on with short seller, citron research just out saying they're discontinuing short selling research, citron will no longer publish short reports. we will focus on giving long side multiopportunities for individual investors, so talk about a change, there's one. >> and what will happen in 2021, we know, now that 2020 is over, it's going to be quiet. >> have a great weekend. see you both do it again next week. and make sure you join us. "squawk on the street" is next good friday morning. welcome to "squawk on the street." i'm carl quintanilla with david faber and morgan brennan, cramer has the morning off. futures are off the lows but still weak as this final day of january happens. three big baskets of news. the reddit squeeze corporate news and j&j with vaccine data that dr. fauci calls a spectacular result our road map begins with the retail trading frenzy, shares of

gamestop andothers trading again as trading restrictions are lifted >> and what regulators may do next in response to this squort squeeze saga of the week >> and covid vaccine hopes, j&j says its shot is 66% effective but may fall short against variants and good news on both, at least, according to mr. fauci, certainly, carl. >> yes, david, and also, scott gottlieb calling it a, we did it right, a wonderful and important development. we'll get to j&j, obviously, but david, i mean you got to start to take the week in stock, and talk about the degree to which this debate over market structure and these short dislocations are depressing septemberment, and we'll see to what, sentiment and we'll see to what degree they drive derisking in other areas >> that is a great question, in terms of what the impact is on the broader market at this point. we've been so focused of course on some of these names, they

are, as you see, soaring again, in part because people are going to be able to buy them on many of these platforms, certainly the robinhood one, carl, and that's kind of where i've been focused, because it's fascinating, i mean there are so many different parts of this story that are interesting, that you can go down and do a lot of reporting on, whether it's the hedge fund and the health of some of them, or lack thereof and what the losses are there, and how that business may change, in terms of the willingness of anybody to do work on an individual name and be known as sort of being short that stock and that may not be the case you heard andrew just talking about andrew left, noted researcher on the short side, closing up shop essentially is what that is obviously, has taken significant losses, one would imagine, as well there's that part of it. and then there's robinhood this platform that has only come to the fore over the last couple of years and incredibly popular. and the ceo last evening with an interview with andrew, number one in the app store the last few days so many new accounts

and yet, what does the risk management profile look like for that company what is its ability to mitigate risk when you've got this kind of volatility and you've got settlement that is days away you have people who are obviously on margin. how many accounts are negative equity in terms of that, and what about the company in terms of in solvency and they took in a billion as you saw today there are so many moving pieces here we're trying to keep an eye on all of them and you get into the political response and the losses, amongst the reddit users, and everything else, but the robinhood part, i guess i would say here, and we can talk more about it and i know morgan's got plenty on the options market and things of that nature, but don't expect that robinhood may not be in a position where it's going to have to ban trading. excuse me. where it's going to have to prevent people from buying certain names again, as they risk management tool, as a risk management tool. >> i'll take this one up

i was going to say, i went way down the rabbit hole, i've been going way down the rabbit hole in terms of options trading and volatility, and i've been kicking the tires, i don't know if you can see it, i have my boots on, kick the tires boots, ready to go this friday morning, and in general, yes, there are so many questions that you can ask here, so many different angles can look at look at the futures market, right? we're seeing that derisking event happening in light of everything we've seen this week in general, and you've seen some of the mega caps tech names that have been favored longs of many of these hedge funds coming down and seeing some weakness, first time really that we're seeing this in the last couple of day, versus the last couple of weeks, because you are seeing this risk unwind, you can also go down the rabbit hole, in terms of trading, and what this has meant in terms of volatility and implied volatility as well which is its own special part of the market and all the questions this raises around derivatives trading, i think as well, which we will talk about with some of our guests in the next hour.

now, i know citadel has come out, you do this, robinhood has come out and saying this was a specifically event, but you do have to wonder, as one very smart trader said to me last night, that whether it was explicit or implicit, suits playing the plug on retail here. when you think about it, you're thinking about a platform that people are trading on for free, basically for free and nothing is ever for free, as we learned with the facebook situation over the last couple of years and yes i'm drawing a parallel there, i realize it is apples to oranges in certain ways but this idea that for you, the user, to be on a platform like robinhood that is democratizing investing, and trading, somebody, somewhere, has to basically pay for that, and it's in large part being subsidized by those order flows, and i realize there is also another piece to this in terms of robinhood and infrastructure and what all of this means and this is potentially liquidity for robinhood and we saw them

