moment do the dow wiping out a 400-point drop after a new variant of coronavirus find a new strain. and congress is close to passing a second stimulus bill and a new vaccine. and tesla is down on its first day in the s&p 500 and why is elon musk tweeting all-in on bitcoin. i thought this was the beginning of christmas shopping for me who is going to come out on top and how much will last-minute stimulus checks potentially help "power lunch" starts right now

welcome to "power lunch, as tyler mentioned, moderna vaccine providing a shot in the arm for stocks let's start with mike santoli. >> an overnight scare related to the new strain related to the coronavirus overseas but maybe a bit of a rethink here as we don't really necessarily think it going to be something that challenges the vaccine the overall story of stimulus, easy money here's the intra day of the s&p. you saw a selloff right after the open we got rid of all the up side that had been in the books since september. take a look also at bonds. the bond market has also had a similar path we actually had a little decline in yields, depression in yields and they've also bounced back. essentially the bond market saying we probably don't have

anything necessarily going on here that's going to change the overall macro story. the fed gave the banks the clear. you see jpmorgan nudging a new postcoronavirus. and energy actually coming off travel related as well as energy shares this is on a one-month basis we peaked a couple of weeks ago with energy. that is a little bit of a drag but overall the market did find its footing, tyler >> thank you very much as moderna rolls out its vaccine and more are receiving the pfizer vaccine, there is concern about a new variant of the virus in the u.k is there a new strain or not and

if so, would the vaccines out in the market now give any protection against it? >> yes, there is a new strain of the coronavirus. this is not abnormal we have heard about different variants of this virus viruses make copies of themselves, they make mistakes, there are different sort of strains that have come up. this is causing more concerns than others. in the u.k., they're saying it more transitimissible you saw the dramatic when they locked down in november and they opened back up in december and are seeing a dramatic case spike. experts point out as did the virologist who joined us last hour that, yes, it could be more transmissible but a lot of it could be do you know to human

behavior as well we can wear masks and socially distance and when we don't do those things, this virus spreads like wildfire. i've been reaching out to companies to get a sense of whether the drugs and vaccines will protect from this strain. i heard from eli lilly they say their drug, bamlanivimab should be effective against the strain and lab work is under way to confirm that reassuring news from those two companies. i'm waiting to hear back from moderna and pfizer but the word i'm getting from experts in this case is reassuring as well vaccine are expect to protect against this strain. >> you said something very interesting in there so there is a new variant or a

new strain of this virus and either it may be more transmissible or it may be human behavior that is miaking it appear to be more transmissible. did i understand that right? >> yeah, and it could be maybe some of both, tyler. people could be having covid fatigue and not taking as many precautions and it could be easier for this variant to spread we just don't have the science to bag it up it's based on modelling right now so we hope to get more clarity in the coming days and weeks. the big reminder about this is there are things we can do even before we get vaccinated to stop the spread and we have to do that >> thanks, meg rahel. >> and a stimulus deal finally agreed to by congressional leaders to provided 900 billion of relief but the deal hasn't

been voted on yet. let's go to ylan mui for those details. >> reporter: that's right, woo ehave -- we have a deal now we just need lawmakers to go ahead and vote 5,593 pages long that's because it not just the $900 billion covid relief package, also a $1.4 trillion government funding bill. now that we have the text of this bill, we are expected to see it go to the house rules committee at 2:45 p.m. and then we'll see several hours of debate around this legislation after that before lawmakers take a final vote democratic leadership is warning that this could be a very late night indeed now, over in the senate majority leader mitch mcconnell has not provided a specific timeline but he says his chamber would work as quickly as possible >> we're going to pass another

historic rescue package to help american families through this pandemic and pass funding and do both of these things as soon as possible >> reporter: mcconnell did tell reporters the senate will stay in until they finish tonight, though he may have met tomorrow among. tonight is when the government runs out of money once again lawmakers are also passing a one-we'll stopgap funning mesh to make sure there's time to clear beau chambers and be signed into law by the president. >> thanks to you tyler. >> stocks well off their morning lows as the dow erase as 400 point drop now it's positive by a little bit. stimulus is nearly in the bag, two covid vaccines in the u.s.

