responsibility we need to think about this. we need to think about it. the power that these companies wield comes with great responsibility and we got to get it right i understand your rational for not rushing it but i just was saying, if you could get the 2,000 out and do something you wanted to do, why not do it. i think there is more to it. jeff bewkes, thank you for coming on today. sonnenfeld, i know what our doing. you're sending me horrible articles on a daily basis. happy new year to you both. >> educating you educating you. >> yes, i need it. all right, beck. >> happy fu yenew year, everybo. right now it is time for "squawk on the street. we'll see you next year. good thursday morning. welcome to "squawk on the street." faber with morgan brennan and mike santoli futures as we head to the final trading day of the year. we're set up for a lower open,

not much of anything not much of anything that will keep our viewers tuned in, won't it that's where our road map starts this morning >> exciting. >> yeah, stocks continue to post freshhighs, to close out the year. >> that's right. mcconnell blocking stimulus. what the senate majority leader is taking about the $2,000 checks. >> protecting the vaccine. what is being done to combat fraud as the rollout continues >> we will start this hour, though, with stocks, and, mike, you can always make it interesting for our viewers. you and i were talking prior to coming on air, and i asked you, what is of interest, and you did mention the performance number this year. it was a key number that we have seen a number of times >> well, it is actually striking that 15.5%, the gain in the s&p 500 right now, that is where it will settle out, without dividends, but what is striking about that is if you go back four years, four plus years, since the 2016 election, it has been about 15% annualized gain

in the s&p 500 since the low for the last deep long bear market, global financial crisis, march 19th, 2009, the annualized gain is 15.5%. this weird regular return pattern, but the path has been so unexpected, dramatic, violent, especially this year. and i think the key thing to think about from a year ago is we went from late cycle conditions to early cycle conditions in a blink. one year ago, the expectation for 2020 by the fed, by everybody, 2% growth, 3.5% unemployment, we would be talking about raising interest rates by the fed, right now, into next year, from 1.5% to 1.75 to something like 2 that was the idea, the profit margins were peaking we were going to have to worry about wage growth pinching profit margins, and, in fact, we had the yield curve invert the prior year everyone was in this vigil for when is it going to end? and guess what, it ended in this

flash recession and a massive policy response that is essentially accelerated the recovery dynamics and the market is great i don't care about, you know, stock valuations being high, because credit conditions are generous, and we can live with all that the big question to me is where we can start from valuations at this level without probably the benefit of getting them expanded much next year when you have most of the s&p 500 not really geared to an economic acceleration what does that mean for the index, does it mean, morgan, you have to pick your spots from here >> that's right. looking to see the earnings catch up with the price and from there what does that mean for the price? it is something we're talking about in general recently. the dow and s&p are up for the seventh quarter in the last eight. just that first quarter, we saw that -- i guess the second quarter, we saw that huge market plunge in the bear territory,

that's only time we have seen the down quarters for those two major averages, which is pretty incredible, speaks to how quickly the market fell and how quickly it bounced back going back to your point dow is up 6.5% year to date, the s&p as you mentioned up 15.5%. the nasdaq up more than 43%. this is one of the stats that really gets my attention here, the nasdaq is seeing its biggest outperformance to the s&p 500 since the dotcom bubble of 1999. we have had a number of folks come on here and say certain aspects of the market,rics feelt '90s, early 2000s, and the tech bubble something we have been talking about, mike. the other thing i would point out, unrelated to stocks if you actually look all around the globe, at all the best performing and worst performing assets and asset classes of the year, one of the top performers has actually been silver it is up 48% year to date.

and even then it is still by some metrics, still pretty undervalued versus the run we have seen in gold. and this is very much a story about same reasons as gold, right, hedge against inflation, weak dollar, et cetera, but it is also a story about electrification and what we're seeing in industrials and what we're seeing in tech similar story for palladium as well, which jumped i think 22% this year. that's after a huge run last year the price of palladium, i believe it trading well above the price of gold now. that also i think goes back to this conversation about where we're seeing exuberance in the market, around things like evs and some of these new emerging technologies for which there still aren't necessarily sizable revenue streams, but the offerings that are going out to the market are certainly getting a lot of investors excited, mike. >> people are without a doubt extrapolating these very long-term trends, very far in the future and willing to pay up for them right now. so we have gone from will the economy recover, how is it going

to recover as the animating force in the markets, which i think was going on in the summer and into the fall, and now it is just feeding on itself the risk appetites are where they are, the ipo window wide open, the spac story, all of it is about this sense that the fed has taken away the extreme downside scenario, the companies that have good cash flow have been priced pretty tight to those bond yields, so, in other words, doesn't seem like you can squeeze those for that much more juice. now it is okay, give me a big picture story i can believe in and it is the capital markets, david, are willing to accommodate a lot of the stories right now. >> they sure are you and i have had a long running conversation about passive versus active management i don't know what the numbers will look like, but anecdotally, the hedge funds i talked to, it has been a terrible year for humanity, but not a bad year for hedge funds. the performance numbers that i'm hearing about, and the universe of people i speak to regularly may not be what it was ten years ago, but it is decent.

and the numbers are strong the rich have gotten a lot richer this year >> yeah. no doubt that, you know if you owned assets, if you stayed in, if you took advantage of where there was leverage, without a doubt, there was some extreme performance available. and interestingly, you know, the s&p 500 at this point, the passive, you know, trend going on forever, i do think it is -- there is some chinks in the armor a little bit just because you have seen a little bit of the flows moderate for a while. this new generation of investors, they don't want to be passive. they don't care if you're only getting nine -- paying nine basis points for the s&p 500 it is, like, give me the weekly option. >> give me the action. they want the action. >> i think that that's -- and you have the s&p being, you know, the forced buyer of tesla after 700% move. and how much of that -- more of that dynamic will you find when you have a tremendous amount of market value building up outside the index right now. >> individual investors open

