about that you know, when we come to exit, we have an understanding of how to do that and we'll do it very carefully. in the meantime our focus is on giving the economy the support it needs >> thank you >> hi, chair powell. i just wanted to go back to fiscal stimulus for a second you know, we just had a $900 billion package and now congress is talking about doing more. do you expect more aid directly to consumers to be inflationary? specifically, how worried should lawmakers be about causing concerning levels of inflation >> i would say that, again, we have been struggling with disinflationary forces for sometime if you look around the world, look in western europe, look at japan, around the world large economies have felt much more

downward pressure on inflation, have fallen short of their inflation goals for sometime now. that is the broad, global macro economic confection we all live in we believe those global forces which are aging demographics, advancing technology, and globalization are still in effect they may slow down and it is an interesting question the extent to which for example globalization may slow down or even reverse not with standing that, inflation dynamics in the united states have consisted of a flat phillips curve and low persistance for a long time. we do not expect in the near term that that will change significantly. it may evolve over time but significant time these things are changing but they don't change at a rapid rate i don't believe that they will so i wouldn't -- i am not -- i am much more worried about falling short of a complete

recovery and losing people's careers and lives that they built because they don't get to work, back to work in time and things like that i am more concerned about that and the damage that will do not just to their lives but to the united states economy. to the productive capacity of the economy. i am more concerned about that than about the possibility, which exists, of higher inflation. frankly, we welcome slightly higher inflation, somewhat higher inflation the kind of troubling inflation that people like me grew up with seems far away and unlikely in the domestic and global context we've been in for sometime >> thank you steve matthews, bloomberg. >> chair powell, treasury secretary yellen in a memo to her employees yesterday spoke of the close working relationship

with the federal reserve i'm wondering how you would describe the relationship with treasury under chair yellen, if you've met with treasury secretary yellen, and/or president biden since he has taken office and, you know, secondly, about that, as you know in the last four years, there was constant criticism from the -- of the fed from the president and from other officials of the administration. do you have any kind of assurance or expectation that this will now be more of a hands off attitude in terms of commenting on monetary policy from the administration? >> okay. so i have the highest respect and admiration for secretary

yellen and i'm sure that we're going to have a good working relationship together absolutely sure. we'll also have a good institutional relationship between the fed and the treasury and i expect that'll be very good and productive. it'll be collaborative we'll work together. now, the way that works is that, you know, we know -- the agencies know each other well. this is true of finance ministries and central banks around the world we know to stay in our lanes we know we have different authorities. we know we work together on some things for the benefit of the public i am absolutely sure we're going to do that i, you know, haven't spoken to secretary yellen i'm going to be calling her chair yellen most of the time. you have to be patient with me secretary yellen i haven't spoken to her since i congratulated her on being nominated. i do expect very soon to begin our regular calls and ultimately meetings, which have gone on really for 70 years, the treasury secretary and the fed

chair have had weekly or so meetings, lunches, breakfasts, calls, depending on the situation. i expect that will happen soon i have not met the president, president biden, and just, you know, i don't have any comment on your last question. i wouldn't want to comment one way or the other >> just to follow up briefly, some 13 three emergency programs that will expire march 31 the fed and the treasury have worked on together. do you have an expectation of whether those will be left to expire then? or whether they will be extended >> i'll just say i think our facilities were very successful in supporting the economy during its darkest moments and i believe protected the loss of millions of jobs we're going to continue to monitor financial and credit conditions throughout the

economy. if the kind of emergency conditions arise that are required under that law, then our emergency lending tools will remain available now, i've had no discussions with anybody at treasury on that because i haven't had any discussions with anybody at treasury other than high level meetings with the transition team a month or so ago once we start having those meetings of course i'll observe the long standing practice of not talking about confidential discussions. as of now, there haven't been any discussions at all >> thank you reuters. >> thanks. chair powell, for doing this so a couple questions on timing. in the statement you removed the -- regarding the coronavirus -- you removed the time reference when it comes to the risk to the economic outlook. it simply now says considerable risk to the economic outlook should we read that as sort of a

positive change that we now see in sort of the end game of this down the road? or is it more that you're worried it could last longer than you expect? and related issue, have you given any guidance yet to the fed staff or system on when the fed itself might resume in-person events >> so in the statement, on the language, we dropped in the medium term because really the risks are in the near term frankly. as i mentioned, it is the roll out of the vaccine it's the arrival of new strains that are more contagious and perhaps more virulent. and those are the -- and also just the third thing of course is the ongoing spread of the virus. it's in the near term, not in the medium term. we were thinking when we're thinking medium term we were thinking of longer term scarring and things like that nonetheless, i mean, i think what -- to go to your second question, and as i mentioned in my opening remarks, there is

good evidence to support a stronger economic -- economy in the second half of this year if you look at, as we do, look at a range of private forecasters, what was their forecast in december and what is their forecast now right across the board much higher forecast for 2021 growth because of the ongoing roll out of the vaccines and also fiscal policy expectations and the reality of the cra act getting done there as positive case there but think of that as sort of the base case is a strong economy in the second half of the year. the language says that there is still -- i forget the exact language -- downside risks we use an adjective. it was considerable. considerable risk to the economic outlook there are considerable risks to the economic outlook nonetheless, that is a more

positive outlook that's really how i would parce that for you don't know when we'll come back to work. i'm actually in the echols building here today. i don't know when that'll be i mean, i can't wait to be working in person again but we have been able to work successfully remotely. we really have and we're not going to push people when they're uncomfortable. we'll wait until people are uncomfortable and wait until it's well and truly time to get back together in person. >> thank you >> hi. chair powell, thank you so much for taking our questions the fed in december eased its restrictions on bank dividend payments and share repurchases i wanted to ask what factors the fed will be looking at to determine what level banks can pay out in the second quarter and when we can expect such a decision >> okay. so we're monitoring that on an

ongoing basis, continuing to evaluate our restrictions. we haven't made a decision about whether to continue them in the second quarter or not. we're just going to look at -- we're going to look at the whole range of information including economic activity, banking activity, the success in vaccination. all of those things will go into our assessment of what the right answer is to that question i think we've been careful about rolling back those restrictions and i'm pleased with where we are. let's remember that the banks that are subject to the stress test have taken very, very large reserves very large loss reserves and also increased their capital they have higher capital ratios now than the beginning of the pandemic so the banking system has held up well here we're going to be careful about this and, you know, move based on

data and all of the data when we make that decision >> thank you edward lawrence. >> mr. chairman, thank you for taking the question. i'm interested in the housing sector home prices are rising 9% in some areas because of low interest rates are you concerned about a bubble forming there yet? and is there a price increase that you're looking at where it might change the level of mortgage backed securities the fed is buying as a continuation of that is the bubble in the corporate jet cycle more concerning for you >> housing is now, the level of the housing activity is at its highest level since before the global financial crisis in some measures so we've got a very strong rebound in housing some of the tightness in housing

markets we think just led to the significant price increases this year we think is a passing phenomena and there was a lot of pent up demand there is a one time thing happening with people who are spending all of their time in their house and thinking either i need a bigger house or i need another house. and a different house. or a second house. there is a one time shift in demand that we think will get satisfied and also that will call for supply and we think that the price increases are unlikely to be sustained for all of those reasons you asked about corporate debt i guess. >> yes just concerned if that is a bubble that you're watching. >> we monitor pretty much all of the big financial markets pretty carefully. what's happened in the corporate debt market beginning with the announcement of our corporate credit facility has been, you've seen lenders lending and borrowers borrowing.

you've seen relatively significantly fewer defaults than we expected there were a lot of downgrades and some defaults at the beginning. those have really slowed down. by the way, the same is true for bank loans banks are not experiencing the kinds of defaults we were all concerned about in the early months of the pandemic it is just not materializing they are having to reverse some of their loss preserves. corporate debt spreads are tight. they've tightened. they were very wide of course at the, during the acute phase of the pandemic and they are now the at the lower end of their typical range. we do monitor that it's not something we can control or operate on directly but we do watch those things in a sense it's good companies have been able to finance themselves during this period because they've been able to stay in business they've been able to keep their employees working.