drawing down last night and the investor infusion last night as well, but there are many different pieces to this >> but a key one, morgan, is just robinhood being in a position where if it wants to stay in business - >> absolutely. >> it cannot have negative equity in many of these accounts and given the volatility and the moves that we saw, i mean when you're talking 92 million shares, trading for 35, and then going down from there, and by the way the loss, there may not be that many winners here, certainly there will be some on the reddit wall street bets but there are plenty of people who lost a lot of money yesterday. >> absolutely. >> perhaps some hung in there. but robinhood, if you want to stay in business, you've got make sure to mitigate as much risk, you can't take those negative equity positions that you're starting to see in all of those account, and by the way, the clearinghouses that provide you margin are raising the margin on you, and that's why you've got to say we can't do it so there are a lot of conspiracy theories about - >> i'm not getting into the conspiracy theories. i'm not taking sides on the

conspiracy theories. >> my point, it's simple business in terms of a brokerage firm wanting to stay in business. >> absolutely. and it is self preservation for a company like robinhood in part because again, not only the regulatory situation for them, themselves, their inhouse clearinghouse, et cetera, but also the fact that in general, where do they make their money more broadly, longer term as well and think there are so many different cases to this, very nuanced and hard to talk about it in sound bites on tv. i am sure there will be many books and many investigative pieces written about it over the coming days, coming week, coming months, coming years >> david's right it's multi-faceted the layers to the story, the regulatory issue, we've heard from maxine waters yet, david, as you implied, a lot of discussion about whether or not robinhood is somehow betrayed its users and i went back and looked at terms of service and it is very clear, any services

with my account may be discontinued with written notice and we talked to them about the capital raise and the degree to which they need to be concerned about that clearinghouse dynamic. here's what he said. >> well, to be clear, this was the system working we have the act to restrict buying in symbols. for unprecedented market conditions such as this and to be clear, we didn't shut down the system. we shut down buying for these 13 stocks, for these 13 securities, but customers that held positions could still sell, and customers still could buy and sell the thousands of other securities on the robinhood platform >> but when you look at the precipitous fall, for example, of gamestop today, do you think that robinhood bears any responsibility for that? >> i can't comment on, you know,

price action of securities, and probably would be inappropriate for me to do that, and also, i should note, robinhood wasn't the only firm to restrict buying in securities. other brokerages have been restricting the buying and trading of these types of securities all week, and even today. of course, we get the lion share of the attention since we've been the cognitive requirement for retail investing in america, but other people are dealing with these challenges as well. >> as for the impact on the broader market, david, barclay's takes a shot at it today they say look, the total dollar value of short interest is 800 billion, but for stocks where it is short to float, of greater than 20%, it's 40 billion. so it's unclear exactly how many rich targets these hunters will have down the line

>> again, the impact longer term on the broader market, difficult to say will this be with us for a long period of time most likely. are there going to be any true regulatory changes here? perhaps there will be more attention on short selling, certainly not to the point where you can get short, more of a float that exists, that would seem to be something that would put a stop to and people have quoted numbers of gamestop and which by the way you can borrow now quite freely that may not have been quite correct and certainly there will be a lot more focus on risk mitigation. we talked about it these hedge funds, i think some of them didn't realize how many were following melvin into the same trade on retail melvin got a lot larger as a hedge fund itself. and probably has lost more money than it made during the life of the fund which we've seen so many times, through some of these fund, whether it's jim paulson, whether it was john

paulson, or whether it is julian robertson, made the point through the years, many of these hedge funds get so large, very large, this guy is a great stock picker, gabe plotkin, great on the short side, but you have to look at the risk mitigation that they were deploying or keeping an eye on and that is a case for the hedge fund industry as it moves forward, as it has to be prepared for this possibility. and by the way, this day is just beginning. gamestop is up almost 100% right now. we will see where it starts and i would point out, we have to keep a close eye on robinhood and whether that firm will feel comfortable continuing to allow people to buy in these name, if it starts to see some of the same things that move them to shut it down yesterday morning >> not to be overlooked, with the volatility, we have seen, just in gamestop trading in general, i mean how many halts were put on this name yesterday as well? so even if you were -- >> at least five >> so even if you, even if you did have access, or you were

