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tv   Worldwide Exchange  CNBC  January 20, 2021 5:00am-6:00am EST

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global headquarters and here is your top five at five. joe biden preparing to officially be sworn in as the 46th president of the united states we have complete coverage from washington, d.c. markets right now in a holding pattern ahead of that big event as investors digest what biden administration will mean for the markets and the economy. we lay out how your money will be impacted. and developing overnight, president trump issuing a flurry of final pardons as one of his last acts as commander in chief.
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meanwhile, shares of netflix taking off, soaring this morning after the streaming giant soars past 200 million members and projects a cash rich future. and he's back, jack ma resurfacing, making his first public appearance in two months since the chinese government's crack down on his alibaba company. it's wednesday, january 20th, inauguration day, 2021, you are watching "worldwide exchange" here on cnbc good morning, welcome to the show i am dominic chu in for brian sullivan this morning. here's how your money the and global markets are setting up for inauguration day 2021. futures in the green, dow jones higher by 60 points, s&p 500 by 12 points, and the nasdaq higher
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by 21. we'll have more on why the nasdaq performance is driving the headlines in the market. this is after the stocks kicked off the trading week with modest gains yesterday. the dow climbing more than 100 points, while the s&p 500 rose nearly 1% to snap its two day losing streak. the nasdaq also rallying 1 1/2% as big technology stocks rebounded from last week'sshar losses taking a look at the bond market as well, as president-elect joe biden prepares to take office, holding steady with ten-year yields, a hair blow 1.1% two-year, 1.35%, and ten-year, 1 p1.84 i mentioned the nasdaq out performance. we're watching netflix those shares are surging as you can see, they're up 12 1/2% showing fourth quarter results that showed strong subscriber growth. and they will be cash flow
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positive by next year, and considering actual share buybacks while revenues did beat estimates, earnings per share below expectations, we will dive further into the big results driving markets later on in the show let's go worldwide, a mostly positive session in asia, the hang seng jumping more than 1% with the shanghai composite, and kospi indexes in south korea let's take a look at the early trade in europe, green across the board. we're also keeping a very close eye on really what's happening with the political crisis in italy as prime minister giuseppe conte won the backing of the upper house of parliament there leaving him clinging to power but with a weakened minority government in italy. we're going to keep a close eye on the political developments there. the german dax up about 2/3 of 1% now to the inauguration of vice president or president-elect joe
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biden, just seven hours away from being sworn as the 46th president of the united states that's a live shot there of the capitol building in washington, d.c. biden is taking office amid a series of crisis as his predecessor, president trump foregoes tradition, and leaves washington, d.c. early ahead of those big events nbc news's tracie potts has more from washington. good morning. >> reporter: good morning, dom, it is going to make for an interesting split screen here in washington today request president trump leaving in just a few hours, around the time that the bidens head to the traditional inauguration morning church service, before coming to the u.s. capitol to begin today's ceremony in just a few hours under the tightest security this nation has ever seen, joe biden will be sworn in as the 46th president of the united states >> and i'm honored, i'm truly honored to be your next president and commander in chief. >> reporter: last night, the bidens with vice president-elect
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kamala harris and her husband gazed nostalgically across the national mall, lit up to honor more than 400,000 people who lost their battle with covid-19. >> for many months, we have grieved by yourselves. tonight we grieve and begin healing together >> it's important to do that as a nation. >> reporter: aides say biden's inaugural speech will focus on unity. president trump is expected to make remarks at a red carpet military sendoff this morning in a video taped farewell message, he sends good wishes to the new administration and takes a final victory lap. >> i stand before you truly proud of what we have achieved together >> reporter: overnight, the president pardoned and commuted sentences for nearly 150 people, including rappers, democrats, and former chief strategist steve bannon, but not himself, his family or his attorney, rudy giuliani >> donald trump was a stain on
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our country. so in any event, he's gone >> reporter: having lost support from a key republican ally over this month's capitol attack. >> the mob was fed lies. they were provoked by the president and other powerful people >> reporter: biden is pledging to get to work this afternoon. biden's day one agenda includes signing 15 executive orders, plus sending a bill to congress right away later today to deal with immigration he wants to create an 8-year path to immigration for undocumented immigrants. dom. >> a busy morning for sure in washington, d.c. tracie potts, thank you very much for that. and don't miss special coverage of today's inauguration right here on cnbc it starts at 11:00 a.m. eastern time with our own shepard smith. now the morning's other top headlines, including some of th first steps joe biden plans to take as president, you heard tracie potts allude to them.
