging in the u.s. and they have the infrastructure those type of things that catalyst, betting on sports, came about in part because of what happened with the supreme court in may of 2018 professional and analyst sports was thrown out you can now bet. that's a terrific new business that's going to unfold we get excited about these

things and we're focused on it with a microscope and with a telescope. what's going on short term that's what we do, tyler, every day. >> since you raised the sports betting thing, i think it's a fascinating area because i can well imagine that if you're a sports fan, as i am, and you're not able to go to the game, one way you can get more engaged in the game is to bet on draftkings or fan duel or william hill or whatever >> there's all sorts of things you can bet on i have to think the sports owners and the leagues, who are trying to find ways to replace lost refuse new that's going to be there throughout 2021 because there aren't going to be huge crowds until later in the year, at the very least. that could be a stream that they would like to tap in as well >> i think you stated it well.

not only that, they're going to renew the broadcast company so companies like viacom, sinclair owning the team, look what stevie cohen did with the mets, he paid $2 million you can buy a piece of the atlanta braves, which i like being a new york yankees fan, such is life the braves stock is selling at 24 you can buy the whole business for $125 billion a year from now john below will look at monetizing soccer, and in new york for those that have the challenge and the mental capacity to tolerate the knicks, madison square garden sports there's 24 million shares and the stock is 170 plus or minus and you're right and that is that in addition to me waiting around for the final two minutes, i can bet on it,

which means i'm going to stay longer, which means advertisers will pay more for the right to advertise so there's an ecosystem that will benefit a year from now. in 1919 all they had were masks and attending baseball games going forward, particularly in the spring of 2021 it's only 12 months out. >> we'll have you stick around and we'll talk a little more about this and other things. i should point out that my son, who is a big basketball fan, has said he is all in with the knicks this year he loves their first-round draft choice >> stop. just buy two shares, that's going to cost you 140 bucks, 340, buy it and give it to him as a christmas present. >> that's a great idea i'll have to figure out a way around our rules here to do that but we'll -- that's a good idea. we'll have you back in a minute. we'll take a look at the markets as the dow is down due to a salesforce hangover. that stock off 9% after it announced a deal to buy slack at

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that sounds dumb. no, santa, we're going to take all those family moments that make the holidays and package them. oh, you are getting so big! woahh! it's down to the wire, the team's been working around the clock. i'm not sure it's going to work. it'll work. i didn't know you were listening. hmm. (laughing) that works. welcome back to "power lunch. let's get back to our conversation with mario gabelli. mario, if i could, i wanted to kick things off about asking you about interest rates as we speak right now, the twos ten yield curves, we see

expectations coming back and mostly in a positive way we see the ten-year maybe about to punch up 1% how does that set us up for the investing landscape in 2021? >> great question. i'm glad you framed it so i can get another -- 2021 has a couple of pluses. one is the strength in the euro where a lot of american companies and s&p earnings come from that means their earnings are going to be worth more, particularly as they roll out of their pandemic the second plus is the -- i think inflation will pick up as we get through the year because of what's going on and wages rising and also the likelihood of some change in taxes that are going to be passed through but from your point of view, the headwinds are also fairly obvious. one is as the interest rates rise, as i expect they will in the second half of janet yellen holds their own and get some economic acceleration, that's a

headwind to multiples. the second part, which is clearly unknown, is taxes at the corporate level. right now we're trying to bring back on-shore corporations so the u.s. tax is very competitive. i don't think they'll touch territorial, that means versus global taxation. i don't think they'll change the bonus depreciation they may bump the rate those are the elements the corporation and my mix will look at from the consumer's point of view, they're obviously right now doing other things in terms of looking at stocks you're right inflation likely to pick up a year from now, the ten-year much higher in 1980 i bought for my clients and others 10.78, and today it's up from 0.63 that's a major tailwind to the market but now it's going to be a headwind >> mario, you mentioned in our

first segment the infrastructure you believe there's going to be a move and a push to invest in infrastructure are there particular companies you have in your -- on your telescope in that area >> that's a good question. you know, i like financial engineering, lots of companies spun off for example, you saw united technologies brilliantly spin off carrier, spin off otis and buy in raytheon. you saw ibm announce financial engineering and m & a. we own 16% to 20% of a company located in florida that was spun off from hertz it's called hertz equipment rental we didn't buy it necessarily because of an infrastructure bill basically we bought it because even the margins were 28%. the other guy's, united rentals, 48% to 50% they have gotten it back up to