finding a way to buy into that name, i mean how many of the hours of the day were you actually able to do so i think also just speaking to that piece of it one of the questions that has been raised to me by some of the people i've spoken to in the last 24 hours, is again, i'm not, i have no opinion on, this it is just a question that's been raised to me, which is why blanket freeze on anybody who is buying options, further out, than the expiration today, or buying the underlying stock in general, you know, you can make the argument, or they were making the argument that accounts with options expiring today may be free limit, and you have the liquidate because of concern of capital requirement, that's a sign, a position in the underlying stock, but to do so blanket, i think it is really part of what, the question that was raised, and has enraged some of the folks that maybe were trading and going long in a name like gamestop yesterday. david, i also think it's interesting that when you see a

name like gamestop, that is what, something like 1700%, i mean we're hearing about it on the amc side, but in terms of the opportunity here to potentially sell more stock, raise more capital, it's been interesting to not hear a name like gamestop coming out and at least publicly considering that option. >> you would imagine that they should why not take advantage of what the market is giving you, as you point out, amc has done so, at least, what it had on the shelf, and then silver lake of course, moving to convert what had been a fixed, a convertible note into stock as well, to try to save themselves some money there, or make some money where they thought they had a loss, and yes, you know, we can all argue about the long-term nature o the business of gamestop and i thinks that do underlie some of the questions here as well of what we're seeing but trying to sell some stock, and trying to sell stock when it is bankrupt,

and trying to buy it. and another big story we're following is johnson & johnson out with new covid-19 trial results and meg terrel has the details for us meg? >> hey, david, well, we were obviously anticipating, because it is the first one shot vaccine we are getting for covid results from massive phase three clinical trial, 44,000 people across three continents. in the u.s. the efficacy figure against moderate to severe covid was 72%. and now, when they incorporated the global results, which included a much lower rate in south africa, where you have that troublesome variant circulating, 66% efficacy overall. importantly, against severe disease, being able to prevent people from going to the hospital or dying interest covid, 85% efficacy globally including those results from south africa, so that's what we're hearing experts focusing on today, the ability to keep people out of the hospital with a single shot vaccine. and in addition to being one shot, there are other benefits

to the vaccine including that it can be stored in the refrigerate at temperatures of 36 to 46 degrees fahrenheit for up to three months and packaging this in a five dose vival the nih just concluded a tele briefing on these results and dr. fauci acknowledges that people will compare that 72% in the u.s. with a 94 to 95% we saw from the prior vaccines from moderna and pfizer, and he said if you look at this number, you know, without, and the absence of the 94 and 95%, one would have said this was a spectacular result. but guys, check out the trading of other big vaccine players in the covid space today, you are seeing moderna soaring you are seeing novavax soaring and presented data from the u.k. and south africa last night. and pfizer up as well. and experts are saying this is spectacular, one shot can keep people out of the hospital and

prevent deaths from covid so you're seeing that play out in the markets right now. guys >> yes, meg, let's get straight talk on whether or not you see this as disappointing and whether or not you could improve that efficacy of a second dose of j&j's own or a booster? what's in the future there >> well, they are testing a two-dose regimen, both in the u.k. and in the u.s., so we should see data on that as well. they are moving forward, planning to file for emergency use authorization, on the one shot in the u.s. next week so this will move pretty quickly and potentially get on the market within a few markets. impossible to compare apples to apples that 72 and the 94 to 95 because we don't know which variants were picked up in the data in the j&j trials they haven't sequenced all of the cases in the united states the other argument is that there is so much more disease when j&j

was running this trial and that could affect the efficacy as well we should remember, the fda bar was 50% efficacy we're seeing 72% for j&j here. this is still a good result, guys back to you. >> yes, and keep in mind, with the average flu vaccine is able to do these days, compare it to that as well meg, big stories on your beat this morning we'll come back to you later on this morning meg, doing great work as always. obviously plenty to get to on the corporate earnings front. we will get to honeywell and caterpillar, lilly, chevron. take a look at the dow futures off the early morning lows we're back in a minute

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manipulate their own stock we're seeing the same types of things happen everywhere outfits like robinhood that say i would will give you prizes to come join with us, and then say that you have to sign something that says there will be an arbitration clause so as it turns out that we really did cheat you, if it turns out that we really did cheat you, it will not be made public and there will be very little that you can do about it. that doesn't create a healthy market what we need is a healthy stock market, and to have a healthy stock market, you got to have a cop on the beat, that should be the s.e.c., they need to step up and do their job. >> senator warren on closing bell last night.