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rahel solomon has more on that. >> we are getting details that president-elect biden will sign 17 executive orders after officially being sworn into office, the orders will include rolling back trump era policies and the coronavirus pandemic, and rejoining the world health organization, asking the cdc to consider immediately extending the federal eviction moratorium, and also requiring all appointees to sign an ethics pledge walt disney cut performance based bonuses amid top execs bob iger saw his compensation fall to $20 million from 45 million. ceo robert chapak, taking a lower based salary, which he agreed to scale back during the outbreak and how about this one, dom, alibaba founder, jack ma, has resurfaced after weeks out of the spotlight, and speculation
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about his whereabouts, so in a video posted on chinese social media, ma addresses teachers as part of one of his charity foundations. in october, ma made comments that appeared critical of china's financial regulator. sources tell cnbc he had been laying low since then. the hong kong listed stock did surge on news of ma's reappearance, 8.5% right now yes, he is very much back. >> a very high profile reappearance there as well thank you very much for those headlines, we'll see you later on. now back to the markets as investors await president-elect joe biden take office, cautiously optimistic about his economic agenda. for more now i am joined by patrick palfrey, cohead of the quantitative research group. thank you for joining us this morning. let's talk about whether or not investors should be more cautious about an incoming biden administration or do they feel
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like it's going to be similar to what happened under president donald trump >> i think it ultimately depends what we see out of his policy, and right now it looks like one of his main priorities is additional stimulus for the economy. in light of everything that's going on with coronavirus. so i think if we begin to see some of that $1.9 trillion package take shape, including additional stimulus checks to individuals and further support for unemployment benefits, i think that does provide another shot in the arm for the economy. and in doing so, will further equities in terms of their ascent but support a very pro-cyclical of financials and industries and materials and energy driven leadership to the market so i think his policies is incredibly important as we look forward over the next couple of years. >> does that mean that you believe that this near medium term momentum swing that we've seen that's taken so called
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value-oriented industries and sectors like you mentioned, energy, financials, others like that, industrials, do you think they assume and keep that leadership role that we've seen over the last three months in the coming year to two to three years? >> i think it's quite possible, and that's our expectation in reality, what we have seen over the past several months is, to your point, value leadership, but it only happened on news days which supported pro-cyclical moves days around vaccine announcements, days around the yellen announcement. those events were very procyclical, interest rates moved higher, pro-cyclical sectors outperformed i think right now what we have seen over the past couple of weeks, the past two weeks specifically is that trade move forward but in a broader sense it's not happening on those specific events but rather day in and day out we're seeing leadership from those groups so i think the market is already going ahead and anticipating
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some of the stimulus which we just talked about, and i think in reality, those groups are responding to that expectation, and i think it will result in their leadership going forward in fact, i think it is necessary for their leadership, without it, i don't think those groups work i think it reverts back to the growth leadership over the last couple of years. >> patrick, one of the things we reported on yesterday is the notion that the inflation expectations are at the highest levels we have seen since the fall of 2018 i refer specifically for those who follow it, the ten-year break even rates, the idea that the markets and bond markets are pricing in the monotion that things are going to start accelerating in terms of pricing. how does that dynamic play out, and how can investors position because of that expectation for growth >> that dynamic is critical. inflation expectations which is really just a gauge of what future expectations are going to be, you quoted the ten-year, but over the next ten years. it's a meaningful barometer of