is there anything that could stop this really let's bring in david liebovitz david, why don't i let you kick it off here. it looks like there was concern offer this covid variant partly or now mostlyoff set, not so fast, don't worry about it but stimulus helping here. so i think the most important thing is over the better part of the year is to look through rising case counts and a slowdown in the economy and focus on the idea that we will get the policy support that we need and that will build an effective bridge to the other side of the pandemic that narrative was kind of called into question given the news out of the u.k. overnight but the combination of a stimulus package and more clarity from a scientific angle

on exactly what's going on in europe i think has given the market a bit of its confidence back i think there are always things that can go wrong. volatility occurs when expectations fails to align with reality. we're not saying it n's not goig to be above the ride over the next couple of months but 2021 is still in fact and that's what the market is mostly focused on. >> there's a lot priced in to where stock values sit today is 2021 going to be a show me year, where the companies are going to have to show me the earnings >> i think 2021 we'll expect to see material progress on the earnings i don't think all companies will sigh a normalization in one year i think what we've seen overnight is a good reminder that there's a lot we still don't know about this virus. we're still learning, still learning about the mutations we don't know how long the vaccine will last, if we might need annual boosters

but i think to your point the market has been willing to look through near term disruption and i think this is a fundamental tension we've been dealing with between on the near term knowing the pandemic is at its worst, that we're having record high numbers of infections, hospitalization and death in some cases and yet on the other hand knowing people are getting their vaccines starting now. i think it will be a bit of a show me year i do think the fiscal stimulus is a good start. sadly i would give it a b, not an a because i think it was neither timely norwell started >> there were several sectors that were absolutely on fire since mid march and others that have lagged. where would you put inequities' incremental money medding into 2021 what sectors, ron? >> we've been focused less so on a sector level than trying to find companies generating high

returns on capital before the pandemic, have seen returns on capital to go down but we've seen no reason for returns not to go back up. good example, maybe some of the card companies or card networks or issuerissuers. there have also been certain companies in the medical device arena where there were certain surgeries put on hole because they were deemed elective. if you get a pacemaker, that's not something you want for christmas. so we're trying to find those kind of stocks that still haven't really priced in the normalization and trying to take advantage of the opportunities that we're finding in a range of sectors. i do want to note the s&p is up 14.5% year to date but the median skok is up 6% and there are about 75, 76 stocks that are down over 20%. you can still find sm mark

david, as you look to 2021, either by sector or as ron said the capital position of the companies, which areas would you be putting money into? >> well, i think ron made a very good point and i have a somewhat similar view we're looking for companies that have experienced temporary disruption, not permanent demand disruption we like materials and industrials as we round the bend into the coming year but it not like we're completely jumping ship in the text sector. on that side of the equation, we think you need that exposure for the longer term. it's about rethinking the way that you build it and figuring out how to access to the structural trends without the top five or ten names in the s&p 500. seeing a lot of opportunity and if the earnings come through, we're set up for a pretty good year in 2021 >> we'll leave it on that happy

not. thanks for your time today >> coming up, a sea of red for the dow but a couple of bright spots. that would be thanks to the banks and nike, which is leading the way, up more than 5% and also hitting a record high also a number of retail stocks have made a faelt l stealth come back in the last three months. pen a last month stimulus deal ho boost retail sales? more power lunch" straight ahead. in a land not so far away,

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welcome back, everybody. retailers like macy's, kohl's, nordstrom,despite virus worrie and will the last minute $600 checks that are going out supposedly as soon as next week help with the holiday spending joining me now is terry lundgren, former chairman and ce of macy's. as you assess where the consumer is right now, are they okay but the stores not >> well, first of all, many consumers are okay and obviously several are not. so this $600 check is going to be helpful particularly to those who have been struggling financially and really importantly to small businesses. those are the ones we need to stay in business, keep in business through the holiday

season where frankly they make a big% percent of their annual l earning. i don't like the idea that it came after christmas but it certainly gives confidence that the money is coming and will encourage consumers to spend for the next few days. >> i worry about the local merchants. i kridry around my town in nortn new jersey and you can see 20 or 30 for sale or rent signs and those are people whose life savings may have been decimated. >> there's been 11,000 physical stores close this year it's a combination of things but obviously the virus was the motivator that accelerated the pace of change it's been an overstored country,

something we've been trying to slowly and gradually correct as online stores crew, the hole pie so there had to be a con tracti traction it's just accelerated aggressively here in the last year >> that was the question i'm going to turn to we've been overstored and how much closer are we now to that equilibrium point or how much farther do we have to go, in your and, number two, how much do the closings of these stores reverberate into the reit companies and real estate companies and then into the banking system >> to answer the first part of your question is we're not done yet. and frank i, at thisler, we're