david, it was interesting to hear her focus in on the s.e.c., and equity, because some of her prior tweets had mentioned private equity, and you can imagine private equity saying wait, wait, wait, don't drag us into this. >> listen, carl, i'll come to you, i don't quite understand, do you understand, what was she saying >> i think she wants better, more aggressive s.e.c. enforcement. >> period, right, that's it. i guess. yeah, listen, all don't respect to senator warren, i just don't know exactly what that was in listening to it at least maybe a larger conversation, we'd get further you know, again, robinhood is doing what it needs to do to potentially protect its business, even though of course preventing people from buying stock on your platform, you're perhaps sending them to other ones, so that's not necessarily good for your business, but you got to do what you got to do to keep yourself alive and solvent. and there are going to be a lot

of things to look at and when gary gensler is approved as the s.e.c. chairman, i assume morgan he will be nothing but busy. >> yes, it certainly seems that way. and you know, it's not surprising, to hear senator warren commenting on this. despite the, maybe ambiguous nature of that comment, or to see some of the other senators and congress people that we see commenting, i mean it would seem at a time where congress tends to be very divided on quite a number of topics including the latest stimulus proposal let's not overlook that. something we've been keeping an eye on for the last couple of days as well it does seem there seems to be some bipartisanship between some of the senators here but it goes back to that question about what really can be done, and the devil's in the details, whenever you talk about any kind of regulation all right. we've got a lot more here's another look at the futures, as we countdown to the opening bell right now we're poised for a down day to

end the week with the dow poised to open 157 points lower, the s&p implied to open down 14 points stay with us competition beat us, again. how? they have a better finance system than we do. i feel like they might have a better finance system than we do. workday. how do they make better decisions faster? workday. got to do something. workday! i think i got something. work... hey, rob, you're on mute. hello. [all] hey... there he is. workday, the finance, hr, and planning system for a changing world. ♪ch-ch-changes♪

the reddit squeeze has resumed resumed morning as some of the restrictions have come off and the s.e.c. is closely monitoring the extreme price volatility of certain talks and we will closely review actions by entities that inhibit the trade of certain securities. t re "squawk on the street" continues in a moment.

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we mentioned that s.e.c. statement a moment ago, reading it a bit more in full here, extreme stock price volatility has the potential to expose investors to rapid and severe losses, and undermine market confidence they go on to say, david, issuers must ensure compliance with federal securities laws we will act to protect investors when facts demonstrate abusive or manipulative trading activity that is prohibited by law. >> yes, i wonder who that ends up protecting in some way, if that's a reference to robinhood? i don't really know. the best way to protect is to make sure your firm stays in business it will be interesting again, we come back to this, and obviously, the s.e.c. right now is missing its leadership position, sort of direction from that, even though obviously they have a lot of working commissioners and the like, but morgan, it will be interesting to see what they really choose to focus on and what if any true changes occurs as a result of what we've seen this week. >> exactly and i think there are so many different angles to this, in terms of, back to your point,

that we're going to be seeing regulators probably very busy looking at it. it is a very unprecedented situation. we've got the retail side of it and just the run-up in these stocks but on the other side we have the hedge fund unwind, the market positions, the market makers getting blown out in that volatility here's the opening bell. it is -- >> there's the opening bell. and a look at the s&p 500, at the bottom of your screen. obviously, final day, final trading day of january this morning. still looking at a losing week and for the month, dow is down 3 points for the month, s&p and nasdaq do have a gain for january, and nasdaq by 3.5 but again, we will see how much collateral damage there is in some of these dislocations david, we mentioned that barclay's note earlier today, and look, they say it's been a wakeup call in their words, retail traders are likely to continue to be a force to be reckoned with. and that will permanently affect the business models of

institutional investors, as that long/short risk protection strategy gets recalculated >> yes, it does. listen, i mean you can still short a basket of stocks, still going to try to put some hedge in your hedge fund, if you're one of the managers behind what, the $3 trillion plus that is in that asset basket, so to speak but in talking to, and you know, for years, i've talked to so many of these largely guys, they're not going to short single name, that's for sure, carl, they're just not you don't want to do it at this point. you don't certainly want to ever be associated with a particular short position that is where things sort of began to go bad for mr. plotkin at melvin. somehow people learning about his very short positions and to be fair, it was a basket of retail names as well. and obviously, he didn't have it properly sized perhaps he didn't fully understand how many other hedge funds were following him in those same trade, given the level of success that he's had over these last few years.