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economic health, and what we expect when we see inflation expectations move forward is that the economy is going to roar, and that is really why you want to position yourself for sectors like financials, materials, and energy and industrials because they're the groups and they're the companies that benefit when you have a roaring economy. the other thing at which we are following closely, inflation expectations is one of them. certainly credit conditions. those remain quite favorable to the current backdrop we have both of those are what is driving this rotation right now. >> patrick palfrey, credit suisse, thank you so much. always great to get your thoughts, sir. when we come back on the show, more on the inauguration of joe biden as president of the united states, and what it could mean for the u.s. and china and their relations. eunice yoon is standing by in beijing with what these leaders are saying treasury secretary nominee janet yellen also laying out the biden administration's economic priorities during her
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confirmation hearing yesterday the key goals of the incoming white house, that's coming up ahead as well. and bitcoin, finding itself in a holding pattern right now as another cryptocurrency, yes, another one, hits an all time high we've got a very busy hour still ahead when "worldwide exan" tus teth break these folks, they don't have time to go to the post office they have businesses to grow customers to care for lives to get home to they use stamps.com print discounted postage for any letter any package
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president trump spent four years putting the pressure on beijing and is now taking steps to keep that up even after leaving office eunice yoon is joining us from beijing with the latest there. good evening, eunice >> reporter: good morning, dom, well, even in the 11th hour, the trump administration is taking parting shots at china in what the biden's choice for asia, curt campbell, as described as more booby-traps for the biden administration rather than welcome packages just in the past several days, the trump administration announced new sanctions on officials over hong kong, blacklisted more chinese companies, and overnight, called beijing's treatment of its muslim minority, the uyghurs, genocide, which of course enraged beijing. now, these policies and comments are likely going to take months to unwind and review but people out here do believe that the biden administration is going to have a few things in
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mind when it comes to china. first of all, overall, the approach is likely going to be tough, yet taking a different tactic the expectation is that the biden administration is going to be slow to lift certain tariffs and be much more selective with its trade policy also that's going to work more closely with traditional allies to put pressure on beijing, and finally that the united states is going to take much more effort to invest back at home in order to out compete and dom, back in congress, as well, biden's picks for secretary of state, for the director of national intelligence as well as the treasury secretary have all suggested that they do intend to take a much tougher approach on china than expected. >> eunice, i mean, speaking of that tougher approach, are there concerns given the tougher approach that we are seeing
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right now that there could be some other kind of, between the u.s. and china, what does it actually say about the road ahead for relations between these two countries? >> well, the road ahead is going to be prickly, and in state media, as well as official comments from china, there's been a lot of hope expressed for some sort of restart because there are a lot of points of conflict between the two countries. at the same time, companies out here are already positioning themselves for a potential opportunity. one point is that people say the biden administration is likely going to push greater stimulus, and that could lead to opportunities when it comes to transportation or energy another big point that people have been talking about is that in the next 24 hours or so the u.s. is likely going to rejoin the paris climate accords, and that biden's priority of climate and clean energy is really going
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to be helpful for a lot of companies out here that have been investing themselves in these types of new alternative energies. >> all right a lot of big business trends possibly playing out in the coming weeks eunice yoon live in beijing, thank you very much for that we appreciate it. still on deck for the show, tiktok's owner, speaking of china, making the jump from social media to fintech and ecommerce. details on the new payment plan from that company coming up after this break today's big number, 90%. that's how much overseas air travel was down in 2020 compared with the prior year according to the international air transport association. international air was among the hardest hit travel segments ri t pdec. sofi made it so easy to pay off my student loan debt. they were able to give me a personal loan so i could pay off all of my credit cards.