and, you know, that is a good thing and part of highly accommodative financial conditions >> thanks. can you, since you suggested that the concern from the pandemic is perhaps a shorter term concern and why you removed some of the language, can you talk about what kind of impact you are seeing so far, do you feel that structural impacts have been -- how would you characterize those i know it's been a major concern. you talked about it at this press conference and others. do we see longer term damage to the job market or has there been some success in preventing that and compared to previous recessions how would you characterize the damage to the job market here in terms of things like, you know, permanent job loss, workers that need to shift industries, that kind of thing. >> you know, the big thing is that the jury is out

this has been a concern since the very beginning is the concern that people, if they become disconnected from the industry or the job that they used to work in, it can be years or never when they get back into the labor force particularly for people who are well along in their careers. the same kind of scarring for small businesses, which don't have the kind of resources that you need to get through this so we've had a big concern about both of those. we haven't seen as much as we feared that is a good thing but as i said, the jury is out here 9 million or 10 million people still out of work because of the pandemic a big chunk of them are people who worked in public facing jobs in the service sector. and, you know, they've gotten a lot of support from fiscal policy and some from monetary policy. but the question is, getting

them back to work. and, you know, it's harder if you're -- it takes longer empirically to find that next job if you're looking in a brand new industry it is not easy to change careers completely mid career. so that just, again, stresses the urgency that we feel and others feel at fully defeating the pandemic, finishing the job, and getting back to a place where it's safe to have these, you know, to stay in hotels, to fly on airplanes, to go to sporting events and movie theaters and all of those things so those people are still at risk and we're very, very focused on that group of people with our policy and you know the way we look at the economy. so many people have had that bridge across the pandemic we talked about that at the beginning.

for many people it is clear that they've made it across and their job is okay and their house is okay and, you know, it's been terribly inconvenient and painful and schools are closed and things like that but there's a bunch of people yet who haven't found the bridge yet and we are very focused on that. of course the other thing is we're going to a different economy. we're going to be learning more about that as we go. but, clearly, we're learning that things can be done from a remote location, learning that technology can replace people, even more than we thought. and some of that is happening. so i think as we, you know, get into this, you know, the phase after -- even after the economy fully reopens, i think we'll still need to keep people in mind whose lives have been disrupted because they lost the work that they did and i think it would be wise as a country for the longer run, productive capacity of the country, if we were to look out for those people and help them find their way back into the

labor force. even if it means continuing support for an additional period of time. >> if i could ask you a quick follow yesterday susan rice domestic policy adviser at the white house cited a citigroup study that said closing racial economic gaps could end up to -- add up to 5 million to the u.s. economy over the next years and 6 million new jobs do you agree racial disparities are currently a drag on the economy and what can the fed do proactively to narrow those gaps in incoming wealth including potentially through regulatory policy >> i strongly agree with that as a matter of fact i think if you look at either -- look at employment gaps or unemployment gaps or wage gaps, wealth gaps, home owning gaps, all of those persistent gaps that exist even controlling for many other factors, you will see they're persistent and very difficult to explain

and so the reason we talk about inequality and racial inequality in particular is it goes to our job which is to achieve maximum employment which links up with we want the potential output of the united states to be as high as it can possibly be. we want an economy where everybody can take part and everybody can put their labor in and they can share in the prosperity of our great economy. that's what we want and how the u.s. economy can be bigger, stronger, growing faster, is if we can achieve a more, broader prosperity in terms of our tools, of course that project that i just mentioned is one for the broader society, for the private sector, for fiscal policy. we have a role to play and that is how we think about the labor market principally when we say the

maximum employment is a broad and inclusive goal, what we're saying there is we're not just going to look at the headline and we never did really but not just look at the headline numbers. we're going to look at different demographic groups including women, minorities, and others, and we're not going to say we've reached maximum employment which is our statutory goal until we've reached maximum employment and you haven't if there's lots of pockets of people not participating in or not employed in the labor market. so those are the things we can do we also do a tremendous amount of research on these issues. we do -- we have such a focus on these issues now that we actually have a web page relatively new where we, you can access all of it it is a lot of activities in our division of consumer and community affairs, lots of research, and also our enforcement of the fair lending laws and things like that. so i think everybody's got a role to play here. it's a national goal and a

national job and we're just going to do our part of the job. and it's something we're strongly committed to. >> thank you for the last question we'll go to npr >> thanks, mr. chairman. you said in your opening remarks that the economy in many ways had proven more resilient than people expected. and that that reflected the adaptability of both households and businesses are there adaptations that caught you by surprise maybe related to remote work or new ways to do on site work, in person, face to face work that the economy has proven tougher than you expected at the outset of this pandemic >> well, yes so i think if you go back to the beginning, there was a real concern, i mean just take the financial markets for example. suddenly, all of those big buildings all over the -- new york city and all around the

world where people work in the financial markets with terminals and everything, everybody had to go home. they had to take their terminals with them. i think there was a real concern that there would be a tremendous loss of functionality just at the time when the financial markets were under historically difficult conditions and, yet, it worked out okay so i think people, many people in the financial sector are still working with their terminals at home including people on trading floors, on virtual trading floors some of that is reversing now. we have definitely learned that we can do more work from home in many different lines of work of course that is not possible if your job involves being at a place doing personal services for many people it is not possible and that is very much something that skews to higher income, higher educated people being able to work from home and others not so much so i think we've learned that. the other thing though, even conditional on that, when we saw the wave in the south and the

west, the wave of cases this summer, i think intuitively having seen what happened in march and april, we expected there to be a significant hit to economic activity. and people kind of just got on with their lives and dealt with it and it didn't actually -- it had a much smaller effect on economic activity than we expected then comes the fall wave which was much larger as very much forecast people going indoors cold weather all of that. even there i would say look at the december jobs report so big job losses in that part of the service sector. i mentioned 400,000 jobs in bars and restaurants, another hundred thousand in similar kinds of activities but if you go and look elsewhere, it's not having an effect you know, even purchasing manager index and sentiment index is on areas of the economy that are not directly, really directly exposed to the pandemic

in their economic activity they're doing okay they are housing is a great example the way the housing industry worked, when you buy a house there was a lot of in-person contact. they managed to pretty much immediately go to a more virtual, with all of the technology, they were able to completely avoid that and the housing market has been really strong not with standing that it's now quite virtual rather than in person so there's been a lot of adapting and you can't adapt, you know, hotels, sporting venues, movie theaters, restaurants, bars. you just, you know, those are just going to -- that is, again, millions and millions of people. and so you're just going to have to defeat the pandemic, which as i mentioned, you know, we have a plan to do that. but we haven't done it yet we need to finish the job. it's within our power to do that

as a country this year i would just urge that -- and i know people are working hard on that that is really the main thing about the economy is getting the pandemic under control getting everyone vaccinated. getting people wearing masks and all that that is the single most important economic growth policy that we can have thank you. >> chair powell wrapping up his press conference there we did hit session lows during it in fact, remain close to them. the dow down more than 600 points the low of the session down 655. the s&p and nasdaq pretty much at session lows as we speak. down 2.7% for the nasdaq the fed chair saying if we see inflation they expect it to be transient saying frankly we welcome more inflation also saying house price increases are unlikely to be sustained the whole focus on an exit of the current loose policy is premature. he wouldn't be drawn on gamestop

but did say they're not looking at raising margin requirements and said the link between low rates and asset values probably not as strong as you might think. which is a good talking point for us today and our panel which i am able to bring in now. the chief economist at the conference board, the chief market strategist at jeffries, and the former pimco chief analyst and adjunct professor at the school of business i'll come to you first, paul whether it is frothy action in the stock market or house prices chairman powell not be suggesting any point when they will exit this current loose policy stance. would you expect anything different? >> no i wouldn't he really stressed his sole objective is getting this economy back to full employment. mche said we are a long way, i like that phrase, from there he put a number on it.

the bottom line is we are in a good place we plan to stay exactly where we are. we're not going to change until we've got full recovery, which means that we need to recapture that 9 million, 10 million jobs along with other things but that is his focus and i thought he did a great job. >> maybe the market just wants more always wants more, david which is hard to believe because they got him on easy street for a long time. i thought his comments on the markets were the most notable and the most tricky for him. he has not taken any responsibility for asset bubbles, for what's happening with gamestop, what's happening with anything. what did you make of him saying the link between rates and asset prices is not so strong and this is a market being driven by vaccines and expectations of fiscal policy? is that right? >> i think he did a lot of deflecting there i doubt you can really, you know, divorce monetary policy

from asset prices in any reasonable way certainly over the last year. an important driver coming from monetary policy. whether that is part of this story where short sellers that are in stocks could have very high levels of short interest -- and there are some targeted attacks on them i'm not really sure monetary policy has much to do with that i think there were some successful attacks now they're going after more that is really some guys being a little bit irresponsible with leverage and thinking about leverage on the short side which happens all the time it happened in '98 with long term capital a much bigger and more important deal, it happened with housing bonds in 2008 and here we're seeing these small stocks get targeted to create not even forced sellers forced buyers but still forced transactions that are unpleasant for someone. i don't think that is a monetary policy he didn't get drawn into that.