going to and today aren't going to get relief in january it's going toing to ge tougher when the volume of prchz drop dramatically, the expenses remain so it going to be very challenging. this me is not finished. so i suspect we're going from i mean, this is really bad news for the local retailers and frankly, bad news for a lot of the large e and when it does come to an end and we now have doo so that's the up side, the

kroo that's down the road probably not much more than six months from now. >> so how does this reverberate, then, through the el real real where you've got experiences that are going bankrupt are that there are going to be developers and owners who are not going to get paid and then that goes back to their maybe lenders who have lent them the money to buy the properties or build them them in the first place. >> it's true it's very complicated. and i think it's on a by-case basis. i like what simon property in brookfield are doing they're actually joining hands with a terrific p, with the idea that they're going to shore up their capital be but now wp i

kind of like that idea that they're preserving themselves and taking control of it but frankly across the board, it's going to be on a casebycase basis. >> hi. it's ra held solomon had you i know just last week it was jefferies that updated kole's and mayy do we rel think that's you or maybe this time around do you think they'll hold on to it and continue to save >> well, first of all, i do think that i gir to but the big are question is are they going

to come back and shopping in physical stores. in 2019, a year ago, that online sale, including amazon, including macy's.com, which is very strong, including wallmart.com, is only 11% of the base so peel the figure now over time it going to change but not in the next tief years. people are fill stg to be forget -- people are stop be in it so they are experience

experience today the broader picture has to take place over the next year or so and i think it will. >> i think a lot coming up, the somebody somebody right now it one of the worst performers down plu, airlines, hole tell and the details on the tveral turmoil right after this quick break

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welcome back check out these shares for the big airlines today these are mostly on fears of a new strain of the virus. let's bring in phil lebeau for more >> hi, rahel the big concern is the lockdowns we're seeing in you were where is that a hakeem jeffries with hard when look peacekeeper

and those continue you have british airlines, virginia atlantic and delta that have flights coming in the u.s. is not banning u. fwnchts and the prospect of more testing. here's what he had to say. >> there it it if then p if they do not agree, then new york sta stale. sfrm the reason we're showing you these three is because these are the air looirchs that have that expokiest to you're if over an extended period of time over in europe in in terms

of pass injury frm all three days this weekend, friday, ei t eight. in and that's that little tick higher that you see at the end of nrnl it was down substantially early kwler this morning. it has moved back considerably, almost ps it have. in that has been under some pressure as you take a look over the last couple of weeks rahel, we're going to be watching this closely to see what happens in terms of these travel numbers and whether or not this is what under one or the of premise and now we're talking about the from

primarily you're talking about united and neff come and p and therefore the payroll needed to be reduced now with the new high wole port be flrp and are oo nm and if we see levels like beer doing right now? what do the airlines do then do they once again furlough those employsor bite the bullet and say we think clients are going to start flying ahead of time >> it's just matter of whether we all feel safe to fly. thank you. >> you bet >> now over to seema mody.

>> it's not just the airlines under pressure all falling a europe tightens the rehave the trade og nation followed quinn. on a day reich and you've been sizing up the opportunities in airlines and you actual will you luck willsouthwest a lan so they've been buying up roults during this -- all year. so not just in the u.s., some in mexico, but largely resort kind of oriented roots. and then they've been the most efficient at cost cutting of all the u.s. airlines. and you add in that those rising energy prices are impact that

due to lack of hab and this and we actually own it >> and, quinn, you look it the these in general they've had it it it whether it's is there a time that you think you'd be more comfortable, buying, whether it's a from i think i would be very, very patient. this is sfm and after the news over the weekend it makes a ton of sense but there's just so much opportunity out there i'm just not sure that an investor needs to take a shot at

something that is owe headline risk driven. all of a sudden you wake up and your stock is down 4 or 5% we think if in fact and people getting out and doing things but also they're finally getting the credit for being sort of stay-at hp home plays. so i think that kills two birds with wrun stone and those are the areas that woo would prefer if we were looking at that point. >> ride sharing it is. thank you for joining me today on aparading nation," tyler back to you >> the second mouth gets the cheese that's one i hadn't hurn . >> broader market still a little

bit lower and still well off the lows of the day. and tesla, one of the big weighted stocks just from the get-go and dragging the index lower, as tesla is down about 4 2/3% and we'll talk about that next, including bitcoin. we'll be right back.