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welcome back to "worldwide exchange," let's check on this morning's other top headlines, nbc's frances rivera is in new york with the latest good inauguration morning. >> good morning to you a very busy day ahead. you have president trump before the inauguration who issued a wave of 11th hour pardons overnight, granting clemency to dozens before leaving office perhaps the biggest surprise is mr. trump is pardoning steve bannon, his former white house chief strategist was facing charges for raising money for trump's border wall. lil wayne, kodak black, and
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former detroit may ror with 25,000 troops in washington, d.c., a dozen have been removed from the assignment ten were flagged in fbi background checks for various issues ranging from minor criminal offenses to more serious concerns two more were identified for what is described as inappropriate texts and messages, possibly expressing right wing extremist sympathies. if you forgot to buy a mega millions ticket yesterday, here your chance, and a bigger one, no big winner in last night's drawing worth a whopping $865 million that gets rolled over into friday night's mega millions jackpot. $970 million that's the third largest in u.s. history, and then you got the powerball as well when it comes to that. $730 million, dom, that is tonight, so i don't know we might be headed towards a billion for each, dom. >> frances, would you come back to work if you won either of
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those? >> 100% no. >> i think i would i would come back to work at least for a little while, if i won the lottery, the bosses, i want them to know right now that i would come back to work. >> you got the asterisk for a little while i'm right there with you if it were yes or no, dom? >> i would say. >> it's covid, you can send it through an e-mail, how is that. >> i'll send it to you on the e-mail right now fra frances rivera, thank you very much, and good luck on your lottery aspirations. still ahead, more on the historic day ahead as joe biden prepares to be sworn in as the 46th president of the united states eamon javers is standing by to break down the incoming administration's economic agenda. plus, we've got expert analysis on what it means for your money, your portfolio, everything else, and as a reminder, you can watch or listen to us live on the cnbc app. "worldwi ehae"s ckn momentng iba i
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these folks, they don't have time to go to the post office they have businesses to grow customers to care for lives to get home to they use stamps.com print discounted postage for any letter any package any time right from your computer all the services of the post office plus ups only cheaper get our special tv offer a 4-week trial plus postage and a digital scale go to stamps.com/tv and never go to the post office again.
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president-elect joe biden prepares to take the oath of office he's already planning more than a dozen executive orders to roll back trump era decisions on his first day. futures are muted this morning, though, but we'll talk about what investors should expect in a quote unquote biden economy. plus, in corporate news, shares of netflix popping on better than expected revenues and word it will be cash flow
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positive after this year yes, positive. and maybe even share buybacks, it's wednesday, january 20th, inauguration day 2021, you are watching "worldwide exchange" on cnbc welcome back to "worldwide exchange," i am dominic chu in for brian sullivan this morning, and here is how your money and investments are looking right now as we are halfway through the 5:00 a.m. eastern time hour on this big inauguration day stock futures pointing to what looks like muted opens at the opening bell the dow implied higher by 64 points, the s&p by roughly 12 points, and the nasdaq higher by roughly 95 all of this is occurring after stocks kicked off the new trading week, a holiday shortened one with modest gains here the dow did climb more than 100 points, while the s&p 500 rose nearly 1%. it did, by the way, snap a
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two-day losing streak there. the nasdaq also rallying 1 1/2% as big technology stocks rebounded from last week's sharp losses, and remember, that was even before a lot of the huge positivity that we're seeing this morning with shares of netflix. taking a look now at the bond market, as president-elect joe biden prepares to take office. interest rates a key focus especially with treasury secretary nominee janet yellen on the hill yesterday talking about her confirmation aspirations. take a look at the ten-year treasury note, 1.1%, the last trade there, two-year benchmark note yields just about 1.35%, and the 30-yearlong bond, treasury bond, just about 1.84% as well. we want to get a check on the price of bitcoin, a very popular trade among certain investors these days it is right now holding steady, right around the $35,000 mark. you can see there are 34,798, the last trade on the coin base exchange, but it's another crypto that's getting all kinds of records this morning, and