i'm happy he didn't. because that is not true to say the overall level of asset prices is divorced from monetary policy is a little disingenuous >> everyone stay with us we want to bring in cnbc's economics reporter steve liesman who did ask that market question steve, doesn't seem particularly worried about asset bubbles or higher inflation or anything else popping up in the market conversation >> no, i think you're right. there are two parts to powell's answer that are worth talking about. the first,the comment that he thinks it is over stated the connection between asset prices and monetary policy. the other part, though, goes the part about where he says, you know, what else would you have us do? we're very focused and i think the summary was excellent at the top of the segment where will talked about the fed's focus on getting the economy back to where it was he has blinders on on this issue. he is not going to be pulling the trigger any time soon on

trying to either reduce the actual monetary policy or the expectation for monetary policy remaining easy for a while i think maybe it is worth while sara if you don't mind for a second to play the part everybody is talking about right now. >> there are many things that go in as you know to setting asset prices so if you look at where it's really been driving asset prices really in the last couple of months it isn't monetary policy. it's been expectations about vaccines it's also financial -- fiscal policy >> and then he followed that up by saying, look. not clear what we otherwise should be doing here we have a job to do which is to get the economy back up and running and how would it help to actually be raising interest rates? >> steve, thank you very much for that dana, to what extent is there a chance he will in fact have to change his tune which is clearly very resolute as we've all been

discussing over the last couple meetings that he might have to change his tune if not the first half of the year early in the second half of the year if the vaccine roll out and fiscal stimulus both arrive sort of as best case scenario could suggest? >> well, certainly those two things are outside risks to the outlook and in our own forecast we have expectations that there is going to be a surge in activity consumer spending and potentially hiring toward mid year, second half of this year also associated with many people having access to the vaccine and potentially also taking the vaccine which is a key element then also adding in the potential for some elements of the $1.9 trillion stimulus or fiscal support package the current administration is talking about. so certainly if, i mean, if we see growth expectations rise and also labor markets responding to that, then potentially the fed might have to become a little

less dovish maybe slightly hawkish. again, powell mentioned even if the fed sees some minor increases in inflation or even in pockets of areas of certainly with respect to tourism or travel or certain types of services that the fed is not going to jump on that and see that as a reason to necessarily lighten up on the peddle of fiscal accommodation but certainly would see those things as transient and so i think again the big issue is getting the 9 million people back to work and certainly, you know, fiscal stimulus may not necessarily get us there but certainly the vaccine roll out and having accessibility to the vaccine could get us there >> paul, can you explain to people how -- and this is really what powell's key message was -- how keeping up their current super aggressive, easy policies, are helping the economy achieve his goals.

how does buying $120 billion worth of assets every month help the 9 million americans he said that need to get back to work? >> i think there are two things going on number one, in and of itself, accommodating monetary policy creates an atmosphere of growth but more particularly i think this is the really key point is that super accommodating monetary policy provides an invitation to the fiscal authority to go big. to go as big as possible so i think the benefit of the super easy monetary policy is just not the direct channel but effectively enabling, accommodating, and encouraging the fiscal channel to do what it needs to do. so we should look at this as a combo of monetary and fiscal policy that is going to get us back to the promised land of full employment.

i would not look at it in a narrow sense but a broad sense, sara >> david, despite the fed chair deciding that his policy doesn't influence market levels earlier in the press conference i think we all know that last march had he not acted we could have seen a more profound sell-off and a less swift rebound than we did see. if we get another big sell-off the next couple months, no one is saying we were, but were we to do so, is there less he could do this time around or nothing he could do to prevent it proliferating? >> absolutely not. i mean, these guys have more ammunition than virtually any other central bank out there if you look at the size of the balance sheet and the percentage of the economy it is still one of the lowest in the g7. in europe ecb is balancing 65% of gdp in switzerland a hundred percent. japan 130% in the uk i think it just broke 40%. we have a pretty small balance sheet as a percentage of gdp

we could go a lot bigger than 120 a month. we could bring back the corporate bond facilities, janet yellen certainly signed off on that dig deeper into the municipal side which i think, you know, there's probably some tweets to make that a little better the next time around just like any facility that comes quickly. you can learn a little bit about it so i think they have a lot of ways to get involved with distributing stimulus more evenly, more fairly, more robustly across the economy. and really reacting quite strongly to any problems of vaccine rollout or resurgence and strains that can't be tackled by the vaccine the back stop is fully there i don't see anything he said or anything structurally that makes you think different. >> we will leave it there as the sell-off picks up steam into the close. thank you for joining us a special fed panel. we have about 25 minutes left to

go before the bell take a look at where we stand. we are making new session lows as we speak. down 660 points on the dow the s&p 500 is down almost 3%. 2.8% really hard hit groups today like communication services, materials, consumer discretionary all down at least 3% but every sector right now is lower. coming up we have big earnings reports. also coming after the bell facebook, tesla, and apple we'll break down all the numbers with aaln l star panel coming up on "closing bell." i'm going to start the bidding at $5. thank you, sir. looking for $6. $6 over there! do i hear 7? $7 in the front! $7 going once. going twice. sold to the onion lover in the front row! next up is lot number 17, a spinach and artichoke dip, beautifully set in a hollowed-out loaf of sourdough bread. don't get mad get e*trade and get more than just trading investing. banking. guidance.

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the dow is down 700 points right now looking at session lows jay powell just wrapping up his news conference. let's get to mike santoli for a look at the markets. was it something he said, mike we were lower heading in >> i can't pin point anything in particular he said really just a status quo story in terms of what message he delivered there. the selling started before him we've been talking about a lot of the wild action in some of the trendy story stocks. the question was would it cause portfolio stress elsewhere and a need to reduce risk across the board. that seems to have taken hold this morning because the wild stocks have just continued to spiral higher and it seems like it is prudent to take some money

off the table more in general. i've been talking about this really sort of tight, orderly uptrend since late october we haven't had anything more than a 2%, 2.5% pullback this is a little crack in that trend. we are now below the very short uptrend, 20 day moving average if you care about the short term tactics this is a sit up and notice that maybe in fact we are no longer in this very sort of calm backdrop even though we haven't really broken through anything of much importance here we're still flat on a year-to-date basis a little lower on the s&p. some of the crowded, long stocks, these areas of the market that people really did have built up profits and they have actually started to roll over and there was a loss of momentum and things like the high etf, semis. guru is an etf that tracks holdings of big investors through 13-f filings so a lot of those kind of brand name investors. you see big rolling over activity here. the s&p much more modest action. it shows you that part of this sort of purge, this repositioning is under way and

has been for several days. didn't want to -- did want to point out the inflows into equity funds on a three month basis record all time record. it looks a lot like this in early 2018 the point here being, you know, we keep talking about how the retail traders out there are hunting the shorts and hedge funds are heavily -- hedge funds are not heavily short. this market does not have much of a short base. they're finding all the crowded shorts but in fact people are positioned rather long that's been another message into this year. it seemed like yeah we got great technical trends this is very well supported market by credit but sentiment and positioning just looked like it was a little bit over extended we'll see if just this kind of a pullback might be enough to try to cleanse some of that. >> mike, i guess this final chart here discounts somewhat the point a lot of people use which is that cash balances at record highs, fund levels very high. >> you have flows this strong, it shows you people are fully exposed and allocated to equities in general.