38%. another 10% improvement, on $2 billion. of revenues is $200 million, you have 60 going 90 i look a company in chattanooga, i like gen corp, i like a company in cambridge, massachusetts, grace construction products, 70 odd million shares, $23 stock. the reason i like it is starboard just put nine people on the board there's seven people on the board. they're going to sell it what is it worth is it worth 35 selko in switzerland is a leader in that area and this is a company somebody can buy under it those are some of the names. case/new holland, they have a new ceo and they're going to split it up into trucking and agricultural equipment and construction equipment there's a lot of companies that have been overlooked and ignored. i think they'll continue to do well in that infrastructure. inland water transportation,

makes the barges, companies that make rail equipment. i like gatx, a rail equipment supplier that's been around 120 years. the stock is 80 with 34 million shares nice, small midcap stock >> i don't know what -- i don't know what your secret sauce is, mario, and i'm not asking you to share it here like colonel sanders, herbs and spices -- >> i'm the coca-cola guy. >> but you mentioned so many companies routinely, many i have not heard of, i'm sure many of our viewers haven't. when you come in in person, when you used to, you're often carrying big folders, all kinds of reading material. give me a window on your process. how do you find these companies? >> no, no, no, come on, i've been very fortunate to attract analysts, we have 30 analysts, each one follows certain industries, and we have accumulated compounded knowledge. when you've been following the auto industry for 45 years and a conference -- most recent 44,

you have 20, 30 companies presenting, you connect the dots why does automags, what is michael jackson going to do? will he take it public why is the stock 65 up from 50 what is he doing in the used car buying -- those are not complicated things it's simple. and then in addition to that, when you look at companies in the broadcasting area, you look at disney, selling 300 billion enterprise value look at comcast, $300 billion. then you get this little company that could be a giant. it's got 600 million shares selling at 25. imagine if they can pull it off. they've got $16 billion in debt, it will be reduced when they sell this thing to a publishing business, simon and schuster, sell some real estate. and they have 350 million of capex, where disney has 6 billion and comcast has 9 billion capex.

they're going to be bought it's fun, it's passion and it's focus >> mario, always great to hear from you have a great holiday season. we'll see you either before the end of the year or next year. >> i will not see you at a basketball game this year, though >> we got some waiting to do with the thibodeau knicks. >> thanks for having me. take care. >> great stuff always enjoy hearing from him. still ahead, palantir is sinking after morgan stanley says it's come too far too fast. covid pushing more people from suburban to urban areas and security system adt is benefiting we'll talk to the ceo.

welcome back to "power lunch. dow is back in positive territory. in fact, it's just broken out to new session highs on news out of washington coming specifically from schumer and pelosi on the stimulus, on the next covid relief bill. they just released a joint statement of democratic leaders of the house and senate saying they believe there should be immediate -- let me get the phrasing exactly for you

the need to act is immediate, they say, and we believe with good faith negotiations, we can come to an agreement, they're saying, on the wie partisan framework introduced by senators yesterday, that it should be used as the basis for immediate bipartisan and bicameral negotiations again, some sort of happy speak from the democratic side about the need at least to have a bipartisan discussion to move forward immediately, as they see it, on stimulus. you can see the market reaction. it's not just in the dow, which is at session highs, about 31 points take a look at the yield curve, which we showed a moment ago, specifically the spread between the two-year and ten-year treasury notes we're seeing that first after the release of the fed's beige book hitting the steepest since march. it's now the steepest since february 2018. important barometer of future growth there also something that usually supports how well the financials are trading. we'll keep an eye on all of it for you and let you know what further response we see out of