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that's ether, the world's second biggest cryptocurrency by market value surging over the last week to an all time high, as you can see there, 13.07 the last trade. we have backed off those record levels. now to washington, d.c., the center, focal point of today's discussion in all sorts of news, president-elect joe biden preparing to take the oath of office as our 46th president eamon javers is joining us with what investors should expect, and should they expect anything different than president trump's market and economy. >> absolutely, dom, you're seeing this new economic team taking over with the biden administration which comes into office at noon today with the big pomp and circumstance in washington, d.c., but focus for a moment on the economic team and what you see is a group of people assembled by joe biden that are going to push for his $1.9 trillion stimulus, at least at the beginning, and then also push for an additional amount of spending on infrastructure that's got some republicans
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wary, as you look at the members of the team here the president-elect has said he's going to pick janet yellen as treasury secretary, marty walsh at labor, neera tanden as omb director that's one of the interesting ones, that could be contentious, cecilia rows, for the council of economic advisers, a big change from larry kudlow, katherine tie as the u.s. trade representative, and gary gensler, expected to be an aggressive s.e.c. chairman all of those people part of the team that's going to be pushing for the biden stimulus here in the short-term we saw janet yellen up on capitol hill yesterday, dom, making the case that the danger is in doing too little, not in doing too much she said that the economy could have scar tissue from the covid crisis, and that overall, the administration really wants to focus on the poor, working
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class, and create prosperity for more americans overall, dom. >> let's talk about whether or not we could see some kind of a massive move in policy i mean, these are things that we can talk about these could be slow moving elements of a very large tanker ship we have heard a number of those executive actions that are going to take place later on today after he gets inaugurated. what exactly can be done quickly with regard to policy without having to go through many of the confirmation processes that are going to happen in the coming weeks here what can joe biden do almost right away, so to speak? >> sure. some of the things you'll see, rejoining the paris climate accord, and others that will be relatively quick for the biden administration to put into place, but the big piece, that $1.9 trillion spending piece, some of that can be reappropriated funds, et cetera, but that's going to require legislation up on capitol hill, and that's going to require getting through an evenly divided 50/50 senate where the democrats have the margin of
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control because kamala harris, the vice president, will be able to cast the deciding vote. so they're going to have to get a package through a very skeptical united states senate, and that means that they're not going to get what chuck grassley, the republican said yesterday he feared, which is a liberal laundry list of policies, you know, they're going to have to get that through a very narrow group of united states senators and, you know, you can see them making the case going to governors, going to mayors, making the case for their stimulus proposal here but there's some skepticism from republicans who say it's simply too much spending too soon. >> and i know it's very early, and early to tell the overarching themes with regard to this administration, incoming one for president-elect joe biden, at the end of four years, what do you think the big focus will be for the biden economic team with regard to the one kind of marquee or crowning achievement they would look to get done many would say for president trump that was kind of the
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manufacturing tilt, right, towards his rhetoric what exactly do you think it would be for president-elect joe biden once he takes office here? >> well, it's going to have to be bringing the economy back from the destruction of the covid crisis joe biden took office as vice president last time around in the middle of a financial crisis now he takes office in the middle of a biologically driven economic crisis. it's got a similar feel, although this one is in many ways much worse because of the scale of the death and destruction of the covid virus, but if they're going to have a legacy it's going to be bringing the economy back from the brink of real disaster here. and then you can also see some of the themes here with janet yellen's testimony yesterday on the hill talking about her emphasis on minorities and women who have been so hard hit in this covid crisis. those folks are going to be the real focus here because they say that's where the most damage has been done. >> eamon javers live in washington with the latest there
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on this big inauguration day thank you very much, we'll see you later on today for more on what to expect under the biden administration i'm now joined by clayton allen, director for the u.s. at the yur asia group, i mean you just heard what eamon talked about with regard to the economic aspirations for the biden administration and team. what exactly will this administration look like and how different or similar will it be to the first hundred days in office for president trump >> well, thanks for having me on this morning, dom. you know, honestly, probably this is going to look not all that much like the first hundred days for trump the sort of mandate he's come in with is very different trump was in his first hundred days trying to turn u.s. policy away from the obama years, but he was starting at a place where we had a relatively healthy economy, some small things, you know, sort of disregarded there, but we didn't face the sort of national overarching crisis that