more than 10 million new brokerage accounts in 2020 that is a new record and does speak to, i think that rise that we have seen in retail investors and what that has done to help repel the market here. another thing i want to point out, we got weekly rail traffic and car load numbers yesterday and as you guys know, i like to follow the transports and follow the freight flows. pretty interesting this quarter we have seen a recovery in rail traffic last week, the week ending december 26th, it was really propelled. year over year and increase more than 8% and really propelled by intermodal the consumer piece of that rail traffic up more than 20%, perhaps not surprising with the holiday season, but it really speaks to the role that the consumer is playing more broadly in this economy and things like retail and specifically e-commerce in terms of the commodity car loads that you've seen strengthen as well, it has been greens, which i think also

speaks to some of the prices and price recoveries we have seen in some of those key soft commodities this year, whether it is soybeans or corn or the like and the fact that people have been really sheltering and cooking and even though restaurants for key parts of the year have not been open, not been fully open, there has been more demand for that also in light of some of the trade agreements this we have seen, which i think we're going to talk about a little bit later. >> we have a record trade deficit in goods right now so because people are just buying stuff, e-commerce, and all the rest, and not doing as much spending on services, so we're importing more stuff, and moving more stuff around the country and i think one of the interesting themes for next year is whether there is a shift. because big pull forward of durable goods people have bought and if we can go out, and, you know, six months or less or more, and people are starting to just sort of, you know, shift their spending budgets toward services and getting out in person, do we see a little bit of a hiccup in that.

>> it speaks to the fact we have seen outperformance within the transports again in the railroads and actually the two best performing stocks this year, fedex and u.p.s. it is no surprise perhaps we're seeing truck rates jump, spot rates jump and those are expected to continue shooting up in 2021. we're seeing air freight rates drop -- jump as well and then, of course, as i mentioned, the movement on the rails right now. so i do think those freight rates and the cost to move those goods around as we see an economic recovery next year is going to be a key thing to watch in the midst of the inflation conversation >> yeah. speaking of imports, french wine is going to get more expensive german wine too. not a big drinker of german wine. >> reese ling? >> yeah, i guess, right? i don't know. >> i don't drink so i don't know. >> really? >> no. >> i didn't know that. >> i'm naturally high. high on life >> well, i do. in fact, more than i had previously over the last nine or ten months, like much of the

rest of the nation only one only after 6:00. really not true. but, yeah, and aircraft parts as well, of course, that all part of sort of the back and forth between the french that figured into the tiffany lvmh imbroglio for a bit of time as well. as we have so often over the last nine months, we talk markets and have to talk about the virus itself because we have got two main stories, of course, vaccine distribution, and the virus. and unfortunately u.s. hospitalizations i think topped 125,000 for first time deaths also reaching a single day record, that was yesterday 3700 as you take a look at some of the companies that are involved with various vaccines and/or the monoclonal antibody or remdesivir and the like j&j's vaccine not yet available. but we do have the one out there from pfizer and moderna. the concern is it is not getting put into arms fast enough.

there have been a thought that we would get as many as 20 million people vaccinated by the end of the year, we're nowhere near that. i think we're closer to 3 million right now. even though the vaccine is on site, it is just not getting done it is unclear exactly what take a listen to the operation warp speed chief adviser talking about this issue yesterday >> there is a lag in how the numbers are computed but surely it is a number that is smaller than the 40 million doses that are out there already available for use. we agree that that number is lower than what we hoped for we would like to invite anybody that has energy to participate and help us further improve the vaccine to come to the table with sleeves up and help us with specific ideas we know it should be better. >> you have been into transportation logistics for a

long time. can you be of any help in terms of what may or may not be happening? the u.s. military not involved, maybe they need to be, but we're not getting as many people inoculated as quickly as we need to. >> are they actually transporting these vaccines to locations? no are they there in the background to basically add some sort of logistical support and help fill in the gaps as need be it is my understanding yes you know, one of the key contractors for the government for operation warp speed and sort of making sure everything gets distributed i think is mckesson it is interesting that mckesson is up 1.5% this week, down about 4% for the month but that might be a name and i know i reached out and others have at this network to talk to them and bring them on u.p.s. and fedex are the two main commercial carriers that have been charged with actually flying around and delivering these vaccines to the locations

on the ground. and i know in the case of the pfizer vaccine, they basically have split the map in terms of who is carrying what or delivering what, where but it still seems pretty unclear where the bottleneck is, you know we know the federal government has been, i guess, sending out on distributing or saying it is, tens of millions now of vaccines, but they aren't g getting into arms yet. it would seem like the bottleneck is somewhere on the state and/or local level and certainly i think it is a huge undertaking when you talk about stuff like vaccinations at, you know, retirement centers and senior care facilities and long care health facilities. some states doing a much better job than others. we had the west virginia governor on talking about this and cvs and walgreens involved in that too. so a lot of different players to talk to and keep an eye on as we continue to try and fire oguut

where the delays are happening here but meantime, fighting fraud, when it comes to the vaccine, that story, we're going to be talking more about that after the break. stay with us does your vitamin c last twenty-four hours? only nature's bounty does. new immune twenty-four hour plus has longer lasting vitamin c. plus, herbal and other immune superstars. only from nature's bounty.

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cybercrimes and fraud, this as the vaccine slow, though it may be, does roll out across the country. elon mui explains.

>> reporter: they're sharing information about the current threats and ways to keep the system safe. the mission is called operation stolen promises. and it is now entering its second phase, focused specifically on vaccine fraud, intellectual property theft and cybersecurity. >> we have launched over 700 criminal investigations related to covid-19 fraud. as we're talking about the vaccinations and treatments, we have seen criminal organizations pivot towards these different criminal, you know, opportunities. >> now, that was steve francis, the head of the mission, and he told me that right now the immediate threat is the straight up scam, like this website that was seized just before the holidays, and it appears to be a carbon copy of moderna's until you put in your personal information. francis said the risk will evolve as the recovery rolls on, and criminals gain more access points to the vaccine. >> the long-term threat is once

the over 200 different fdafda approved vaccinations, our concern in the long-term is that these vaccinations and treatments could be harmful. >> now, already there are about a dozen open investigations, guys, they're telling me they're seeing this activity happen on both the open and the dark web back to you. >> i guess it is not surprising to here there are scams afoot with this. because that tends to be the case still really heart wrenching to think about it i just wonder whether the scams would be able to be as prevalent if states and governments in general were i know there were some complaints and depends on the locality, but about confusing, i guess, guidance or information or hard to access web pages about vaccine distribution >> yeah, so it is really

interesting how the risks and the threats around the vaccine are different from the risks and the threats we saw when covid initially hit. so, you know, obviously everyone was sort of taken off guard to some extent by the magnitude of this pandemic, and so law enforcement was playing a little bit of ketcatch-up here, so many different actors providing so many different tests and ppe there wasn't a lot of clarity into the supply chain. this time around, there is a lot of xlar clarity on the supply c because the manufacturing is so tightly controlled and being monitored, but there is a lot of questions around how exactly this is getting out to the public and we ourselves as patients and consumers have a lot of questions as well >> thank you take a look at futures now as we head you to break. we got ten minutes before we get to an opening bell the last opening bell for this year and as you can see, we're