and he was up 51.4% last year. the year before that, 46%. to give you a sense of his performance. but i don't, you know, you're just not going to have single name shorts and that's why a guy like andrew left, who has built a business over 20 years, saying i can't do it anymore, nobody is going to bother listening because the risk is simply too high at this point whether that will change, we'll see. >> there's a conversation -- >> huge implications >> go ahead. >> i was going to say, david, huge implications, if you were unable to hedge the way you historically have hedged, to what degree do you de-risk on the long side, and those spreads get wider, and markets get more brittle, there will be a series of unintended consequences that we don't even really understand at this point. >> yes, i mean and there's going to be a bigger conversation to have around leverage i suspect as well. and we can talk about that in terms of what we've seen in the retail investor landscape and on a platform like robinhood, and you can talk about that probably on the hedge fund side as well,

when you are talking about some of these shorts. i also got to wonder, just from a fee standpoint, what this does to the 220 model that has been a debate how long has that been a debate where the hedge funds are concerned? >> i would point out, i have kind of watched this industry become a industry. when i started, it was sort of five guys and we didn't have reg fd, you know, there was an ability to sort of get close to that line, and then it became a true, as you say, true industry, and it has made a lot of people extraordinarily wealthy and many of them not really putting up ret returns or anything more than the regular index or the s&pan the fees have come under pressure, there are not that many managers out there, or certainly not as many as there were once were being able to hold the line on the numbers that said when you have a great record, you can ask what you want and money seems to find you regardless, and that can

sometimes pose a problem because sometimes you get outside of your core competency, or sometimes you simply start to take perhaps more risk than you realize you are taking and that may have been the case with melvin. but yes, we hear it a lot. hedge funds are here to stay the compensation structure, maybe not quite so much, although i did make the point yesterday, morgan, i think it is worth making, they do serve a lot of different constituencies, they manage money for a lot of different people and it is not just the enormous wealth that accrues to a handful of people at the top although that is something that i have been focused on for years and talked about and questioned but that's the way the world works, they're not doing anything necessarily illegal despite the fact that so many would like to believe they are, they're not. >> yes, i would also just note silver has been jumping, you can see that etf as well, i think that started picking up last night, and it is getting attention as well, this idea of

a short squeeze, playing out in that, it looks like jpmorgan as well, named 45 stocks that could be susceptible to quote fragility events in the coming days as well, including some names that we talked about on this show, matrix. cheese cake factory, stitch fix. among the list there, too. so other names to just, i think, keep an eye on, and watch, given some of the conversations that seem to be bubbling up around those. >> everybody's got their list of potential targets. by the way, we got a halt on gamestop, for volatility, probably the first of many, if the last few days is any indication there is a slight industrial big, guys, this morning, caterpillar comes out with a pretty nice beat revenue ahead. sees sequential improvement in the operating margins. they expect to recommend a div hike this year machinery sales, the least negative since november of 2019. so cat is one of the few dow components in the green.

and then david, morgan stanley, on an ordinary day, we would be talking about the double upgrade at boeing which they say consensus has gotten too negative, runway is clear, kitchen sink quarter, and boeing also one few dow components that are solid. >> yes, it is slightly in the green as you say, we had dave calhoun on the other day talking about the fact that they do believe they have sufficient liquidity, despite what were those significant charges for, on a couple of different areas, carl, and then this focus, this continued focus, i think, you would have to say, on what the third quarter of this year, gary kelly, of course, talking to yesterday, as well, about sort of the progress that he sees being made so much of this though, carl, does come back to the vaccine, and the distribution of the currents vaccine, and now today, of course, the good news, in terms of novavax and j&j which perhaps will be added to the mix soon, but we still got a watch on that front. thankfully, hospital lations and cases have been trending down, but carl, there is a great concern about these new variants

as well, and what could that could mean and again, that comes back to travel, which comes back to boeing. >> yes, exactly right. ubs has a note out this morning, obviously looking at a global population, but they say at the current run rate, ubs, we populate, or we vaccinate, rather, 10% of the global population, by the end of the year so that's obviously including all kinds of developing markets, not just developed, but that number needs to inch higher. we're beginning to see, david, some slight increases of average vaccination and now 1.26 million a day in this country for a total of a little over 27 million so we would like to see that number obviously accelerate. >> yes and then we got that j&j data that was out this morning, you have that novavax data, that came out last night, as well, and the expectation around j&j, that you could potentially see an emergency use authorization happen, as soon as next week, and it is expected to be i think

a pretty aggressive ramp, in terms of production there, and i mean there is that discussion, i know jim, i think has broughted , brought it up on this show, more than once in recent days that perhaps we will have much more supply than originally anticipated, quicker than anticipated, if you do start to see some of these other shots come online, much more quickly, and of course, the question then becomes how quickly can you get them not only produced, but distributed into people's arms which of course we've seen that's where the logistical hiccups have been in recent days i think it's also worth noting, just the fact that the pentagon is now being called upon to do more, in terms of, instead of just sort of behind the scenes logistics, around vaccine distribution, to do more in terms of actually potentially getting those doses into people's arms, so that's going to be another development to watch pretty closely, and it speaks to that federal push that's happening in a much more aggressive way now, under the biden administration, carl