welcome back, everyone i'm sue herera

about 16 million people will get their covid-19 shot by february. that is from alex azar >> i look forward to receiving this svaccine myself in the coming days to demonstrate to americans that these vaccines are safe and incredibly effective at preventing covid-19 >> a house subpoena has subpoenaed secretary azar and cdc director robert redfield lawmakers want to know if trump officials tried to block or change reports about the spread of covid-19. an hhs statement claims there was no political interference. >> and britain now faces travel restrictions from 40 countries spain was allowing flights but now they are suspending the flights. other new countries joins the list, hong kong and the sus

sti -- u.s. is still allowing flights >> the s&p and nasdaq are still in the red as you see there but ever so slightly look at the nasdaq nipping at turning negative the semiconductor stocks, it is lower today. microsoft is the latest tech giant set to design and release their own process, of course apple has been planning to do that as well intel, the biggest laggard in the dow, falling about 9% in the just the past two days, trading just above the 52-low. let's turn to oil, shall we? eric chemi has the numbers >> dropping more than 2.5% in

today's session. new of that new coronavirus strain in the u.k. spurring fears of a slower-than-expected recovery in fuel demand. this is coming off the highest settlement in february for wti and brent. the s&p energy sector one of the worst performing sectors in the index in today's session down about 1% energy stocks like diamondback energy, apache and schlumberger are down between 1.5 and 2%, occidental petra nemco -- petron 1% and tesla is up 30% in the past month alone it enters the s&p 500 as the since biggest company in the index but as a heavyweight, it

may bring s&p earnings down more than 1% next year. so can tesla hold its charge moving forward let's bring in joe osha, who just hiked his price target to $788 and tim higgins at the wall street journal and cnbc contributor. joe, this is a very fresh note the last time you put out a note on tesla i think was mid-november, a $516 price target what do you base this new valuation on, this new price target, $788 a share >> thanks for having me on, rahel. appreciate it. what we've done this morning is look at how many vehicles we think tesla can sell in 2025 that's been the basis for our valuation. we had been saying that we think tesla can ship about 2.5 million units. we took that number to 3 this morning and that's based, a, on where we see the market for battery electric vehicles going

and, b, where we see tesla's competitive position there were a few other tweets but that was the major change in the impetus behind the price target zu target >> you said in your show that today is like graduation day for tesla. up sa you said they've been able to create billions to create a war chest. tell bus about that. >> one of the few problems has been to pay for the goals. tesla needs lots of factory room and that costs lots of money we're seeing factories built in germanyand texas and that should help but it still requires capital that's been the big concern. elan has been able to raise a ton of money that should help kind of fuel that growth in coming years

>> and, joe, let me bring it back to you. do you think certainly joining the s&p perhaps gives tesla a bit more credibility, but the analyst community does seem quite split on the company i think last i checked a third were buys, a third were holds and i think about a third also were sell. so analysts still see split and divided about the company. >> i want to agree with you about tesla being much better capitaliz capitalized. any time you're seeing a industry going through a major industrial transformation, thing can get weird. i was covering intel when that business was in the process of wiping out the main frame processors business. it didn't seem like it was going to happen and it seemed like the stock price was ahead of itself until it wasn't. i was covering in the film

business in the 90s when digital photography wiped that out i think a lot of incumbents are grossly underestimating how quickly thele world's auto business is going to go electric that's why we think tesla over the next couple of years still has room to grow >> tim, i want to give you the final word and piggy back about things getting a little weird. there was an exchange yesterday on twitter with elon musk considering, at least it appeared that he was considering perhaps converting his entire balance sheet into bitcoin do you think he's really considering that or do you think maybe it was just in jest? >> it's the challenge of a ceo communicating by twitter knowing him that is correct seemed to be a joke. it's been an ongoing theme of his over the past few years, taking shots at bitcoin and crypto currency in general for several years on twitter people would take accounts and

kind of spoof him and try to get people to take into bitcoin scams so much he's had a lot of fun over the years poking back on that. >> okay. we thank you both for being with us today >> thanks a lot. >> thank you >> tyler >> lockheed martin moving in on el elon musk today, spending millions >> lockheed already has a big head start in the area aerojet brings propulsion or rocket engines this takes more of the supply chain in-house for lockheed and gives lockheed exposures huge new icm and expands the portfolio, including key contact

for nasa's return of astronauts to the moon. for lockheed, this dovetails into his 24th century fighter vision after the one other major rocket maker was bought by north run, it's noted this better positions them to compete against aerojet rocketdyne shares. northr northrup and raytheon are under pressure meantime with only a few small and midcap stand alone defense names really kind of remaining out there in the marketplace, names like aeroenvironment and mercury are all trading higher as well.