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seven minutes until the opening bell and futures are basically flat exxonmobil writing down the value of its assets by $20 billion for the fourth quarter, mostly related to natural gas assets that stock is trading delymost lower in the premarket now down 40% year to date. we'll be back in a moment. stay with us i have an idea for a trade.

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here's the deal. the senate is not going to split apart the three issues that president trump linked together just because democrats are afraid to address two of them. the senate is not going to be bull fly rushing out more borrowed money into the hands of democrat-rich friends who don't need the help. >> that's the deal, i guess.

at least he and joe biden like here's the deal. the deal is $2,000 is not coming anytime soon. >> yeah, exactly it was -- i guess certainly less than 50/50 prospect coming into the week market has been remarkable there is some data on the horizon, if we don't get, you know, really some help on the covid case curve, and people don't start to get vaccinated in huge numbers and doesn't seem like we're going to accelerate in terms of the consumer and service economy, then the market will have to have a little bit of a reassessment of what we priced for, for next year. i don't think we're at that moment yet it seems that we're still being carried forward on the idea that there is this acceleration, not too far ahead of us, within the standard window of what the market looks ahead to. it is remarkable that, you know, right now, you still see almost 800,000 new jobless claims this past week, better than expected, still a remarkable number and the market is sort of willing to

keep itself supported on very loose financial conditions and the expectation that, you know, what the early part of a decent recovery cycle. >> yeah. i do think -- you mentioned jobless claims and that gets to one of the debates that has brewed around 600 versus 2,000, whether it is in terms of lawmakers or economists now, and that is, you know, how stimulative are the direct checks to americans versus, say, increasing the amount from a federal level that people on unemployment would actually be getting. so i think that has been a key part of the debate as well, since we have seen so many people saving the checks that they -- and putting them into savings that they received earlier in the year as well. the other thing i'm keeping an eye on is that mbaa, the national defense authorization act, mcconnell did say that -- or did indicate that the senate will have enough votes to override president trump's veto in the senate. looks like for a vote tomorrow

$740 billion bill, and it doesn't actually allocate the money yet. but it earmarks the money for then that to be allocated and, you know, it is a 3% pay raise for our troops, and it is also billions of dollars towards everything from lockheed martin's f-35 to fully funding that b-21 bomber that is being developed by northrop grumman. a key bill to watch as we go into 2021 from the defense side and keep in mind those stocks in general have essentially been -- as one analyst put it to me recently, dead money in 2020 so it will be interesting to see now what happens to defense spending levels under a biden administration and given the fact we have the record levels of debt because of all of the stimulus that happened. >> well, yeah, i mean, even taking boeing out, those defense stocks as you note have been pretty weak relatively what is interesting too, david, just the rhetoric, right mcconnell saying we're not going to take on more debt, to hand more money over to people who don't need it. and you have to believe that

that's going to be the tone. that we have dealt with a crisis, and if the republican retain the senate, it is going to go back to, hey, we can't afford this. >> no doubt. and states and municipalities are not going to get the aid they have -- they say they so desperately need to avoid significant layoffs in the new year of -- parts of their municipal workforce. there it is. opening bell for this december 31st, 2020 i think i speak for all of us which we say, yeah, that's a good day you can see sort of a mitcha mi on real time exchange and the nyse and nasdaq on both fronts you talked about the credit markets and what might have been a normal year, we would be expecting now, what will we get to is 2% on the ten-year instead of .9. it has been an eventful year not just for the equity markets, but as you mentioned, the debt markets as well. i don't know if you saw monday,

did you see peru borrow a billion dollars in 100 years a billion dollars. but it was peru. 100 years, i think they paid 323 yield. an interesting reflection of where things stand now in the global credit market. >> and given the context for where yields are everywhere else, somebody could say, 3.3, that's expensive money for a sovereign. even if it is 100 years. everything is upside down. >> even if it is the thought, i don't know how many times over the last 100 years. >> on an actuarial basis, someone can plug in the portfolio and does something to the duration and expected yield over time. who knows. it is remarkable it has been at this point all the debt and corporates have done as well, $2 trillion in cash, really not a lot of maturities ahead of us into next year there is not really a moment where it would be a reckoning and say the strapped companies will have to be able to roll

over their debt or not that's a positive backdrop and what companies do with the money is they're smart uses for $2 trillion, maybe a huge buyback, i think we expect that to be ramped up. interestingly, yesterday, dividends for the s&p 500 companies this year are basically flat, up slightly, which is remarkable. we really thought goldman sachs had estimates they would be down 15%, 20% this year but the implications of that march/april period on corporate balance sheets and cash flows just didn't come to pass and we have reaped the benefit of that. the question is from here on out. we had massive moves, 30% this quarter in the russell 2000, more than doubled up the lows, small cap stocks at 2,000 for the russell 2000, good round number to keep in your head for the high water mark. i do think it is really about the starting point being a little bit less advantageous right now in terms of valuation and sentiment and positioning. but doesn't change the fact that this is a bull market even if we

get some bumps. >> you have to wonder about the dividends. we mentioned exxon a few moments ago, putting out this guidance ahead of their earnings at the beginning of february. the dividend on exxon right now is 8%, more than 8%, they're paying out $15 billion a year in dividends as they take this, $20 billion writedown on assets in the fourth quarter after basically the year of unprofitability. so you look at some of these blue chip names, in something like the energy sector and you wonder if something like crude oil and just the energy complex in general doesn't recover more strongly or, you know, soonish, what is going to happen to some of the balance sheets and some of the things like payouts to investors. >> no, and we have been focused on exxon as well, down 40% this year, despite what has been a decent rally as we pointed out that this last quarter of the year for energy overall, morgan. but, still, underperforming like this competitor chevron and there has been a lot of focus on