>> gamestop's reopened now, guys, with a 64% gain. david, what's interesting is some of the action on mega-cap tech apple down again today and i wonder about facebook as well on the heels of what were obviously very strong quarters but there's a couple of dynamics one is that companies that were beating earnings were already underperforming relative to the broader market, before gamestop happened but you could build i guess a thesis that some of this is depressing sentiment on names that are clearly not just blowing out q4, but highlighting and forecasting, in the case of facebook, at least continued revenue growth of 30%-plus. >> a 33% top line growth number for q4, but as you point out, the stock yesterday really didn't do much of anything i think it did end the day down. apple is also down in a typical week, if we didn't have what we are looking at right there, the reddit rally so

to speak, we would have been much more focused on earnings, given we have heard from apple and microsoft and facebook and tesla. shares of which were also down a bit. but they kind of came and went, but to your point, we got to keep an eye on them. apple share disget to a point, it's stilt up by the year, we would point out a little more than 2%, for apple, where the s&p is down and still outperforming the broader market and does trade at 35 or so times earning, something like that but a number of analysts will change their estimates to a certain extent, given a very strong quarter, some of the numbers are truly hard to imagine when it comes to apple i forgot to check the cash position, wewere so busy yesterday but it is hard to avert your eyes from the main story this week. gamestop is at 75% that has caught the attention of so many. and it is the focus. but amc shares are up 59 almost 60% by the way, this idea of selling shocks, towards the end of the quarter, they may be in a

period, unable to do that and need to refile new numbers and perhaps gamestop will try to take advantage of this at some point by selling and at this point you would sell 10% and $2 billion that you could raise, amazingly enough go ahead, carl >> right on the money, david dow jones now with the headline that american has entered into a new equity distribution agreement. 1.12 billion so some of these cfos are not looking a gift horse in the market. >> take advantage. why not? it's a smart thing to potentially do even if the market is act i irrationally, so what. give yourself an opportunity to secure equity, at a cheap price. so at least for that and not have to access the debt markets, which has been more the case, you know, look at amc, right? what it was borrowing at and now it is able to potentially sell stock. this is a company that was very close to just staving off br

bankruptcy here and there and trying to make its way and it gets caught up in this fervor. some of the names to keep an eye on as well, viacom, it is down it had been up as much as 3% that stock has been a beneficiary of this short squeeze strategy, discovery another one, and again, any of these names, that have large short positions. now, both of those cases, you can make arguments as to why the stock should be higher certainly discovery in terms of its multiple and ebitda and the recovery in the advertising market, but it's funny to see how many names have been caught up in this and yesterday, both were down rather sharply there are names that i watched closely, like for example, virgin galactic and another 5%, $45 per share right now, that's a name that bouncing around in general, it's been a name that has been highlighted for quite a while, and i think on. so sites like wall street bet, but to your point, it is these

names that have a lot of short interest in them that is getting a lot of attention i also just think, going back to the whole selling stock conversation, as well, i mean there's probably a case there to be made for the s.e.c. to make it possible for some of these companies to move even more quickly, potentially, to be able to sell more of their stock, in the midst of all of this volatility, because you got to think that that too potentially, putting that supply out there in the market, could help some of the huge spikes that we've seen. it's a debate to be had. >> it is carl, it has been a funny peek, because i barely mentioned spacs and by the way, just because i haven't mentioned them doesn't mean than of them haven't gotten priced and doing their deals tpg today doing nerdy, nerdy, direct to consumer gig economy platform, transforming how people learn, and accelerating market expansion, but i'm

reading from a press release it values the company at $1.7 billion. the spacs continue it used to be a focus for the reddit crowd certainly when it came to spacs and ev, that's at least how we, through jim, got to learn about what was going on there. a number of weeks. in fact months ago but that has not been the focus this week, carl? >> yeah, i thought it was going to be, because we went into the week with that goldman, david kosta note about spacs being somewhat bubbleishs, but we got a curve ball handed to us. let's get to bob pisani. >> happy friday. lousy open two to one declining to advancing stocks the last day of the month. that is january. we'll see. we're right on the knife edge on this take a look at the sectors banks were the only major group that kind of opened in the green and they are also negative as well but china, which has had a great month, the big china etf, and dow has been declining for a few