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eamon talked about biden's first hundred days are going to be entirely determined by a response to the crisis unlike anything we have seen in the u.s. in generations if not a century. just for that reason, it will look quite different. >> now, there's been a case knead that president trump did get elected because of his appeal to many parts of the center political spectrum in america. president-elect joe biden has won this particular election arguably because he appealed to a large portion of the center part of the population does that center political arena still exist in america and how exactly, then, does the biden administration look towards kind of building that particular centrist view and putting it back in the center of american politics and can it even be done >> i would say yes, absolutely the concept of a center in american politics still very much holds
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we are seeing american political life become much more divisive and much more extreme, but that doesn't erase the fact that there's still a large cohort of people who at the end of the day don't necessarily subscribe to either of those two extremes joe biden won this presidency with 7 million more popular votes than president trump, which in and of itself is a strong repudiation of the politics that under pinned a lot of president trump's political appeal so right there, i think you can make the strong case that there is still a political center. how joe biden brings that political center back into the mainstream of politics, and how he really appeals to them is another story. we have seen a lot of that reflected in some of his cabinet choices. remember, we do have a lot of people who are potentially from the more progressive wing of the party, neera tanden is a good example, certainly gary gensler would be another example of someone who's more from the elizabeth warren mold. but you have also seen people
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who have been put in place with more of a moderate focus certainly granholm at doe is more from the political moderate wing, and is someone who's focused on things that have a broad appeal, bringing back manufacturing jobs, boosting american competitiveness, but doing so in a way that also emphasizes economic justice and lifting up the, you know, whether it's minority populations, women who have been disproportionately impacted by the economic crisis, still emphasizing those progressive ideals but doing so in a way that appeals to a broad base. >> before we let you go, we've got a few moments left here. you use the word mainstream quite a bit. i think to myself, this administration, is the goal of this administration softly to get back to main street or establishment politics, that's very different than what president trump got elected on in terms of his drain the swamp mentality? >> absolutely. i would say that it's still a little too early to say exactly
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what the ultimate goal of the biden administration will be, but looking at joe biden himself, looking at him as a politician, look at him as a man, he is very much a deal maker. he's someone who prizes bipartisanship he's someone who prizes a set of kind of baseline american values that certainly would seem to suggest that coming back to a mainstream as you put it, is absolutely within his singular goals as president whether or not he's going to be able to do that is something that unfortunately only time will tell. >> all right clayton allen, the eur asia group. don't miss special coverage of the inauguration on cnbc it starts at 11:00 a.m. eastern time with our own shepard smith. must watch television on this historic day in the united states. coming up on the show, shares of netflix jumping this morning, we'll talk subscriber numbers, positivity in cash flow and possible stock buybacks coming up next. but first, as we head out to break some of your other headlines, you tube is extending
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its suspension of president trump's account for another week it remains accessible but trump is currently banned from uploading any new content to it. tiktok owner bite dance is launching a new payment service within the chinese version of its video sharing app. video creators sell items related to the content the app has payment deals in place with ali pay, and tencents, wechat pay. and frontier plans on hiring pilots this year with a goal of bringing on about a hundred. hiring was frozen last year, and last summer amid the virus pandemic big news there on the jobs front. stay tuned "worldwide exchange" will be right back
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plus ups only cheaper get our special tv offer a 4-week trial plus postage and a digital scale go to stamps.com/tv and never go to the post office again. netflix shares are jumping this morning you can see they are up 13%. this is all despite an earns miss, but it's because revenues and subscriber growth topped estimates and perhaps more importantly the company said it would be cash flow positive by next year. netflix plans to consider stock buybacks as well, which haven't happened since 2011. for more on how a year of consumers staying at home impacted the company's results let's bring in tuna amobi, analyst at cfra. tuna, thank you very much for joining us