the company's capital allocation and i think that is partially the focus of a couple of activists in the stock you got callisters, de shaw as well questioning the capital allocation to your point, not just the dividend, but capex spending and whether it is realistic for this current environment, spending what they spent -- what back in 2014, not really changing their plans as dramatically as some investors would like them to, to account for the current era and where we are. so it will be interesting to see if that pressure is brought to bear and we do see significant changes in their cost structure, in their capex, and their spending and perhaps as you pointed out, in the dividend as well that all comes in 2021 will there be a fight? i deon't know. we're going to be watching it. >> without a doubt really, if you dial back a little bit sectorwise, exxon and

chevron are roughly half of the s&p energy market cap. the energy sector itself is the smallest connecter in terms of relative weight, 2.2% of the s&p 500, smaller than real estate, smaller than utilities, smaller than materials you have to wonder on a long-term mean reversion basis if, you know, we're basically still going to be able to have some head room to revive on, you know, those stocks or just people's interest in the sector. if you look at the futures curve, it looks like it is not going away and you might have some demand help it is an interesting dynamic, especially when you look at the fact that tech has been up 40% plus the past two years in a row. some work out there showings a , they have not repeated and they're down in the following year it is all in the mix in terms of figuring out where the heavy bets have been laid already in this market and what has been

neglected. >> yeah. so true. i realize that energy sector in a little while now it amazes me i don't think you can talk about energy or commodities and not talk about the other trade deal that is afoot now. we mentioned tariffs against the eu are -- more tariffs against the eu by the u.s. announced by the government last night, but in the meantime, you had this -- i realize it has been years in the mix, but it stalled according to reports, ahead of the presidential election here, and was really rushed through in the last couple of weeks, this trade deal between the eu and china. and it sounds very reminiscent of some of the trade negotiations and sticking points of the phase one deal that we saw implemented here at the beginning of the year and also just some of the gripes being addressed that the u.s. shed a light on a couple of years ago as well. and that china has at least said

that it would make moves to change, things like tech transfer, and the like so that's going to be a key one to watch with the biden administration coming in what happens on the trade front, especially where china is concerned. and what kind of stance this administration takes towards china, what happens with those tariffs here and also what happens in terms of our negotiations with other ail like likes ail lillies like the eu. this was the gripe of the current administration against the european union when it came to things like standing against china and part of the reason i think this administration took such a surprisingly hawkish stance on some of our key allies like europe. >> yeah. that is interesting. what also has been interesting

this year has been tesla you talk about the market cap or the weighted cap of energy tesla is probably above that of the entire group, i don't know. >> not quite >> number six overall, only 80% of the market cap, because elon musk had quite a year, becoming one of the wealthiest man on the planet as a result of that 734% rise in tesla. >> that's just tesla. >> that's just tesla >> that's not the privately held one, spacex. >> that's right. >> nicely valued >> yeah. he's got his neurolink as well musk is an industry unto himself. tesla has been taking a lot of us certainly, well, it captured the imagination. >> just a small note on that, in terms of -- it is power and weight within the benchmark, at this point amazon and tesla, together, right now, are about 38, 39% of the consumer discretionary sector >> right >> so don't be looking at the

xly for what is the health of the underlying consumer. it has become detached from the sort of cyclical aspects of consumer spending more versus less you want to look at gm, sure, want to look at target, all that stuff matters. they're so small when it comes to this way we slice the index up sectorwise. it is quite amazing. >> yeah. finally, before we get to bob and some insight on the broader market this morning as well and what else is driving things, i wanted to come back to my old friends in media my favorite area of coverage over the last decades. take a look at disney this year. i think it is worth noting that stock and that company seemed to be so susceptible to so many of the things that were brought upon us as a result of the pandemic, namely no movie production, nobody going to movie theaters, and the theme parks, of course, being hit as a result of being closed, and/or limited capacity and yet look what happened there this year. it is up 25% for some time its

market cap was below that of netflix. now $100 billion more than netflix. why? direct to consumer that's what investors are focused on in that area, disney plus has delivered. subscribers hit 86.8 million as of december 2nd. that was versus 73.3 million at the end of the last quarter. hulu subscribers, 39 million and they forecast between 3 and 350 million total streaming subs by 2024 they're spending a lot of money here, but they do see break even coming fairly soon and profitability a few years after that but disney's performance has been fascinating to watch this year as direct to consumer, just again, captured the imagination of investors and it is what they want to pay for. >> there is a complete buy what you know, buy what you love, ethic going on now the unusual part with disney is the fast growing component that

is capturing this powerful trend of the company as a whole is driving the whole valuation right now. and i didn't think that would be possible i still thought it was going to be -- we'll hold them to some kind of former range of cash flow multiples and they have to show they're going to have the earnings power coming to -- it doesn't really matter at this point. it has been -- and it is hard to find other examples of that. i can point to nike as another one. there is still -- massive record high, the value of the brand is enormous because they said, guess what we figured out, direct to consumer and arguably something like a chipotle, which is less mature part of its growth phase, anyway, it is amazing that the entire disney plus is driving the whole valuation. much more debt than there used to be. we think there is less financial flexibility but getting rewarded for making the long-term -- >> that was the key bet of chairman, bob iger, we'll see this year, he's got another year left on his contract, we'll see if he fills that out are if he

ends up as an ambassador to a country like china to your point, peak losses in fiscal 2021, talking about direct to consumer again, i'm talking about here, being profitable, by fiscal 2024 at disney interesting story there. a check on what else is driving today's market action, for that we go to bob pisani. bob? >> hello, david. good to see you. happy final day of the year, everybody. 4 to 1 declining to advancing stocks we start the day pretty much the way it looked a few months ago, with tech in the lead, tech up 40% this year. china also in the lead, one of the best performing markets in the year i like to use mchi, the broad china market, mainland china, hong kong and stocks listed in the u.s., alibaba, that's up 26% for the year what else, energy down, we're down, oh what, 35% for energy on the year banks, nice one in the second half still down about 13% for the

year and some other sectors also a little on the weak side today, consumer staples at this point, there is a lot of exuberance out there i counted the ways a number of times. let me remind everybody, this is pretty extreme i only have record stock prices, we have record etf inflows i follow inflows as an alternative way of looking at exuberance and folks, they're throwing money at etfs at certain sectors of the market right now. we also have very high record margin debt levels that are out there. we have very high investor exuberance that is out there we have some record high value metrics, like price to cash flow, record highs as well so thisis pretty exuberant right now. and you shouldn't be asking what is going right in 2021, if you're an investor with prices this high, you should be asking what is going to go wrong. that's really the issue here the short-term thing that everybody knows about, the higher taxes issue, if the democrats win the senate we'll figure that out very soon.