d.c. at this point ty >> kelly, thank you very much. let's talk about shares of palantir, getting pummeled, down 14% after morgan stanley downgraded the stock to underweight as it sees an extended overweight valuation. they say the play is up triple digits since its late september ipo with very little change in the fundamental story. your trading nation is john of toekville asset management and danielle shea of simpler trading. i want to call it palantir fascitis, but be it as it may. what do you think of this company and does it have to grow into its valuation, or is this selloff an opportunity to snap up some shares that might pay off down the road? >> my opinion, i'm not attracted to the stock at current valuation. it's trading at about 33 times,

not next year's sales, 2022 price the sales, which is extreme valuation, trading a massive premium to other software as a service type of companies, and this is, to me, the prototypical stock of 2020, that it's going to perform well. ipo'd earlier in the year. it's a growthy tech company that has a lot of momentum behind it, and that pushed the stock higher listen, if you like the stock, then this selloff today is a gift if you don't like the stock, you want to wait for a bigger selloff. of course, they have government contracts that -- they have government contracts that are sticky but i think that's already priced in the stock when you're trading at 2x your peer group. >> for you growthy but frothy. danielle, i sense that you like it, but you like it in different kinds of ways, including the opportunity to trade some options around volatility in this stock >> yes that's absolutely correct. for me, the morgan stanley downgrade, this for me is just a

little shortsighted, honestly. i'm looking at this as a fivet ten-year play as far as buying and holding the stock. this company is aid le leader it analysis and ai. they have government contracts and they've had those contracts for a while. they're completely ignoring the fact that this company is expanding into the private space and there's so many applications for this software that they haven't even donny et. you know, on one hand, i lieu the stock. for me i love it even more on the options market because of the amount of speculation that we've seen in this stock, the options premiums are really high and you have the retail crowd that loves the stock and then you have the institutional crowd that keeps shorting it. so, you have a couple different factors here you have high iv, which gives you a great opportunity to sell some credit spreads or simply sell the puts on a day like today, especially if you want to pick up the stock. or, you know, you wait until it kind of bases out and

consolidate and then try to sell the short squeeze to the upside when it comes. >> interesting thought thank you very much. danielle, thank you. for more trading nation, head to our website or follow us on twitter @tradingnation ahead on "power lunch," it's betting on the burbs we'll speak to the ceo of adt security about that next and now the latest from tradingnation.cnbc.com and a word from our sponsor. >> a double top is a chart pattern that suggests an uptrend might be ending and ready to reverse. sometimes called an m-formation because of the way it looks on a chart, a double top consists of two well-defined peaks at approximately the same price traders often view a break of the lowest low as a bearish

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this hour. the los angeles lakers are paying up to keep lebron james multiple news outlets reporting james has signed a two-year contract extension worth $85 million. retiring senator lamar alexander getting praise from fellow republicans and democrats on the senate floor. in his farewell address, i will he urge the his colleagues to work harder on working together. >> so, the senate doesn't need a change of rules. it needs a change of behavior. and the behavior to change first is to stop blocking each other's amendments if you're against it, vote no. why stop the entire body from even considering it? why join the grand ol' opry if you don't want to sing and this isn't a story about social distancing, necessarily, but i guess it could be. an israeli rancher has started using drones to manage his herd. he says he has been able to cut his workforce in half and let the remaining workers spend more

time with their families you are up to date that's the news update back to you. >> thank you very much it's like a roomba for -- >> it's a roomba for cattle. markets right now turning higher on positive news about stimulus talks that kelly talked about just a few moments ago you see the dow industrials up one-tenth of 1%. the s&p in the green as well nasdaq still in the red by 16. there you see it, up 32 points the dow energy, the best performing sector today, as oil jumps by about 2%. and who's following oil today? none other than dom chu at the commodity desk. >> snapping a three-day losing streak $45, world bench crude right now $48.19 helped along by that pfizer and biontech covid vaccine news. we got energy department data