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tell us right now what you thought was the biggest positive out of yesterday was it the revenue was it the subscribers was it the cash flow positivity? was it the resumption possibly of stock buybacks in the near future. >> good morning, dom, thanks for having me. it would be the free cash flow positive, the idea that netflix is now going to be self-financing going forward this is something that's been a long time coming, and really changes the way that, you know, investors should be thinking about the business model and the valuation for that matter. you know, the subscriber number obviously was, you know, wildest expectations, margin expansion, you know, international traction, all of those elements, continuing to accelerate despite the much talked about proof forward impact from last year's robust subscriber growth
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so we think the stay-at-home theme, dom, is still in place, although it's kind of starting to, you know, slightly dissipate, but the long-term looks quite promising. >> tuna, i kind of want to hit on something that you mentioned. this idea that they can be self-financing, this is a huge deal we talk about cash flow all the time we talk about cash flow positivity we said it back in the day for companies like amazon. we're talking about it right now for companies like tesla what exactly does that mean for netflix? what are its prospects what kind of possibilities does it have in the future if it's cash flow positive >> they have about $9 billion in total liquidity between cash and available revolver facility. i think the business model now really has become a virtual cycle of subscriber growth, generate revenue growth. we have the growing revenues, at least 20% for the next several years. subscriber growth north of 25
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million every year we've got about 300 to 500 basis points of margin expansion all of that translates into the ability to sustain your, you know, cash flow on a going-forward basis, which kind of eliminates the idea that there would be access in the capital markets which they have done quite frequently in the last several years something a little bit unnerving if you're an equity investor it's a big deal now to the extent they're talking about potential share buybacks it wasn't too long, about a decade ago, that they actually did that, so the idea that a company that was, you know, has had these rough patches, you know, leading up to this moment, and also the competition that we're seeing with the likes of disney plus and others breathing down their neck, it really sets them up really well, dom, as we kind of think about it the next three to five years. >> tuna, i'm looking at our web site right now the reason i'm curious is that
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the lead story cnbc.com, it say netflix and disney are trading places disney is is the upstart, netflix, the old guard is that a good way to look at it right now? how worried should netflix be about disney, a massive traditional media company and its upstart disney plus streaming service? >> i think it's a great question what covid-19 has done is actually opened up a lot, it's a runway much broader for, you know, both disney, and netflix, and i might add other, you know, companies as well. so i think the point you made is quite -- makes a lot of sense to me netflix now having this positive cash flow. we have them actually next, you know, two years, converging on an evaluation basis with disney. circles back to the whole point of thinking more of them as a traditional, you know, media company even though they are not. but based on valuation, and
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where disney's trading, we think there's a whole lot to be said in terms of peer-to-peer comparisons, so they can sustain the positive free cash flow and continue to grow their revenue and expand their margins, you can begin to make a case that the valuation metrics and peer comparisons should be very different, and you should actually be thinking of them along the lines of disney being one of their kind of neck-to-neck competitors. >> cfra's tuna amobi, always great to get your expertise. have a nice day. >> thank you. on deck for the show, we'll talk about the biden economy on trade to plans for the keystone pipeline remember that? what investors need to know about plans for the biden administration's first hundred days, and if you haven't already done so, subscribe to our new podcast, "worldwide exchange" every day in audio format. if you miss us here on air live in the mornings, check us out on apple or spotify or whatever your podcast app of choice is.
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champion your skin welcome back president-elect joe biden will be sworn into office in just a few hour's time, and his administration says it will hit the ground running, looking to push through a $1.9 trillion economic relief package. joining us now to talk about the implications, cnbc contributor, lindsay bell, the chief market strategist at ally invest, also jay bryson, chief economist at wells fargo. thank you both for joining us this morning lindsay, we'll start with you, what are the biggest expectations you have for the coming weeks here in the new biden administration >> yeah, i mean, i think the biggest thing that i'm looking forward to in the weeks ahead really is what is stimulus going to actually look like? we know what biden's plan is, but there are questions about what the gop is going to do.