days and consumer staple, the loser on the month, tech has done very well, down today, as you can see, all of the mega caps are on the down side. the earnings still matter and they have generally come in very good you mentioned caterpillar, those numbers were good but they're not going up stocks have not been going up. many of these stocks don't go up on good earnings honeywell was good i think the guidance was a tad disappointing. i think the street was expecting a little bit more. chevron was one of the few stocks that had a disappointing top line number for that, but perhaps not that surprising here as for the shorts, we've been showing you the heavily shorted names here, soaring here, in different levels, it's been quite a week here, but bed, bath and beyond, amc, express, and even i-robot one of the few that were a favorite earlier in the week not doing anything. here are some numbers on gamestop so at the open, it was, the market cap was about $26 billion. that's bigger than almost 50% of the rest of the s&p 500. it's not in the s&p 500. it's in the s&p small cap and

it's the biggest stock in the s&p small cap. and depending where it is now, maybe the second largest stock in the russell 2000. i believe plug power is the largest stock in the russell 2000 and this is number two. this gives you an idea this was a stock that was a fraction of this value just one week ago we care about it today, because the option, the weekly options, now these started on individual stocks several years ago, they generally, weekly options expirations, it may be an issue today, because gamestop calls so deep in the money and we're talking about a $40 stock last week, that is 300 and we don't know how it is going to end at the end of the day, so investors have to take delivery and sell those who are long, who bought the calls, have to take delivery or sell, so if you're long, you bought the call, and you have the money to get deliveries, you still have to pay for the stock, whatever strike price you had there, and if you're short, if you sold the call, so you're going to be able to borrow the shares to deliver and again, normally, this is not an issue, it never comes up but when you're dealing with these kind

of crazy price swing today, that came up, and the whole clearing issue around robinhood as well, of course, so we got to keep an eye on all of that as for the month, as goes january, that's an old saying, we're right on the knife edge. essentially the s&p 500 is flat. this was at the open at 0.8% we're flat for the month but the russell had a great month even though it is off of the highs. the nasdaq is off of its highs but still a good month and flat on the industrials. and the transports down 0.8% as for the sectors, the biggest, best performing global index still remaining china although it was down overnight. still good energy, banks, technology, and consumer staples and utility, the defensive sectors, they're the ones that had a tough time, right from the get-go. they never really had any juice at all behind them so it has been a fascinating close for the month. we'll see how the day ends up. guys, back to you. >> bob pisani, thank you.

chicago out just moments ago, chicago pmi, results came in at 63.8, well above the consensus estimate of 58.5 but david just to go back to the market, and more broadly, okay, all right, there you go. that's it. we will take a look at the yield and the ten-year right now, 1.09, percent, but we'll go back to carl as well as we continue to see the sea of red in the major averages >> morgan, thanks. one thing we've missed all week long has been the wisdom of our friend jim cramer, who is on the phone, and jim, for all of the viewers, and there are a lot of them, who wonder where you've been, can you explain your absence in the past couple of days it is a vast conspiracy for those who otherwise might want

to buy gamestop and i had a pinched negative and i'm trying to check out today, and you have all of these rules and i can't just walk out, and anyway, i just miss you guys and wanted to call in, and i did want to help people, because when you wake up and rib van winkle and you see gamestop at 342, you say will you please help them. >> yeah, jim, we're glad you feel that way. feel better. >> we have amc, sell 100 million shares, and i think american air is doing that but gamestop, i mean, i understand, my wife said to me yesterday, james portnoy came on and said sell it, well, okay, absolutely, i agree with mr. barstool this is crazy, guys. it's crazy >> jim, you can't even get away from it either i was listening to, i was trying to listen to sports radio this morning, the one here in the new york area, wfan, figuring all right i will listen to the latest on deshaun watson and where he might be going and they

are talking about stevie cohen and david portnoy and wondering why, how cohen will be impacted. this story is just impossible to avoid. >> i want to say, here's the deal, guys gamestop is a $23 billion company right now. frankly, even if it were operating on all griersears wou 5 billion. so it's more than four times what it should be worth. amc was a few days ago, adam aron, a very respectable ceo, he came out and said we are not bankrupt that's a real reassurance, right. his stock is at 13 just raised, what, 9 billion, some huge amount was it 9 billion >> no, no. they raised almost a billion, i think, yeah. >> almost a billion. he needs to raise about 9, 10