there are other issues out there, the vaccine rollout could stumble or falter. we could have second half inflation, some people are championing that idea, we're going to go out and spend like crazy beginning in the second half of the year that's a little bit out there. i think the biggest problem is we don't know what the big unknown is out there with prices this high, the pain trade, the trade that would cause the greatest pain to the most people, is clearly lower here so, remember, the markets at new highs, bad news is going to move the market a lot more down than good news moving the market up here we should be-liking e in lookint could possibly be going wrong. it is obvious to the market, we're expecting a huge rebound in earnings. i can do this many, many ways. look at the dollar value, the s&p, 162 is the record in 2019 we dropped down to 130s today. you see the big rebound to 167 a new high for -- new record

2021 but the whisper numbers are much higher people at 175, 180, and a lot of people are north of 200 for 2022 this -- a lost things are expected to go right mark set pricing in a lot of things going really well, without a hiccup we had a hiccup in the market since october. it is essentially straight up. so far the bull scenario has been playing out it is pricey, this -- things aren't giving anything back. even the cyclical stocks, you think they would give back a little, after having such a run. we are 2%, 3%, 4% off the highs we have seen for most of the stocks we talked about honeywell, 26 times 2021 herbi iearnings the market is pricey and stretched, not giving a lot back here in terms of the big themes for 2020, it is very, very simple. boy, did everybody want to own thematic technology etfs anything solar stocks, online retail stocks, lithium and

battery components, esports, cloud computing, anything, massive amounts of creations for the etfs around this space, that's the way they want to own, they want to own the stocks in themes, in groups and through etfs, that was the big story finally we should know with all the exuberance, the laggards that were out there, the destruction and i know mike was talking about this earlier, the destruction of the oil stocks like occidental and exxon this year, oil stocks are now essentially 2% of the s&p 500. it was double digits even less than ten years ago and the destruction in the travel and leisure industry. airlines, cruise lines, mall operators you see like simon property group, they recovered a little bit in the fourth quarter, you can see it has been a pretty awful year. only thing we all can agree on is 2021 is going to be a much better year. looking forward to being with all three of you guys.

back to you. >> on that note, happy new year, bob. thank you. >> happy new year to you. time for the bond report and for that we turn to rick santelli hi, rick >> good morning, morgan. happy new year's eve we look at two-week of 10s, summarizes how we're coasting into year end. we're really wearing this range between 92 basis points and 95 basis points and consider this, we settle at 192 last year. we basically lopped ten-year note yields in half. i hate using percentages on fixed income sovereign debt markets. it is an exercise in futility. but there is something about saying down 52% for the world standard of debt these are abnormal times to be sure and when bob pisani gave us that great rundown of 2020, it is hard for me not to think there is a lot of thumbs on the scale, there is a certain percentage of the equity markets in any

investment globally, almost becoming the utility because there is so much back stopping going on that's really hard to handicap, especially when you're a trader. it is dumb to fight when you're a trader look at two-week -- year to date of 10s, 52%, well, we look across the globe, those percentages are even bigger in other countries. dollar index for two weeks, basically going straight down. we're going to be finishing at the lowest levels since the spring of 2018 year to date, dollar index, down about 7% it settled last year at 96 we'll call it 96.5 now 89.5 the dollar versus the chinese yuan, down 6%. 6% in the context of all the numbers we're hearing in 2020 actually sounds small. when it is the biggest consumption economy against the biggest export economy, it means something. just look at some of the trade numbers. and look at the damage that the dollar index is taking on, due to all the spending that is

going on and finally our neighbors in europe, the euro had a good year, up 9.5% against the dollar but as we start to get back to normal, as our consumption economy starts to export and hopefully china's export economy starts to consume, i think europe will have its fair share of issues as we start to coast past the coronavirus god willing, of course david, morgan, mike, happy new year eve and happy new year to all of you >> you as well thank you very much. take a look at where we stand, 20 minutes into today's session. we have the dow just below the flat line, down 25 points. s&p as well down just .04% nasdaq also wnbodo aut an .8%. a lot more "squawk on the street" still ahead.

at the chart, palladium.

up almost 27% year to date talk about strongly performing commodity this year. we have more "sqwawk on the street" after this stay with is

. it has been a nightmare on main street with the pandemic shuttering so much small businesses kate rogers has those numbers for us >> we know it has been an historically challenging year. there are about 32 million businesses the rest are solopreneurs. projecting that as of december 9, the number of open businesses fell by 29% meeting 8 million close to end of year and have employees. the staggering figure improved from the march high. revenues are also down 32% new business starts via the numbers

up 40% year on year. >> there is still that american entrepreneurism and looking to start something after we are dealing with this pandemic there is something down the road saying we are going to get back to being an entrepreneur or something we'll look to try since i changed my work environment. >> happy to hear the silver lining for folks out there find

gs opportunities we have another hour of street ahead. stay with us

good thursday morning,

everybody. cal has the morning off. a half hour to trading you can see not too much dow has not been the case too often as of late only to the tune of .17% let's get to the road map this morning. nasdaq leading the way up 43%. less than 3 million people receiving the vaccine so far >> going into midnight and how it could affect your portfolio final trading day of 2020. s&p on track for a better than