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and if we're really actually going to get that 1.9 trillion or if it's going to be a little bit less that's where my eyes are focused in the weeks ahead obviously the vaccine, the rollout of the vaccine is another major initiative for the biden administration that would have major implications for the economic environment, too, so if we can increase distribution of that, i definitely view that as a positive for the market. >> what exactly, jay, does the economic environment look like we know what it looks like right now. what can we expect the economy to look like in se a few months or six months time, that the biden administration will prioritize in its first weeks in office >> frankly, i don't know how much those policies will actually impact the economy later this year. i mean, i think growth later this year assuming the deployment of vaccines continues, assuming that the vaccine doesn't accelerate or the virus doesn't accelerate from here. i think you're looking at pretty
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strong growth in the second half of the year as the economy reopens. as pent up demand for services are released the things that probably will survive in this $1.9 trillion package, things like more aid to open up schools, more aid for vaccine deployment, and development. those things are pretty small in terms of the actual economy. you know, direct steps to people i don't know if that's going to actually survive here. so, you know, again, i think the economic outlook, second half of the year is actually pretty good, even without some of this policy stimulus. >> economists like to model things let's talk about how you are modeling things right now. how long will it take the u.s. and the economy to get back to what it was like back in 2019 before the covid pandemic? >> so in our model, we have the level of gdp getting back to its 2019 peak later this year. now, that still means there's
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still going to be a pretty good hole in the economy because it would have grown over the last two years. another way to think about it is the unemployment rate. before the pandemic hit, the unemployment rate in the united states was 3.5%. it's close to 7% right now the end of this year, it's maybe at 6%. the end of next year, it's down to 5 there still will be a hole in the economy because lots of these millions of jobs that have been lost aren't coming back >> lindsey, what are the key parts of the market? what are the key parts of the economy to focus on in the next four years we had previous guests say that the renewed focus will be on things like clean energy it will be on things like financials it will be on things like materials and industrials. what exactly do you think is going to be the real focal point for investors in the coming years? >> yeah, i mean, i think i'm pretty much in that same camp. i think in the coming years, especially in the near term, which you have historically seen coming out of an economic recession and entering into the
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early stages of a recovery, is you see value-oriented stocks usually thrive, and of course we know the value oriented style of investing has lagged growth for the better part of the past ten years. so we do believe there's still opportunity, some portions of that style of investing have perked up and shown big signs of life in the last couple of months, financials and energy being two examples of that but i also think going into the new year, while the industrial sector, as well as the material sector, have from a performance perspective done very well, i think they still continue, especially industrials, continue to have opportunity on the earnings front numbers remain very depressed there, and these are sectors that are going to benefit from the global recovery where we begin to start to see other parts of the world recover like we're seeing in asia, china, in particular, in other parts of the world recover more quickly or sooner, i should say, than
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the u.s. and so i think that industrial materials with sectors that you can continue to stay in if you have taken advantage of the recent rally that we've seen there. and again, it's really going back to value-oriented sectors that doesn't mean i think, though, that technology and growth is going to be left to the wayside. i think there's definitely still some opportunity there, especially given the moderation that we have seen, the digestion that we've seen in those parts of the markets over the last month or so. and i do think that it has a specific place within our economy and within the marketplace, so we'll be watching all of that there just is probably more upside in the other areas that i mentioned. >> all right lindsey bell, jay, thank you very much for being here with us big inauguration day, really appreciate it. thanks for those thoughts. and that does it for us here on "worldwide exchange. markets right now showing some stability ahead of that big
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inauguration right now dow futures implied higher by about 75 points for the opening bell, the s&p roughly 14 points higher, the nasdaq up by 107 "squawk box" pksic up the market coverage on this big inauguration day, and it comes up next. want to save hundreds on your wireless bill? with xfinity mobile you can. how about saving hundreds on the new samsung galaxy s21 ultra 5g? you can do that too. all on the most reliable network. sure thing! and with fast nationwide 5g included at no extra cost. we've got you covered. so join the carrier rated #1 in customer satisfaction.
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good morning, it's finally the day, inauguration day. we'll take you to washington for a look at the schedule of the transition of power. cover the new pardons from president trump, which we heard about overnight. netflix shares surging as the company passes 200 million subscribers, and considers stock buybacks and jack ma made his first public appearance overnight, since his speech in october helped spark a regulatory crackdown on his companies in china. it's wednesday, january 20th,
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2021, and "squawk box" begins right now. ♪ good morning, everyone, welcome to "squawk box" here on cnbc i'm becky quick, along with joe kernen and andrew ross sorkin. it is inauguration day we are continuing to watch the markets this morning, and ahead of all of this, the markets which have been up so sharply are kind of treading water this morning. they were up yesterday, and in fact, the nasdaq was the big gainer yesterday it was up by about 1 1/2%. this morning the nasdaq's indicated up another 107 points. dow was up by about 100 points yesterday, and this morning it's up another 85, and the s&p is indicated up by about 16 points, probably worth pointing out that since the election back in november, the s&p is up by 12.8%, just a gauge of where things have gone to show you how strong these markets hav

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