>> mike, thanks so much for that we're down about 3% both the nasdaq and s&p down more than 3% moments ago. at that level. so the dow is down 700 points. apple, tesla set to poftrert aer the close. some of the key metrics to watch next in the market zone. re inv ee fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. your grooming business is booming. you need to hire. i need indeed. indeed you do. the moment you sponsor a job on indeed you get a shortlist of quality candidates from a resume data base. claim your seventy-five-dollar credit when you post your first job at indeed.com/groomer

sales are down from last quarter but we are hoping things will pick up by q3. yeah...uh... doug? sorry about that. umm... what...its...um... you alright? [sigh] [ding] never settle with power e*trade. it has powerful, easy-to-use tools to help you find opportunities, 24/7 support when you need answers plus some of the lowest options and futures contract prices around. don't get mad. get e*trade and start trading today. 15 minutes left in the trading day. commercial free coverage of all the action going into the close. mike santoli is here to break down the crucial moments of the trading day. we also have the management ceo

josh brown back as well. josh, you're on camera kick it off with the broader market and stocks are tumbling seeing the dow down 700 points right now. every sector lower in the s&p 500. we are looking at a decline of 2.86% the nasdaq down almost 3% ahead of key earnings and earnings is a big theme, mike. you talked a little bit about maybe more, wanting more from the fed and the focus on the short squeeze positions and potentially that weighing on portfolios and getting out of long but look at some of the earnings reaction especially in the semis and even microsoft not much of a bounce there hasn't been acting too well off earnings >> for microsoft in particular we did see after hours pop it was higher in the morning and i think just got swamped by the general selling pressure across the board. people reducing some of these favorite stocks that really have no short interest and really are essentially just about pulling risk levels down

semis is an area where you built in a tremendous amount of presumed growth for a very long period of time, an out performing group for a while started to act not so great. i don't think it is about the numbers but share prices and how much they've gone up relative to how much better the numbers can get from here. it is part of the story and i think part of the general idea that, you know, the good news is not really coming as much of a surprise to a market that was up coming into today like 18% since halloween. >> josh, on that point, let's stick to it, some of the moves pretty significant netflix down 5%. alphabet due to report this week down five. facebook down four what do you make of the size of those moves? and also microsoft as sara mentioned which clearly jumped 4% but now red >> yeah. i just think we all need to pull the charts back further and just recognize. you're talking about semis down 7% after doubling. i think we need the context of, yeah this is not a great few days

even if you look at a one-year or three-year chart there is even more room for the stocks to pull back and still be in an up trend definitionally i think that is the right way to consider what we're seeing right now. you know, the rumor was earnings beats. the news turned out to be earnings beats okay i think you have people with profits taking them. it happens all the time. one interesting thing to consider, though, away from earnings, is just the fact that we might have been at least temporarily swamped with more supply than we can actually with stand. we might need to consolidate the fact this was the biggest january for ipos and january is not over yet in 30 years not just spacs, actual issuance of businesses too. the whole combination. december was almost a record and november was a big month you have a lot of supply i also noticed that secondaries are ticking up that is an entirely new phenomenon we were debating buybacks as

recently as a year ago now we're seeing secondary offerings in large numbers do we have too much supply that to me is more relevant than good earnings reports being the catalyst for a sell-off because that really wouldn't make sense. >> s&p down 2.6% having been down just more than 3% 11 minutes left of the session to gamestop and wall street bets attempt to take down certain hedge funds. >> it's wall street versus wall street bets right now and reading through threads and threads on red-it is clear the retail crusade has two priorities number one of course profit but secondary to that is to blow up hedge funds and profit from their demise the trade they discovered was to pinpoint heavily shorted names, enter gamestop here, and force the bearers to buy back their stock at higher levels efek collating a squeeze. they were successful melvin capital was a near casualty of this before it found rescue financing from two other

hedge funds. sit ron covered its short at a loss today and i'm told other hedge funds are in a similar boat as those guys some billionaires are cheering on the retail investors. >> retail has been the bag holder before. retail hasn't caused thao esthings before. hedge funds have if you're going to take about taking the gun from the baby make sure we figure out who the baby is. >> yesterday he closed his position in gamestop today one can assume it was a very profitable trade for him. guys >> he seemed to allude that way. leslie, thanks stick around for the chat as well a great interview. mike, he framed it the same way as leslie sort of did in a tongue in cheek way which is wall street bets versus wall street but is that actually a fair way to frame it? is it more wall street bets versus a niche part of wall street >> yeah. >> that is actively shorting stocks which is actually not something that most people

participate in doing >> right t is interesting if you look at the kinds of stocks caught up in this. the only ones where you did have an entrenched short base, because they were thought to be structurally impaired businesses, it is a lot of the old chain retailers. amc, which has been on bankruptcy watch for a while before raising capital it's literally blockbuster's shell equity that trades and has been in bankruptcy forever i think the reason for that is those are the areas where you did have professionals confident to be playing to the further down side. i don't think there are any heroes and villains here this is what goes on in markets. people try to be opportunistic when there is lopsided positioning one way or the other. i think it's fine. but to pretend it is some kind of public interest or noble cruise aid going on here i think it is amplifying it beyond what it is. it is a squeeze, a stampede, a raid, a chase. momentum picked up beyond what people probably thought it could and it created all this rhetoric

that, hey. we actually have a huge, long term noble cause we're fighting here >> yeah. i mean, if -- it is picking a side which you're not doing obviously but people are orrin the side of the retail traders or cruise aiders or i guess the side of wall street and hedge funds. there are calls for the ftc to take a look at this and potentially step in. what could be done what is going wrong here >> that is kind of what's unclear at this stage. you can bet across wall street the hedge funds are lawyering up and having very highly paid white collar law firms looking into this to see if there was any unscrupulous activity on some of these platforms with regard to trading. if you just kind of comb through them it is hard to really distinguish what they're doing is any different from a bunch of hedge fund managers getting together over dinner and talking about their ideas and then going back to their own, you know,

trading desks and effectuating them the rules around this are a little fuzzy and the fact they are such a disparate group of retail investors having these conversations with anonymous names makes enforcement all the more challenging so we saw the pause on the trading platforms today to try and stem some of the frenzy here in terms of actual regulation it will be interesting to see what occurs if anything >> josh brown, if one or two hedge funds perhaps more than that are really, really hurt by the last week, can that derail the broader markets? because it causes a temporary liquidity squeeze? >> >> i think people would benefit from understanding that. as new and novel as it seems it really isn't anything new. in the 1990s there was a message board darling called io megamaybe the first of its kind on yahoo finance message boards.

they took the stock from a dollar to like $30 there were people fundamentally short. herb greenberg probably remembers their names. it wiped people out. had nothing to do with whether the market would soldier on. i think i'm not rushing to pick a side and wave a flag but i'm definitely more sympathetic to what he has to say the reason there seems to be an uproar this time is because the wrong people made money. i don't like that stuff. i'm a man of the people. i like that some kids living at home with their parents or traders really risking money they couldn't afford, i like they won this one and i hope they win another one if there is manipulation, wolves in sheep's clothing, hedge fund operators involved stoking and orchestrating specific manipulation against their rivals, i suppose it could -- it's taken place on billions to show i suppose it's possible.

that is not for me to figure out or for you that is like regulators will look at this there is too much trading volume and too much volatility for them to ignore it i just would keep in mind we've seen versions of this before i really don't see the big difference between in and an ideas dinner other than the amount of people being invited to the table i would just try to have an open mind about the fact that most of the people who are buying game stop and blackberry and amc are just people that finally saw an edge that other people were taking advantage of and jumped in and said, me too. are we going to start walking kids >> i think people are just saying, oh, these may not know what they're getting into here if you look at how much volume has occurred in the last few days in gamestop, yes. somebody owned it from seven somebody owned it from 17 a few weeks ago. but a ton of volume happened above a hundred and now above 300. so so the aggregate cost base of the people trading this thing or

the options is pretty high at some point a trap door opens. maybe there is some reason it goes down. i'm not saying people should be protected from themselves at all but i think that is why nobody is really saying it is nefarious, just saying it is either misguided or has kind of over stepped some kind of guard rail >> that is a good point. should the guard rail be at the exchange, the broker dealer? should it be -- >> i don't know. maybe that should be something you know, one thing that i also think is interesting, a lot of people took up trading this year i think 10 million repail brokerage accounts opened like brand new people they don't exactly have to take the civics course to put money into an and start trading. >> no. >> i think there are probably statutes about manipulation and fraud and painting the tape that a lot of these participants aren't even aware of now, ignorance of the rules is not, you know, necessarily going to get you out of trouble but i just think there are people who

see their friends doing something on tiktok and they go to do it, too, and it works. they do it again they do it again i agree that at some point it won't work but that time is not right this second from what i can see. >> that's fine >> yeah. >> i think the other question, guys, is what the consequences are. when you have people telling you their friend's nanny bought gamestop yesterday because she heard that was an exciting play, what happens to that how do they know when to get out and that they're buying on zero fundamentals >> they won't. >> right >> they either get lucky or lose the amount they can afford to lose hopefully. >> yeah. i agree. i think you are seeing probably the most vocal of the regulators will be galvin from massachusetts. that is historically the state of massachusetts has been extremely protective over its states residents in terms of this type of thing

i would be shocked if there is not a press conference at some point but who knows who is really on those boards and if everybody is who they say they are or aren't. like it is impossible to know. >> i also wonder if people take the profits from this trade and put them toward other similar trades i think people see this almost as a virtual arbitrage right now. targeting stocks that are heavily shorted. driving up that squeeze. and then benefiting from that. clearly, you can see amc up 291% definitely falls in that category today as in a large way, a result of what people have seen with gamestop >> the only final point -- >> leslie, somebody has to be on the other side of the trade though >> we'll come back after the close. it's not really bets against the establishment but against one or two or three hedge funds really feeling the pain and the rest of us all just watching as the broader market showed down 2.5%.