showing inventory fell now you've got the eye turning to global oil cartel opec, partnering countries they are expected to meet tomorrow on production cuts. that meeting was supposed to happen yesterday and got postponed. we'll send things back to you. >> big day in the energy markets, thank you. meanwhile, an october survey, the national association of realtors finds 85% of new home sales occurred outside of cities a big beneficiary of the suburban boom is home security company, adt they're nearly 150 years old but they're partnering with other tech companies like google and lyft, to provide a more comprehensive security package outside of just the home joining me to discuss the wave of new customers and the future of home security is the ceo of adt, jim defreeze. good to have you welcome. >> thanks for having me. >> as i watch people move in

around here, and we get a lot of questions about which security systems to use and so forth, i noticed that the ring door bell in many ways often functions as a rival now. i think it's owned by amazon you guys did a big partnership with google. i think the first products are coming from that maybe early next year. what should we expect that to look like? >> we're super excited about the partnership with google. it's a seven-year partnership in addition to the commercial relationship google invested approximately 7% equity stake in our company. we'll roll out with google products in the third quarter of 2021 and go to market as adt plus google at that time >> wow so, for people who have these systems installed already, are there natural upgrades or are a lot of these products aimed at new entrants into the market

a lot of people are doing video on top of the core adt offering and just how busy has it been for you lately >> it's been incredibly busy there's a handful of demand catalyst for our business right now. home automation overall has been a considerable catalyst for us our average installation today includes 14 devices. cameras, access to garage door openers, connectivity to lights, the nest thermostat, automated locks. so home automation has been a significant catalyst for us. secondly, home builds overall has been -- has been a catalyst for us, and millenials are an important part of that home formation, and our prime candidates for home automation lastly, something i think you were talking about a little earlier on your show, the

de-urbanization and migration to the suburbs has been another catalyst to helping adt grow this year. >> that's incredible and i would add as well, i think some of the unrest we've seen across the country this year has made people think about what kind of home security systems they might need. so, as we look -- as you say, if you're installing 14 different pieces of equipment for people on a typical installation, i have to imagine your price point is going up. this is the ultimate you guys were sort of a subscription as a service model long before that was in vogue. you know, i can tell you we always call every year when you try to raise our bills and talk them back down, but how is that migrating in terms of what people are paying for your service now as it becomes more and more high tech >> there's a lot of variability depending on what the customer interest is. if there are more devices and more services, the monthly

recurring fee is a little bit higher the advent of cameras is driving costs up a bit the vast majority of our systems that we sell today include video services, include cameras. and so there's a lot of variability, largely orbiting around how many services the customer wants included in the package. >> right and, jim, what would you say finally about how sustainable this current demand boom is? you guys, you would think, would be a business that wouldn't have a hangover effect because every customer you sign on is presumably paying for a while. what's the average tenure? >> the average tenure for us is about seven or eight years we feel good about the catalysts that are in place today, as i mentioned home automation is increasing we expect that to continue to increase over the long haul. the home builds seems to have a nice runway ahead of it.

the migration of the suburbs, we think, will be more of a macro trend than a microtrend. we have new partnerships, d.r. horton is one of the more important ones that we feel excellent about and all of these demand catalysts will help drive growth, and that's before we have an opportunity next year to leverage the relationship and partnership that we have with google as i said in q3 of next year, we'll go to market as adt plus google >> you can see a big transition point for the company, which has had volatile stock over the past couple of years. jim, thank you for joining us. >> thank you tyler? coming up in power movers, electric vehicles, heart monitors and the most streamed artist of 2020 we want to show you the stocks of the vaccine makers. they are bouncing back today pfizer, biontech, moderna, all