15% gain take a look at all the indices. the nasdaq up more than 40%. didn't even go down as much in the march selloff than the broad market one of the big questions is whether the concentration of the winning stocks has gotten too extreme or even too extreme since september. kind of enough strength or potential energy in the market russell 2000 smaller stocks and in banks to keep this thing rolling to see if the mega, megacaps take a i rest at all. >> some of the names as you pointed out with very high price to earnings or price to sale multiples in double digits to

triple digits. i thought it was interesting you pointed out. the stat was 10 million new accounts added during the course of this year that is something none of us could have foreseen with sports picking up and seem to want some action of some kind. thinking when sports gets back or people are in the stands, they go away but they haven't. some of the names we follow lately that have been soaring have backed off a bit. they all still do trade at multiples. >> the end of the year is probably the thought process a record more than 10 million new brokerage accounts don't seem to be looking at some of

the data charted the wall street journal is a good chart this morning. doesn't seem like that will let up any time too soon. the question isn't not what could go right or wrong? many of them are younger adults they get too burned. i think back to the financial crisis in 2009 and the fact that we had so many millennials that weren't vofting and missed out on the run of recovery because of how burned they were and how burned they were of their parents then

>> let's talk about the markets. good to see u. let's talk it late march, early april, you were advising calm as hard as it was to be not sure you could have ever anticipated from there, we would be where we are now. give me a feel where we are and where we'll go next year >> this has been one of the most amazing years in the markets that i've lived through. it reminded me of the basic truism and surprise because of the obvious reason that what everybody thinks is going to happen is already priced in. this year, we have a huge

surprise that the paean turned out to be a global phenomenon. with a devastating flow. perhaps just as surprising was despite that, the economy powered along and it drove stocks up. can you believe we are sitting here at the end of the year loobing at stocks up 40% my question now is being looing at 2021, where are the surprises going to be and what kind of surprises are they likely to be. that's where i'm getting a little cautious. i rebalance, i don't bet on timing the market. everybody is assuming the

vaccine is going to roll out pent up demand and interest rates willstay low highly unlikely positive of course i'm looking strictly at market hoping they'll continue. if there is a glitch here or there, i'm not predicting any of

that we have to be aware of the possibility out there. >> there is an argument out there that has this economic recovery just when you get this kind of policy response after a huge surge, there tends to be this tendency of many years of hiring to go. at the same time, risk appetites are incredibly high. you see the risk markets going nutty. how would you navigate it when deciding whether we are at the start of something or closer to the end of something >> we are not at the start of the recovery we know that whenever the market is hitting new highs as it has been lately, you are not at the beginning of

the rally. that we know to certainty. i don't feel like this is a bubble feel. feels like 2000 to me where you had this huge scenario propelling tech stocks the market strung out is very highly valued right now but still nowhere near what it was in something like 2000 we've had this incredible outperformance my advice is make sure you are not overweighted in tech and in these high flighting popular

stocks which, you know you want exposure and in the changing momentum stocks. they are cropping up the newspaper now, stock trading has become the pandemic entertainment. if we were still in locker rooms, i would hear the chart in there. investors are borrowing money and putting them into the stocks i wish i could call them and tell them do not do that it strikes me as wildly wreckless. >> i've seen some of those folks

and had those conversations as well in ohio, 60% of nursing home save elected not to take the vaccine. we'll have a debate whether we see companies start to mandate until and unless that happens, i wonder how much this is priced into the market. >> what is priced in is a smooth roll out and adoption rate it seems kind of happening already. that will be disappointingly

low. >> i wouldn't read too much into the ohio number out of nursing homes and having parents in their 90s he they don't really want to prolong their lives. so they are kind of in a different category than the rest of the population. i hope they do get it. from what i see, it is safe. i wouldn't read too much into the very, very elderly population >> we hope to see you in person again in the new year. >> wouldn't that be nice >> i'm going to say we are going to in 2021 until then, i'll sure we'll see you virtually. >> happy new year to you you too.

coming up. this stock has been a big winner in 2020. up over 160% >> what is it? we'll talk to the ceo next to all the businesses that helped us

make it through 2020... thank you for going the extra mile... and for the extra pump of caramel. thank you for the good food... and the good karma. thank you for all the deliveries... especially this one. you've reminded us that no matter what, we can always find a way to bounce forward. so thank you, to our customers and to businesses everywhere,

from all of us at comcast business. continuing our series on stocks boston beer is up 150% let's bring in boston beer

president to talk a little about the business good to see you. is it fair to say the great performance is almost entirely because of those growth brands for a company that really popularized craft brewing. >> they like the beyond beer like products, like the hard seltzer tea. beer got a big hit when restaurants and bars went down they've grown significantly.

>> interested in the idea that because people aren't going out to drink, they are changing what they drink at home do you think that's an enduring change >> i think until people go back to bars and restaurants. you'll see brands like truly or twisted tea people are creating new hab ets and these are part of the consideration when in the future they maybe may not have been in the past i'm curious, especially as someone who doesn't drink myself that nonalcoholic beer is becoming as popular it is. who is drinking thatnd what is the outlook for the beer business is for 2021.

>> nonalcoholic beer is not just for people like me anymore sometimes in the middle of drinking beer with alcohol so it is called just the haze. it doesn't take like a nonalcoholic beer. as it relates to total beer business, it is more of a mix. we expect to see a nice boom we expect beer will glow next year. >> i should hope so, your be multiple your stock went up this year

do you want to sell some stock by the way you might be smart to do that. >> i'm not a seller, i think it would be unwise to sell actually >> why >> there is a lot of growth ahead of us. this is our third year of double digit growth we already guided next year. the hard sell zverev category has a lot of growth ahead. we think beer will come back i'm focused on 21-22 we are grateful and lucky with the way things turned out glad

the year is over and ready to move on to better places in the future >> as the ceo of a major use company, if that becomes a more lasting approval are you going to mandate your employees get mandated >> that's a great question we are discussing that now first of all, we wan to make sure our co-workers have access and we want to guide them to get the vaccination but we are not saying we'll mandate it. we know we can't legally we want to do it in a way that makes everybody feel comfortable and creates the right incentive to do the right thing. >> your market cap is well above

coors. it is an opportunity to use your currency as acquisition in using this market cap and currency you have the history of this company has been one that innovates on its own. that is number one in the space. hard cider is number one, things like truly we've done really well. >> we did acquire a brewery a year and a half ago we got two founders who are tremendous brewers. we have the ability to control our destiny. we felt confident we could do on our own, that is cheap to buy another company as you suggest

>> that is quite a turn. the question is who is going to buy you? is a quick one about once we are back in restaurants and bars how much damage has been done to bars for your distribution and your growth? >> we could be 20% to 30% of bars and restaurants that don't reopen we are confident they'll be rereplaced by others we are hopeful these are really important customers of ours. we've created a restaurant fund, we are rooting for them and we want them to come back until we are all vaccinated, it

is not going to happen. >> we are hoping by next summer could be a normal summer then we'll see what it looks like at that point >> thank you for coming on, happy new year >> after the break, the future of the office in 2021. we'll be right back. - i sent your new prescription to the pharmacy.