only a few stocks that are up so aggressively today there is gamestop up 133%. mike, internals. what are you seeing? >> they're kind after mess first take a look at the up versus down volume in the new york stock exchange which tells you an incredibly misleading story today because it looks, there is more volume to the upside than the down side. amc, new york stock exchange, traded 1.1 billion shares and the stock is up. that is inflating that number. look at the number of stocks that are up versus down today on the new york stock exchange. it is very lopsided to the down side of course in aggregate the amount of dollars up versus down is definitely skewd to the down side it is clearly a little wash out. the volatility index has popped above 30 it had not done that this month yet. that looks like it is threatening for an up trend so you see the agitation show up in that market as well. >> just 30 seconds left. the s&p 500 is down 2.6% it had been down 3% about 20 minutes ago. the nasdaq is down 2.7%. have been down just over 3%.

the dow is down 670 points it was down 730. that is down 2.2% currently. all 11 sectors are lower communication services at the bottom, we await earnings from the likes of facebook, which is down about 4% or 5%. alphabet down 4% or 5% also. of course the likes of gamestop up hugely today 135% at the close though sara down 2.5% from the s&p and the nasdaq down 2% on the dow a little bit of a pop saving 20 basis points or so at the close. >> we have gone negative for the year on the s&p 500. welcome everyone to "closing bell" if you are just joining us i'm sara eisen with wilfred frost and mike santoli cnbc senior markets commentator xxxx ugly day on wall street for the bulls. finished down just off session lows as we saw in the final hour of trade, a little over 700 points down after fed chair jay powell's press conference though

we were lower heading into that as well. s&p down 2.5% on the close every sector got hit today some of the hardest though communication services, consumer discretionary, health care, materials all down about 3% or more there is the nasdaq down 2.6%. and the russell 2000 fared better than the others small caps only down 2%. we'll talk about why, whether it is related to the short squeeze we've been seeing in names like gamestop and amc which continued to surge amid the sell-off get ready for a wild ride. we are moments away from earnings, from apple, facebook, tesla. las vegas sands. levi straus, and whirl pool. instant analysis coming up straight ahead let's talk about the market. josh brown still with us first though i will send it to you, mike. on that question, does the action we've seen in some of

these names capturing all the attention incredible stories like gamestop and now amc entertainment does it have to do with a broader sell-off, fears of a bubble, potentially people liquidating long positions >> i don't think necessarily in itself it shows fear of a bubble it sends uncomfortable vibrations through the market. it is a prompt to assess risk levels if people are getting hurt on the short side you'll sell some stuff you own on the long side or just in general reassess your conviction level on stuff that seemed like a crowded position i think all that stuff is going on but also the backdrop being we had a market that was kind of, you know, around near the highs. we did have sentiment positioning. very, very, you know, stretched coming into the year the question was always, the news is all good what is going to knock this market off course? the answer is usually something comes along. so this for now is just a shake out in an up trend we'll see if it develops into something more it shouldn't surprise anybody that you do have a little bit of spill back when we've been kind of ratcheting higher in a steady

way for sometime >> the other thing happening for the last few trading sessions but notably today as well was the ten year yield pulling back close to 1% again. well off the highs it touched ten days ago or so what do you make of that >> that can change very quickly when we get a look at j & j's virus data next week which your guess is as good as mine but i think it is solely related to the death toll, infection count having fallen off but not by much and then all of the talk of new strains. if you think about what is the push and pull, on a ten year treasury yield, it is the virus and the will we or won't we have an actual reopening this spring or is it wait until summer that's my best guess i don't think it has anything to do with what the fed is talking about because that seems status quo. i think that's what we're thinking about when we're thinking about yields and the cyclical bet over all.

>> the fed did, jay powell and in the fed statement did note the moderating in the over all economic activity that we've seen in recent months. we've seen in the jobs data, some other data. we just saw the biggest one day percentage drop for the markets since november 28th. do you think it is in response to that in any way the fact that our economy is stuck here and heading south until we can get more people vaccinated and at least fight this pandemic? >> yes yes. because one of the biggest supporting conditions for the new highs in the s&p 500 were coming from the industrials, value stocks, energy stocks, materials. all of that stuff having this reawakening over the fall and winter we're going back to lockdowns in certain areas of the country and it seems like we're going backward that has an impact not only in

sentiment for stock prices but consumer sentiment so it seems like virtually everything is cooling down somewhat until we get this new stimulus money out the door and more clarity on how likely it is people will get vaccinated we might be stuck in this place we're in and a lot of things powering the market to new highs recently are not contributing. i think that is exactly right. >> we're waiting for facebook, apple, tesla earnings. what is the response to microsoft's earnings >> i think just bad timing to be honest certainly the bar is relatively high but in a flat tape microsoft is probably up a few percent today. i don't know that you want to extrapolate the reaction more broadly. but faang seems like everyone expects the numbers to be great. i think people looked at microsoft's results and said amazon should be very good very difficult to handicap in terms of where the leaning is

going into some of these numbers. but i wouldn't necessarily take today's reaction to microsoft to be, you know, the template >> can you just hit the vix mike a lot of people were talking about it it went over 30 today. 32.25 is where it closed a bit of a surge, a fear trade obviously it goes up when stocks go down. >> it goes up when people are more willing to pay a higher price to protect themselves against further losses and when they anticipate volatility is going to remain high or rise all of those things fed a higher vix today because it seemed like again the overall up trend took on a little bit of water today and you have all of this very, very jumpy activity and all of the stocks we're talking about and it filters through more broadly to the market. so i don't think that right now it is about the trend. if we're going to stay in an up trend that is going to take this, the vix above 35 from here, that's probably not a bullish thing but i also don't think it is a magic level. >> just want to jump in.

sorry josh one second on facebook numbers just coming out for the fourth quarter. revenue coming in at 28 billion for the three months the end of the year the forecast was for 26 billion. eps coming in at 388 the forecast was for 322 so a nice beat on the bottom line small beat on the top line daily average users coming in at 1.84 billion the forecast was for 1.83 billion so slight beat. monthly active users 2.8 billion the forecast was for 2.76. i need to keep digging through on the rest of it but seeing quite a big drop haven't got to the guidance. maybe julia boorstin has that or other aspects of the numbers for us trading down 4.5%. >> yes it did beat on the top and bottom line but pointing to the outlook commentary the company is saying we continue to face significant uncertainties. we managed through a number of

cross currents in 2021 they say they believe the business has benefited from two broad economic trends the first the shift toward online commerce the second a shift in consumer demand toward products and away from services saying these shifts provided a tailwind to the ad business in the second half of 2020 but they say that in the first half of 2021 they will be in a period of growth negatively impacted by negative advertising so they expect year over year growth rates to remain stable or moderately accelerates sequentially in the first and second quarters and also increasingly strong growth which will put pressure on year over year growth rate the stock is down nearly 5 per they warn we expect to face more significant ad targeting headwinds in 2021 including impact of platform changes one other key thing here they note that there will be a buyback saying that in january the board authorized share repurchase of an additional $25

billion so that is in addition to the $34 billion that was previously authorized. guys, back over to you. >> julia, thanks so much for that just looking at the full year numbers quickly, sara, to throw in one more bit of analysis total cost and expenses 53 billion for the full year 2020 and in the guidance line saying we expect 2021 total expenses to be in the range of 68 billion to 73 billion have to get an analyst's take on whether that is more or less than expected but a hell of a lot more year over year that forecast for '21 versus '20. >> yeah. they're going to spend in technical and product talent as well as continued growth and infrastructure cost. for more let's bring in an analyst, the analyst at mkm partners with a buy rating on facebook which is now down 5.25% after hours despite overall better numbers. it's that warning do you think on the headwind, the cross