>> the legal will wind in the lap of a new administration, there could be regulatory questions? >> on a call, investors did note these are complementary businesses in terms of lockheed from a traditional anti-trust sense there couldn't seem to be an issue it was only just maybe five years ago in this sector didn't believe any more consolidation was possible and yet we have seen this wave of mergers and acquisitions in the and that they are in a position to save taxpayer dollars, especially in light of this flat tax budget, the idea that you can wring more cost out of that supply chain, especially in these uncertain economic times right now but the key here really will be what the biden administration makes of this with a new defense secretary pick that's coming in.

i'd also just note there is also precedent given the fact that northrup did buy orbital a couple years ago >> coming up at 3 p.m., mario gabelli. nobody i'd rather listen to than mario, he is smart on stocks >> financials are higher more than 1%. goldman sachs, jpmorgan, you got to have a morgan in there, bank of america, all big gainers. we'll be back with more of today's big movers next on "power lunch." this holiday, get the phones everyone wants on the 5g america's been waiting for. verizon 5g is next level. now get one of our best 5g phones on us when you buy one.

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welcome back time now for today's power movers let's start with nike. one of the stocks boosting the dow. it dropped its results in a rare friday after the bell report beat on earnings and revenue as it made up for the losses in sales at physical stores on line l diamondback energy down today on the drop in oil prices but also announcing it is buying qep resource force $3 billion. it expands diamondback's reach

in west texas shale drilling and mgm resorts getting hit on concerns on a new strain of the virus will slow the economic rebound. a little dancing on a monday, tyler, never hurt anybody. i will send it back to you. >> absolutely. bitcoin down about 5% after hitting a record high. right now still at $22,000 look at that graph. the airlines down today, but american dealt at that still up 50 from their march lows both of the stocks benefitted from the he radio tailer trade of the last part this year up next, what's in store for the robinhood crown. stay with us

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all right. 2020 has been the year of the -- i was watching something fascinating going on over my shoulder there, everybody. the year of the retail trader buying stocks on robinhood and bitcoin on coin base now both companies are sit to go public in 2021 as the pandemic lifts, we hope, and people head back to the office, will those traders keep moving and trading let's bring in kate rooney now for more >> hi, tyler analysts do expect the trading frenzy to slow down a little bit but after a record 2020 they say the baseline will now be a lot higher according to jmp securities, the industry has added roughly 10 million new clients this year. based on app down loads they estimate 60% came from robin hood robinho robinhood's last official count total was 13 million they wouldn't confirm this year's growth but they did tell me the amount of women using

that app tripled since last year schwab, td, e trade and active traders also saw growth. the current pandemic conditions, volatility all made what is being called a perfect storm for bringing new people into the stock market the rise of fractional trading also made expensive stocks more accessible according the apex clearing, tesla overtook apple as the most widely held. they also saw popularity for new ipos like palantir and airbnb. back to you. >> kate, thank you a little bit more than an hour left in what has been a wild trading day. t thedown's range has been more than 550 points. we will be back with more on the markets. (upbeat music)

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well, they tell me it has been a wild day in the markets it doesn't kind of feel that day compared with some of the day where is we had those multiple hurricane thousand point swings. losses earlier it looked like we would be down 800 on the dow we were down 400 now we are up 60 there is a wild swing. financials are the standout among the dow sectors. >> goldman sachs is top performer in the dow, as is nike and jp morgan. >> but a lot of other sectors are not positive

you look at the industrials there. nike a helper among the dow as well. >> tyler, before we go, i have to ask you something, earlier when we were talking with retail you said you haven't started christmas shopping yet does this mean you haven't gotten my gift yet >> yours i have gotten it was very, very expensive, i will give it to you on wednesday. >> i hope so >> that's it for "power lunch. "closing bell" starts right now? thank you. welcome, everyone, to "closing bell." i'm sara eisen along with kayla tausche who is in for wilfred frost today. talk about a turnaround, stocks kicked off the shortened holiday trading week in the red but the dow is up 74 points right now in positive territory, sitting just below session highs heading into the final hour of trade. let's look at what's driving the action a new coronavirus strain in england raising red flags around the globe and weighing on sentiment leading severa