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>> we go to 2021, we have things like vaccine roll outs starting to gain momentum more workers are going to go

back to office space how is that different from what we saw prepandemic >> competing with fewer and more premium. we do that across one in 50 cities we are in the front line in new york, dallas or tampa given that, here is what we are hearing. the theme everybody is talking about is employee empowerment giving them the choice of when to work from home or go to the office, maybe going in a few days a week, where to live and that will transform a lot of the way companies build their work space. >> i've heard something liked

the hub and spoke model. when you talk about foot prints in 50 markets. what do you think is the strength of those return to work conversations? >> you say, look, what do employees want a lot of it is the concept of distribution in the city, this hub and spoke model. maybe you have your headquarters in downtown l.a. and distribution at the national level. you have 15 to 20 million americans thinking about moving. it would be difficult for companies to lose those employees by saying you have to work in chicago. looking to add work places in that hub and spoke mode in suburb areas it a hard unless you have limited resources, it is hard to do that on their own

to stand up 30 offices by constructing and managing them themselves which means the dominant theme is that you need to use a partner to do that there is us, there is wework you aren't seeing a lot of demand for that. those companies will figure out how to meet the demand in a way to honor the company's cultures in a great experience from employees when they buy it from a company like us or do it themselves like they did in the last 70 years. >> companies looking to reduce space in general landlords being creative with vacancies. what will it mean to rent and to supply for your company?

>> i think traditional long-term leases are going to be a little challenged in your coming here right now, the average head guarders are 60% utilized. it will look more like 30% moving forward it will mean companies will probably down size the amount of space they take in their headquarters that will be offset by adding more locations in more cities. it is no secret that will be a complicated thing in the office to navigate. i'm not sure i would argue for

the broader industry, this would be a banner few years. >> what kind of protocols would be implemented >> if you have a private office, you are probably going into work right now? if you work in an open floor plan space, for white color workers, you are probably not going into work. so creating common areas they are truly safe, et cetera. a large portion, 90% of offices

are open floor plan offices, which means most americans aren't going until they are vaccinated >> are you going to go public next year? >> we are marching towards thattout come whether next year or 2022. somewhere in that range. >> thank you for joining us today. >> thank you time for a covid update. >> good morning. the new more infectious strain of the coronavirus continues to spread a 23-year-old chinese student who returned from the uk has been found positive. as for the united states -- >> it is here no doubt we predicted it would be when you have so much of it in the uk, when it spread to the

other countries and canada, if is inevitable. you'll hear more reports that is just the reality of the way these viruss spread. >> the biden inaugural committee plans to host a nationwide memorial to honor the hundreds of thousands of americans who have died from the covid-19 to be held at the lincoln pool with cities and towns invited to light up church buildings and ring church bells. the hospital system preparing for that new covid strain "sqwawk on the street" will be right back er finance system than we do. workday. how do they make better decisions faster? workday. got to do something. workday!

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hospitalizations pass 125,000 for the first time various parts of the country joining us now ceo at baptist health in arkansas thank you both for being here. doctor, let me begin with you. we begin this time around in terms of the virus, your community and hospital give us anupdate in terms of a response

we have general boards and bed available and huge amount of people coming to the emergency rooms. we've been able to keep up chicago has stayed in front of the curve. >> what are you seeing in arkansas right now >> during and right after christmas, we saw a reduction in report of positive cases we quickly realized that was due to people not coming in for tests and testing centers being closed over the holiday weekend. that started to change yesterday when we saw a record number of cases. as you know, numbers tonlt care about holidays we've seen a creep upwards over the weekend and into this week we've had three days in a row of new highs in arkansas.

>> one of the conversation we've had for days now has been the bottleneck in terms of getting those produced vaccines out and distributed on the ground. getting supplies you anticipated in this process. >> if you take the step back and acknowledge, this is the largest challenge as a country as we've ever had saw that initially and not surprising with any roll out you have hiccups that being said, the state of illinois is working closely with chicago. we've been given vaccine for our first responders

as soon as it comes out, there is a lot of communication that goes back and forth and we give it to the arms of people in the front line we go to about 1,000 a day. we were able to get that into the front line we would like to have move with chicago and the rest of the state of illinois. given the numbers and the supply chain, we are comfortable and optimistic about what has happened so far in our state >> same with regard to arkansas. what are you seeing? >> similar situation i think it has gone really well. over 6,700 staff members and physicians the vaccine as of yesterday. we started to receive a second batch this week we can continue to use i do think it is really important we think about

public/private partnerships to vaccinate and get out quicker. one of the challenges and what is coming to us. we wouldn't know how to participate. we want to encourage and do that and recognize as soon as we get the high risk individuals vaccinated, that will relief some of the pressure on hospitalizations >> it is funny we are hearing this from a lot of the people who run these hospitals, that will go pretty well my question is, do you understand again beyond the hospital environment what is going on out there or what the expectations are are you getting any guidance from the state of illinois and chicago? >> first of all, that's a great question

if you take a step back and wonder why there is such a hunger this started eight months ago. in february, life changed in this country as we went from city to city and traumatized the health care industry and this world and the nation the first time this came out in the importance of the vaccine. the hunger for it was phenomenal we'll have people sitting there waiting and waiting where people are starting to line up from it. the question is the disconnect we have 11,000 to 12,000 employees. where he get a tracking number we get that out.