currents like ad targeting >> yes, absolutely it was a very, very good quarter. they are reporting 34% plus and revenue growth that is above and beyond what most of the bullish estimates have seen on this. the smaller portion, the reality piece of the equation is getting bigger and that is very positive margins are expanding. all key things are in the ruth direction. but the ads are getting headwinds. i think the commentary on the call will be interesting and particularly around all the rhetoric around apple versus the free internet. the idea of headwinds -- what it could mean for small businesses. i think it could be serious. although they are -- i think

what happens is something that uncertainty is spooking the market overall really, really good numbers. >> yes. >> guidance unchanged. so i like what i see so far. >> we're going to come back to you in a second with facebook down 6% or more after hours because tesla numbers have also just come out. we want to get to phil lebeau with those >> reporter: sara, let's look at what is going on with shares of tesla. on the top and bottom line on the top line you've got a beat of $10.74 billion in revenue but the bottom line in terms of earnings per share it was an earnings of 80 cents per share that is shy of the estimate, which was for the company to earn $1.01 per share in the fourth quarter we're going through the report right now and don't have the number yet what guidance does the company give for deliveries in 2021. last year they delivered roughly a half million vehicles. just shy of it

that was their guidance. they hit that. now what are they planning on delivering for 2021? the analyst's estimate is for 796,000 vehicles still looking through the release right now. as soon as we have a number or something to report on that we will let you know. >> as always thanks so much for that tesla down 6%. also a reminder facebook down about 5% 5.8% in after hours. some of the other social media stocks down in sympathy. twitter, pinterest jessica, either facebook or tesla, whichever you'd like to comment on first >> i got to say that the company that explains the facebook result i think you have to look at apple on two fronts first, the warning on the headwinds on ad targeting directly aimed at apple's changes in the platform. and, also, the spending. new tech, new talent that is the arms race coming with apple around a.r. and v.r so very interesting given

obviously the strong quarter but investors are paying attention to those two threats and i think apple is behind both of them >> is it a buying opportunity as it has been in the past whenever facebook warns of headwinds coming that is going to pressure its business and puts out a quarter like it just did >> so i think with facebook what is interesting is they don't really have an issue fundamentally. they're still making a ton of money. the issue is more on optics and the overhang for what people think might eventually happen on the regulatory front the problem with that as a bear thesis is that's always been the case we've been talking about that more regulation, more regulation for years now like since before the 2016 election. that's been a supposed overhang. so if you are somebody that missed facebook and you want to get in, typically after an earnings report when you've had a sell-off that's been the way to do it that being said, one last word of caution at the end of the day here is what is inescapable.

90% of facebook revenues are advertising. 50% come from the united states u 25% come from europe those are the numbers. that's not changing. don't tell me about augmented reality. those are the actual numbers and facebook by the way unlike tesla topped on like august 1st. facebook is like seven months since its last record high tesla being down roughly the same amount after the close keep in mind tesla was 650 a month ago. so these are two very different setups for investors and that's the way i would phrase it. >> and the gap is widening a little bit with facebook down 3% and teas tes la down five. we've got earnings to hit. more of them levi straus. welcome with those numbers >> reporter: hi. thank you very much, sara. good to be back. we have earnings fourth quarter for levi and it is a beat on both the top and the bottom line levi reporting 20 cents adjusted

for earnings per share better than the 15 cents analysts expected also revenues beating at 1.39 billion better than the 1.34 billion analysts expected that is still net revenues down 12% but a sequential improvement from the quarter before when revenues were down 27% you know, levi sells in its own stores and in wholesale partners wholesale revenue down 15% direct to consumer revenue though down just 5%. if you look at the global digital revenue, so levi is being sold across platforms all around the world, those were up 34%. gross margins up 100 basis points the company saying they had a higher proportion of sales in the higher margin direct to consumer channel lower promotions and healthy inventory with inventory down about 8% i had a chance to speak with levi's ceo chip berg briefly and he said when the pandemic hit, we were running the business off three different scenarios. worst, middle, and best case

we beat all of our internal expectations and came close to hitting on a best case scenario. our plan was to emerge stronger when we went into the pandemic and i think all indicators are that we are emerging from the pandemic and will emerge stronger the company is going to give guidance on the call so we don't yet have that. shares are down about 2% here after hours after initially moving higher on the results back over to you >> thank you so much we have one more just crossing the tape las vegas sands. contessa brewer has it. >> las vegas sands is still hobbled by coronavirus impact showing a miss on the top and bottom lines revenues at $1.15 billion. consensus was $1.25 billion. the eps comes in at a loss of 37 cents versus the -- that is adjusted versus the 32 cent loss per share expected and the all important metric in the casino industry, adjusted property ebitda. this is earnings before interest taxes and all of that. sands adjusted property ebitda

is positive a gain of $141 million. really supported here by marina based sands in singapore mccaw missed those estimates and las vegas shows a $50 million loss when what was anticipated was a gain of $4 million or so sands has been paying all its employees through the pandemic no lay-offs. the newly named chairman and ceo rob goldstein joins me tomorrow for an exclusive first interview on "power lunch. the stock is up more than a percent in extended trading. probably driven in part by that positive ebitda number >> thanks so much for that josh brown, final words. big movers today during the session and after. any of them pulling back of companies you liked long term and be looking to top off on >> how about i leave you guys with a trade in a name we almost never talk about if you think this is just the start of a new wave of volatility, the name to watch is

virt i do not own the stock yet this is one of the premier, high frequency trading houses does very well with increased volatility look at the back flips this stock did back in january, february, march of 2018. that's the type of move the stock makes if you think we're in for another real correction i'd keep an eye on that one. >> good tip josh brown thank you. jessica, we'll see you in a few for apple in just over ten minutes. rohit, thank you all for joining us we are just getting started on a huge afternoon of earnings up next whirl pool's ceo joins us to discuss his company results just out on the tape better than expected plus we will count you down to apple's earnings wall-to-wall coverage of those numbers coming up back in jujust 90 seconds

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changes lives everywhere. everywhere. everywhere. everywhere. everywhere. facebook is trading lower by only five basis points now off the lows about 3% or 4% low. >> wilf, facebook posted its slides and in there, especially in the much focused on u.s. and canada regions they showed daily active users actually declined by 1 million sequentially the second straight quarter of declining daily active users in north america after reporting five quarters of gains but monthly active users in the

u.s. and canada actually gained by 3 million so sort of mixed numbers there obviously the daily users in particular the focus one other thing to point out is facebook specifically calls out apple in their battle over the new operating systems as one of the ad targets in the year ahead saying the impact of notely ios-14 will have a significant impact saying timing remains uncertain. we would expect an impact beginning late in the first quarter. now the stock is up fractionally >> despite some of the uncertainties on the outlook julia, thank you julia boorstin facebook up 0.5% after hours. whirl pool shares are falling down more than 5% after just reporting q4 earnings despite the company beating forecasts on earnings and revenue joining us now is whirl pool ceo marc bitzer. great to have you on why do you think the stock is

down the moderation and growth you expect for the full year versus the kind of numbers you're seeing now >> first of all, thanks for having me back during the day we were almost closed at an all time high, like 40 cents away. i'm looking more at daily volume the after hours, based on what i heard before seems to be we're in good company. great numbers. beating all of the numbers we give an upbeat outlook and the after hours down i am not quite sure how much i would read into it the fundamentals are strong and our share price this year has already been up 20%. >> part of that is on the back of the trends like we just saw out of your company. people just investing a lot in their homes and new appliances and moving and all of those tail winds helping your business? >> we see very positive demand trends i'm not quite sure what to call it still actually we see sustained, strong momentum.

i think what has changed in the last couple quarters is the nature of the demand has changed. we saw initially in q2, q3, more distress covid purchase. you were asking for freezers now even more so we see significant mix trending up. you know, people are not just fixing but remodeling, rebuilding, buying, building a new house. we see a structural shift of demand not just in volume but in quality. from everything we see today we are very upbeat about the demand not just for the short term but the medium and long term >> as you look globally at the outlook which markets are going to be the biggest challenges in 2021 and which are going to be the biggest gainers, biggest opportunities for you? >> from a consumer perspective i know it sounds very -- i am very upbeat about the u.s. because beyond the covid demand trends

you also have the added housing trends, hard to argue against, very bullish in u.s. housing coupled with the general home improvement trend a double whammy we've seen very strong trends latin america. europe is solid but not as strong as north america and latin america. india has been subdued because of severe lockdowns but india has been coming back globally we would expect next year 4% to 5% growth in volume with the u.s. clearly above that >> marc, great to have you on to react to earnings and talk us through it the stock is off the lows down a little more than 4%. marc bitzer ceo of whirl pool. >> tesla earnings out moments ago the stock down 4.5%. dan, good to see you as always what is your take on why we're trading down and what are the key things you're looking out

for in terms of guidance and the analysts -- >> i think it is knee jerk reaction i'd call this an a plus quarter in terms of course deliveries but also profitability when you look at core margins it is all about that 750 to 800 k guidance through the year in terms of deliveries. i ultimately think that could be upside potentially 850 or more right now we're 3% penetrating ev they continue in the ev market i tell you this is the golden age of bullish political backdrop this is something the bulls ultimately it is a feather in the cap knee jerk and many view this as a green light. >> thanks very much for that quick take on tesla which is trading low by about 5% after hours. dan will stick with us and join us for apple earnings reaction >> up next, apple's earnings moments away the stock has ramped up more than 10% in the last week.