higher getting their vaccines' approval in the uk "power lunch" will be right back

welcome back, everybody. time for power movers. we start with workhorse, electrical vehicle maker the u.s. postal service delay ing decision to incorporate electric vehicles. workhorse group is down. irhythm technologies is down, medical services on what will be

covered and, according to analysts, the decision wasn't quite as positive as investors had hoped. so we end up with spotify, from one rhythm to another. up big after a two-week high nothing fundamental. it released its list of the most-streamed artist worldwide pause for drama. bad bunny is number one. his songs were streamed more than 8 billion times, kelly. it's a lot of raps. >> your favorite. >> don't know him. >> yeah, me neither. one more mover today as well, disney citi group becomes the biggest disney bull on the street, what they say about the stock and how they justify their price target. go to cnbc.com/pro for that. remarkable rise for by the koin fo've been at these levels berecan it gain broader acceptae and hold on to these levels? power lunch will be right back

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welcome back bitcoin as an asset class is heating up how does it compare to investments like gold, and how much is it really fleece influence bid the dollar danny masters, former jp morgan commodity trader and currently chairman of an asset company

what's behind this latest leg higher >> thanks, can ellie it's great to be with you guys i'm reminded to think about a conversation i had a few years ago with kevin walsh, who you may remember from the federal reserve. and he made a prophetic statement to me at one point when he said the door to crypto was opened by the 2008 program and he went on to say that the future of crypto would be determine bid how we unwound that qe program. while both of us contemplated that over a cocktail, neither of us could have conceived that qe would end up tripling or unwinding. largely due to the global pandemic, bitcoin is driven by the narrative and the drive for inflation resistant investments. it's driven by digitization and

because people are look for that and it's driven a bit by the fact that people are now a little bit more accepting of the volatility and that's come about partly because bitcoin's volatility has been declining the last few years but also because the volatility of all asset classes are more than people expected. >> fair enough we now have projections going to $50,000, $100,000. on one hand you want people who want in for that ride and on the other hand -- well, relatedly, you have big name investors who say it's not insane to have exposure to this stuff and we're going to put a few percentage points of our portfolio in it. is it replacing gold, do you think? and do you game around in these predictions of what bitcoin could ultimately be worth?

well, there's never a doubt. sentiment is electric, there's no doubt about that. the recent conversation between the former bank of england governor mark carney and the ceo of blackrock and i would describe this as a conversation between two bitcoin deniers, one of whom was coming to his senses, and it was larry fink who was pointing out the enormous interest that blackrock had been inkrecensing over its websites that's one demand call effect that's going on. companies are outperforming the market because they're going public with their exposure to bitcoin. at coin shares we've done

research showing 4% allocation of bitcoin in the traditional balanced portfolio has interesting performance and benefits we've seen market wizards, as you mentioned, simmons, anderson all becoming interested in this asset class. so, yeah, there is definitely a narrative at the moment whereby this deceived career interest of having bitcoin in your institutional portfolio as a portfolio manager is fast migrate i migrating into a theorist of not having bitcoin in your portfolio. >> you're not going to get fired anymore if you had some bitcoin but you might get fired if you didn't that's a powerful thing. trillions of dollars turn on that distinction it's been good to have you today. thank you so much.

>> you're very welcome. >> danny matthews of share coin. ty before we hand it off to "the closing bell" team -- i'm losing my mind there you see off a fifth of a percent, s&p same amount we'll join you, kelly, again tomorrow thanks, everybody, for watching power lunch. "closing bell" is right now. >> i'm wilfred frost along with sara isen. markets taking a bit of a breather after yesterday's strong stock we've seen stocks move steadily higher throughout the day, the dow now positive some movement on relief bill this afternoon as democratic leaders in congress endorse a slim-down stimulus deal that could receive support from the gop. salesforce, leading the dow lower, getting punished for its announced acquisition. axiom down, what, 8% as we