we get them in people's arms within hours of arrival. we'll stay to midnight i think the challenge is people seeing other people getting vaccines you get that frustration of saying why isn't there more out and available. the cdc has set guidelines these are world renoun doctors saying this is the order which we are going to go it is early. at the end day, it is still so early to make a limit jimt it would be like looking at the first play of a football game. if someone scores a touch down, that doesn't mean they'll won the game it is very early on and we will continue to get better organized over time. >> the new variant, you mention

you are hitting new highs. are you concerned about that are you just generally concerned in terms of capacity if things do get worse >> we are certainly concerned about the issues we encounter today with the threat of the new virus where we have seen terrible news for the united states we expected that to occur. the hospitals in arkansas are working to increase icu capacity on a given day, there may only be 30 to 40 icu beds we are working hard to alleviate that anything that compounds that for us will be a challenge we anticipate that in the next month or two >> we appreciate that. it is helpful. thank you for your work and your

front-line workers as well for their incredible work over the last few months. happy new year to you both >> thank you >> take a look at this year's worst performers in the s&p 500. not surprising, cruise line and energy companies down 5% this year back in a few minutes.

>> one group of 2020 winners could outperform see where investor jeff mills would put his money to work. more "sqwawk on the street" coming up.

>> the major averages skiming the flat line on this last day of trading in 2020 take a look at this best performer today. western digital up 8.5%.

up 20% in the past month more "sqwawk on the street" after this break stay with us and in an emergency, they need a network that puts them first. that connects them to technology, to each other, and to other agencies. that's why at&t built firstnet with and for first responders the emergency response network authorized by congress. firstnet. because putting them first is our job.

to all the businesses make it through 2020... thank you for going the extra mile... and for the extra pump of caramel. thank you for the good food... and the good karma. thank you for all the deliveries... especially this one.

you've reminded us that no matter what, we can always find a way to bounce forward. so thank you, to our customers and to businesses everywhere, from all of us at comcast business. civil new laws going into effect in 2021 we have what you need to know.

hi, eric >> that's right. good morning, mike when the calendar flips to 2021 tomorrow, many new laws take effect across the country. many of those affecting your wallet 401(k) contributions are not changing, the limit for total employer and employee contributions will be $58,000 and the 401(k) compensation limit climbs up to $290,000. the cap on earnings subject to the social security tax, that's going up again next year 137,000 going up to $142,800 half of the states are raising minimum wage in 2021 most of those increases kicking in it tomorrow the increases range all the way from the skimpy eight sents an hour in minnesota to $1.50 in new mexico all of that according to the labor law center drug pricing continues to be a hot topic and at least eight states are addressing it by putting a cap how much diabetes patients can pay for insulin, as

little as $25 for a 35 day supply in new mexico up to $100 for 30 days in illinois, new york, and washington most of those rules kicking in tomorrow voters in it arizona, montana, new jersey, and south dakota deciding to legalize recreational marijuana new jersey is even working to set up a legal marketplace voters also made oregon the first state in the nation to decriminalize the possession of all illegal drugs in small amounts for personal use including heroin and cocaine that state is also raising toeb taxes. and this one could be popular with consumers a new york state law will stop subscription businesses like netflix or hulu from automatically renewing service without consent. and they cannot advertise services free when attached to an automatic renewal that rule taking effect february 9th. over to you. >> that's a good rundown and good place to start with our next guest happy new year, eric joining us now to discuss cannabis growth in 2021 around

the new laws, bo wrigley happy new year >> pleasure. happy new year's eve to everyone >> let's talk about the new laws and regulations that are going into effect for cannabis and what that actually means for parallel cannabis in 2021. >> well, you know, i think what we'll see in 2021 is we're the largest multistate operator out there. we pay attention to all these sorts of things. i think you're going to continue to see the growth that you have seen this year in 2020 and on the order of some approximately 40%. i think you'll continue to see double digit growth in this category and in this industry which is pretty remarkable considering the environment that we're in there are other companies that might do well in other

industries but this industry as a whole is going to grow substantially. i think you'll see a lot of consolidation and multiple expansion from an investor standpoint i think, you know, all the talk and awareness that cannabis has gotten over the last few years including certainly this covid-19 year that we've been enduring, are really bringing into focus the importance of this business and investors will be astute. not all cannabis companies are alike. they have to look at projections and runway and not just, you know, not just number of markets but size of markets that, you know, companies bring in available capital and things like that. >> yeah. i mean, certainly it's been a very mixed picture very big winners and very big losers when you look at the publicly traded cannabis names the house pushed to

decriminalize cannabis do you expect that or some version of that to make its way into law or into reality in the next year? does it go far enough. >> decriminalization is certainly super important. there are a lot of wrongs that need to be righted in the cannabis industry. that is one step we certainly want to see, you know, all sorts of steps taken as it relates to cannabis it is unfortunately been a subject that many miss and wrongdoings over time. i do think in this administration that we will definitely see a loosening of variety of different issues and regulations. you know, the house vote that passed was largely ceremonial knowing that the senate wasn't going to take it up. but i would expect in 2021 or maybe 2022 because the state's act to have more banking relief,

you know, 280 tax relief for cannabis companies because there is significant employers. they're growing in business and taxpayers and that's all good for the u.s. economy and i think our legislatures will really endorse that fact at a federal level just like they have at the state level. this is important business and deserves to be here to stay. >> yeah. and certainly plenty of states that can use the revenue just curious, year over year, what are you seeing in terms of the retail locations in sales growth and what are your expectations for 2021? >> well, we're hugely optimistic and that's partially because, again, i think investors will begin to look at, you know, management teams and companies, they'll look at compliance background, those companies that are really executing well. we feel very good about how we're able to execute although it's below the rate.

we're growing substantially this year and we're profitable. we have many, many opportunities on the docket for 2021 including some substantial innovation and property that we have around rare cannabis beverages, all kinds of things. so we're super excited about coming to 2021 and continuing to fuel our economy and hire people along the way. >> all right we'll be following closely appreciate you taking time thank you, mr. wrigley >> thank you >> coming up on "squawk alley," technology's biggest winners in 2020 and which stocks though may have some room to run. that's next. we'll see you right back near two minutes. 17 education & technology is a

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business. not boundaries. good morning, it's 8:00 a.m. at tesla headquarters in california and 11:00 a.m. on wall street and "squawk alley" is live. ♪