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minutes from apple's quarter holiday quarter standing by to break down the results dan ives, give us the quick and dirty on what you expect >> i think these are the numbers, if it is a super cycle, we believe it is in terms of iphone numbers could be by 1 billion to 2 billion in terms of overall

revs going to the next few quarters i believe this is going to be the biggest product cycle that could be ever. it is a rerating i believe a year from now looking at a $3 trillion market cap. >> what is the stock down in recent weeks coming in >> just had a little spurt up to a new high just back up recently and the big question is, is the market going to be hunting for the big, reliable cash flow stocks like apple if in fact we have turbulence here or is reel u the bar this high? >> ed what are you watching beyond the new 5g phone? >> i'm actually curious about what the average selling price is going to be, if they are really going for the lower priced ones or if the super end ones were selling. aside from that services, it's always been the thing that i look more closely at the second largest business talking about cash flows, services at 67% margin business.

the more they build on that and add more things they added fitness last quarter and announced it last quarter so getting a better look, better read on that will be a key sign. >> a few second away apple closed lower today it is still up about 7% so far this year. participating in the sell-off has been a strong stock so far as a lot of the nasdaq has it is up year to date versus s&p which is now lower for the year. we are going to get the numbers in just a few minutes. here we go apple earnings are up. >> apple reporting a buck 68 street was looking for $1.41 revenue also better than expected up 21% to 111.4 billion the street closer to 103 billion. gross margins 39.8%. iphone revenue up 17% to a better than expected 65.6 billion in the quarter. services revenue better than

expected as well 15.8 billion. wearables, home and accessories 13.8 billion ipad comes in at 8.4 billion i also call out greater china revenue here up nearly 60% to 21.3 billion in the quarter. no formal guidance from apple at this time but we know what apple executives have been doing providing more color and commentary on the call that call kicks off at 5:00 p.m. eastern. back to you all. >> for more let's go, bring in the panel. dan ives, first to you your immediate reaction, basically a beat across every line other than maybe mac in line but pretty impressive. >> yeah. this is a masterpiece quarter. that is an iphone number not even in the best case scenario you combine what we're seeing, double digit growth in this pandemic, it just shows the super cycle, the hype was there. stocks obviously run now it is a reality. i believe we could be looking at

240, 250 million units for the year i think this is a moment for the bears. i think it throws out the negative thesis if there was any on apple it is a real cycle china continues to fuel on iphones as well as services. a rerating series half way through. >> stock is down surprisingly by 4% in after hours. back to josh for more analysis >> i did have a chance to catch up with the apple ceo and we talked about the quarter the iphone franchise up 17% to the 65.6 billion one of the trends and themes he is seeing there, they're full of features that customers love he said and they came in at exactly the right time with where 5g networks were between the advances on 5g and the camera customers really love the models the customer satisfaction is literally off the charts he also did tell me they are supply constrained on the 12 pro hoping to come into supply demand balance there soon he

said we talked about the pandemic, the lockdowns. how has that affected the iphone franchise with stores being impacted cook did tell me it has been a drag on sales for iphones and wearables. also he talked about china like i said, greater china revenue up nearly 60%. i asked him how the iphone was performing in china. cook telling me when the final numbers come in for iphone sales there he said you'll see that we gained share in q1 so it was really a good quarter. great products at the right time we had great growth he said in the other categories as well in china. ipad even higher than the company average. mac even higher than the company average. wearables home accessories even higher than the company average. china he said was strong across the board. back to you. >> josh lipton, great to get that color and commentary from tim cook on the quarter. thank you very much. ed lee, what stands out to you from the results really strong growth in china as josh highlighted and then off-the-charts customer satisfaction according to tim cook from the new phone.

>> yeah. it's a blowout quarter absolutely the greater china growth is super interesting. i think investors have always thought of apple as this weird hypercompany, value on one end and potential growth on the other. china clearly is really picking up for them. the growth is there at least on that side of it. i was surprised by every element. i think the iphone number was crazy. so people are really looking for the high end phone they want the latest but the broader, for me, the broader theme is that it just really cements apple as more of a lifestyle company. i know we tend to think of it as hardware and high tech which it is and these users always go for the latest but they've created this ecosystem that is why service is going as high and steady as it has been because for every device you buy you are more sort of keyed into all of their services whether their cloud stuff or music service or news or whatever it might be you're kind of locked in it is an ecosystem company now.

>> i know microsoft ended the day flat but the initial reaction was in line with the quality of its results which was higher in respect to great results. apple not moving higher despite really outstandingly strong numbers. >> not yet we do have a call. sometimes there is a little rethink when it comes to apple and people refocus on what's to come often of course apple kind of conservative on forward looking comments also though a full valuation the stock has been revalued, repriced higher relative to earnings but it has never been quite this high in decades essentially mid 30s, you know, forward. pe multiple rs i think that is probably part of the adjustment it is not clear it is looking at much of anything in the reported quarter. that would give people pause unless people think there is some kind of a pull forward in demand but that is not necessarily evident. >> no. but that is a question that people, certainly apple has

been a beneficiary of the work from home stay at home trend on the computer, people spending money on their phones and technologies at some point when we get the vaccines, more widely disseminated, isn't disposable income going to go toward vacations and restaurants and travel could that be a headwind here for apple and this super cycle >> it is a great point i think if you look at this quarter and i think what we'll see the coming quarters we're seeing demand especially accelerate in china and of course in the u.s. as well but services as mike talked about, that is the key that continues to be rock of gibraltar like that is worth 1 to 1.3 trillion alone and i think they are proving it along the way you could see some moderation of growth but the reason is a super cycle, a multi-year cycle. it is an 18 to 24-month cycle. and that is why you'll see the continued rerating and numbers go higher. many on the street play catch up >> dan, thank you both for joining us

good to see you. >> thank you apple down 1.2% or so in after hours trade. much more reaction to come from that very strong earnings report straight ahead plus morgan stanley's chief officer mike wilson.

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apple has just turned around and is now slightly higher after hours. just reported a big beat on both the bottom and top lines for more the founder and editor-in-chief at the information joins us again jessica, some highlights from this quarter which exceeded a hundred billion dollars for the first time ever. 17% growth in iphone sales almost triple what analysts were expecting and 57% growth in its chinese business >> a lot of good news there. the china stats are definitely good news. so much uncertainty around that. and, you know, very positive trends there >> i think you're seeing pandemic tailwinds across the

board for the business both in terms of new device sales as well as services. i think, you know, with the appeal the products have in the market place and the demand you can think there is some sustainability to that, too. obviously huge quarter breaking a hundred billion for the first time very big deal. >> also want to welcome peter to the conversation, the stock had already had such a strong run up into earnings, up almost 80% or so i think maybe more than that over the last 12 months and strong this year as well came out with a quarter that did well did they leave anything, i guess, guidance? is that what is being desired, left to be desired here with apple shares under a little pressure >> yeah. doesn't appear they're offering guidance maybe guidelines on the call later. but no guidance as far as i can see right now. >> peter, just wanted to come in on the breakdown of these numbers. china, you know, played devil's advocate here. clearly outstanding numbers

overall. but for a long time we've talked about shifting to services and a higher multiple but given where they're having all their beats at the moment, iphone and ipad and mac, etcetera, products, 96 billion. revenue services only 16 billion of revenue is that anything to be disappointed about based on the multiple it might lead to? >> it is hard to say it is exactly disappointing because we were looking at this past quarter at a generational change in terms of the upgrade cycle with the iphone 12 and the addition of 5g and frankly a lot of people who had held off on upgrading their phones over the past couple years looking for a significant upgrade. the iphone business is still very, very strong for them i think it is going to continue to drive growth going forward. the question is really how can happen l continue to use -- how can apple continue to use the iphone and ipad as a launch for the services business? they have invested a lot in

content, services, in tethering these new subscription businesses to, you know, the devices so when you buy a new iphone for example you get a subscription to, for several months to apple tv for example and so they're taking a very long view at this. and the fact that the iphone is continuing to perform very strongly i think sets a good foundation for that. and so it is hard to be strongly disappointed from my perspective. >> go ahead. >> i was just going to say i think the hardware acceleration is great for the services business and vice versa. we've reported the information that apple is going to experiment with subscription podcasting, just a lot of experimentation i think we'll see from them in tying the two together i think it will lift both boats. >> wanted to follow up on something you brought up earlier as it relates to facebook's quarter which was also quite

strong but it did cite a number of uncertainties in the outlook. one of them had to do with apple. can you just explain this facebook, apple feud, which is now materially apparently impacting facebook business? >> absolutely. you know, facebook has been really critical of some changes apple has made to how sort of ad targeting or ad accountability will work on iphones apple really wants to protect consumer privacy, has unveiled a lot of new features to do that and facebook is really concerned about how that will affect the efficacy of advertising on facebook so this war has spilled into the press. it's getting hot and heated. you're seeing now facebook, you know, flick at it. in the future. you know, how much it will affect the business who knows? there is a sort of war of words and strategy going on here but what is certainly interesting to see in facebook's forward looking comments

>> peter, is there a risk at all for apple that all of the 5g demand has arrived, all of the pandemic related ipad and laptop demand has already been and gone >> i think there is a small risk in that a lot of people cooped up at home this past year are spending a lot more time on the devices than in the past you know, saw that as a great reason or excuse to upgrade. and to, you know, make the investment now rather than doing it in the future i think we will probably not see necessarily a strong quarter as we saw this past quarter even a year from now. we tend to see apple's devices take sort of a cyclical, every other year is really the big upgrade for the devices or even three years. you know, with 5g actually i think that most people are not purchasing the device specifically just to get the higher speeds of 5g in part because they either don't see the benefit or they don't live

in a place where they are able to get the really fast millimeter wave, you know, 5g service. so i think as we start to see that infrastructure and coverage roll out across the country and frankly starting to see the wireless carriers start to better message and market around 5g that may be something that drives upgrades in the future. but i don't think it is something that caused an inflection in the number of people upgrading this past quarter. >> apple swinging up and down around the flat line right now we will leave it there thank you both for joining us with that breaking reaction to those apple earnings we're just getting the sec out with a statement on all the market volatility. leslie, what are the regulators saying >> reporter: that's right this statement from the acting chair who says we are aware of and actively monitoring the ongoing market volatility and the options and equities markets and consistent with our mission to protect investors and maintain fair, orderly, and efficient

markets we are working with our fellow regulators to assess the situation and review the activities of regulated entities, financial intermediaries, and other market participants back over to you guys. >> thanks very much for that a major sell-off on wall street today. of course up next, morgan stanley's mike wsoiln will weigh in on whether this is a buying opportunity or whether there is more selling to come we want both - we want a hybrid. so do banks. that's why they're going hybrid with ibm. a hybrid cloud approach helps them personalize experiences with watson ai while helping keep data secure. ♪ ♪ ♪ from banking to manufacturing, businesses are going with a smarter hybrid cloud, using the tools, platform and expertise of ibm. ♪ ♪ ♪ hey, dad! hey, son! no dad, it's a video call. you got to move the phone in front of you like..like it's a mirror, dad. you know? alright, okay. how's that?

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earnings news from facebook,

tesla, apple in the last hour and also a volatile day for the broader markets with the dow closing down 2%, s&p down 2.6% joining us mike wilson chief investment officer at morgan stanley. good to see you and thanks for joining us in one of your latest notes you wrote you expect a correction in the s&p 500 in the s&p 500 why now? >> thanks for having me on the markets have been going one way for excite a while a couple of things we've been focused on is the licked widity. a couple of things we've been watching is crypto currencies have been struggling a bit really since the early part of january and that may have been an early indicator that lickedity was sort of topping out. it began about a week and a half ago, which is getting a lot of attention now, a lot of heavily

short stocks coming up, interesting moves that are creating some pain for certain investors. that always leads to some degrossing we're seeing that now. so, look orks this is a healthy development in my view we're bullish about the economy. we're constructive on equities going into someone we've had a heck of a move and we discount a lot of good news, so a good cop so days here is what we need >> down 2.6% on the s&p today. what are we talking about? another 5% another 20%? >> who knows to me, it's about the de-grossing. when we look at our clients' leverage, it's high. leverage high in the retail market, too. we've seen call buying pretty extraordinary. there's lot of leverage in this system the fed will be supportive, they indicated that today as well there's been leverage put on top of liquidity

some of that leverage needs to come out you never know what the price damage will be as that rises we'll be watching the levels and some of our tebl indicators. the two-day moving average, three, four, 500 points from where we are today there's not like there isn't support at significantly lower levels than we are today >> what might this mean for the rotation that we've seen lately into value and cyclical areas? does it mean you should hang on for the long run because ultimately that's where you want to be on the way out of this correction? >> look. that's the more interesting part of the story for us as investors and have been for the last six months buying individual stocks and trying to find the ones that are going to outperform is what management is all about. as you know, we've been skewed more towards the cyclical parts

of the market because the view on the economy has been more constructive, small caps, etc., and they've run quite a bit. we're still skewed that way in race car to what we're recommending to folks. but they're somewhat consensus now and they've extended any expansion in banks, materials, consumer discretion, we tend to like those. >> we continue to like some of did growth stocks that have traded poorly since the summer, right, as interest rates have backed up, some of these have come down. there's some sharing on technology space as well i'd stay away from the extremely high valued stock. some have been outperforming in the last week. >> to go back to the first topic, the broader liquidity that we might see, would the game stops of this world, has their effect on liquidity been

felt or will it be felt as and when or if the likes of game stock pulled back and retail investors or whoever has been enjoying the ride out gets a bit of a pinch >> it's always difficult to predict these things i think right now we're seeing inaugurational leverage out of the mark because of the short squeezes and other moves that portfolios there's a whole host of stock, you name one, but a bunch have shot up on short squeeze type activity they're way overvalued like some of the other names they'll eventually have their come-uppance that will probably lead to some de risking or de leveraging. maybe a two-stage type correction when you think about leverage that's a side show that's the reason for the

consolidation, if we get one ultimately, fwheerp a bull market ultimately we want to buy into that we've talked ability this for a month or so. it's finally here. the best thing you can do is try to take advantage of it. >> hmm who would have thought game stop would trigger the broader market correction as we see it. mike, thank you. mike wilson from morgan stanley. >> thank you >> up next -- your earnings roundup and what to company on the conference calls for anning, facebook, and tesla. facebook is higher, apple's lower and tesla's down to 4% check out some of the heavily shorted names like game stock. they are down. amc down 200%. you can find scott walker'fus ll interview in defense of the retail investor. we'll be right back.

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take a look at some of the after hours movers apple putting up a record quarter thanks to strength in china. on the new iphone, down. facebook turned around

it was down more than 6% on a 7% after hours. tesla down 4 1/2% after a big miss on the bottom line. take your pick as far as what conference call you're most excited about that might create, i don't know, a more con strant trading pattern, which are indecisive after hours >> i don't think expectations were that far from what we were looking for. tesla, $700 off its record high. that's not a huge percentage but it has underperformed. that's the one where you have the widest potential set of outcomes in terms of what might be said. >> and mike, apple was down about a percent today, down slightly, a little bit of a surprise, because 1100 billion in revenue in one quarter, very strong numbers >> it's phenomenal

this is a huge company we've accounted for a lot of its greatness. i have think of tomorrow still a lot of options being taken up by the small stories stocks you have some of them backing off. people are getting entrenched -- >> what is -- >> what is that? >> come down to game stock >> that's what i mean. >> all eyes on game stock and apple. more coming up on "fast money," which stars right now. >> this is "fast money." tonight's trader lineup. tonight we've got apple, facebook, tesla all on the move. we're giving you every detail you need to know we start tonight with a major market selloff the s&p 500 closing down 2 1/2%, the biggest loss in thee months. every sector finishing the day lower. we saw more outsize moves in names like