billion, rit come on. you've got to pay down debt. got to do something. >> jim, i mean it's been an interesting -- here you are, for years, right, on "mad money" and on this show, you know, we have been trying to inform, you certainly have been working to inform what you call the retail investor. >> the regular person. >> right, the merrymen they are different this is a different cohort to a certain extent. >> they are very -- look, first of all, congratulations to them. we all wish people who can make as much money and we wish they were making on apple or microsoft. they are making it on companies that the three of us know are actually not doing that well i am not saying that gamestop should ever have been as low as where the short sellers were selling because it, obviously, there was a very smart buyer, et ethan coen came in, the guys that - >> yeah, chewy. >> he bought a lot of stock at eight bucks. he is a bright guy 338. do you believe if you pull every member of the board of directors

right now, every single member, you know, every single member would sell it and their families and their lawyers and their doctors and the dentists would all sell it. that's what i don't like there isn't anyone involved with gamestop in any sort of way, shape or form who would accept the fact this company should be at 338 but people are buying if, carl, you see this, too, the system is broken for certain stocks, for the heavily shorted stocks and people are saying this is a home run take the home run. don't go for the grand slam. take the home run. you already have won you have won the game. you're done. >> well, but jim, to that point though, we were just having this discussion a few minutes ago, the population of names where the short interest as a percentage is this high is limited. so is the aftereffects of this gamestop phenomenon also limited? >> yes it absolutely is let's take the most visible one.

i am very close to bed, bath & beyond mark tritton, fantastic ceo, came out of target really amazing john dustin, changed there with a very aggressive process. and that's a stock it's hard to figure out was it worth ten no, i think the short sell pushed that. is it worth 36 i'd say 25 but that's of all these, carl, this is the only one that's a judgment call. but it's got 66% short the other ones are overly shorted and then you get down to stocks, anything under 5%. if you are thinking of a short squeeze you will be wrong because the company can alleviate the short squeeze. i called gamestop three times next week. now i am calling from the o.r. there is no doubt they should be selling. >> yeah, they might be towards the end of their quarter, and unable to until they report

numbers. mike santelli pointed that out most people have covered and so this is -- i don't know this is not just squeezing here. this is pure buying. >> gamestop has the ability to preannounce. people have the ability to go to the government you can go to the s.e.c. >> yeah, and i am fairly certain, jim, their fiscal year ends in a matter of days. >> look, these are just lawyers talking. this is the market at stake. when you have something like a gamestop which is making everything look like a farce, the treasury secretary hoo be talking about it we have people who are more scared about the stock market because of some dumb video game brick and mortar outfit. this is just nuts. we have got really great companies in america that are being written up all over the place. maybe they should crash because of gamestop? you know, you have to hand it to american airlines. they knew that they needed money. so they raised cash. i said bed, bath & beyond has a balance sheet, they don't need to do it

amc has a bad balance sheet, they do need to it it's called the balance sheet. gamestop could do a spot offering right now, reannounce the quarter and get rid of that billion dollars in debt that they don't need. but nobody wants to do anything that's commonsensical here and you have got these two sides duking it out and it's a tragedy is going on like this. and i don't care whether -- i am not saying reddit is good or bad. i am not saying the shorts or good or bad. i am saying the government has to step in and at least try to address the situation so the rest of the market isn't panicked by four stocks that are heavily shorted. >> jim, while we have you, j&j, your verdict >> that's a tougher one because, look, what you really want is, obviously, you want moderna because that's 95% or pfizer because it's 95. but if you can get a drug right now that is going to keep you out of where the hell i am, which is the hospital, then you want it. so i think we have to start

thinking there is perfect and there is good, and good is pretty damn good do i buy j&j i would like to have 95% you are not getting that does it save lives >> yes we are going to have to talk about the restful j&j's quarter which was excellent. and it's got the weaker dollar, all the drug cohort, it's a good stock at 2.5% yield. j&j under 150, yeah, but not much more than that. the one that is confounding is lily i am thinking that had quite a run. don't think it's on -- it is definitely on koed covid-19. it's on alzheimer's. >> right. >> on this gamestop, before they lose a lot, i mean, i am calling in from the hospital bed because of gamestop. it's just not right. >> that's exactly -- >> i can't watch people lose all this money. >> yeah, jim - >> sorry. >> it's morgan

i'm glad you are feeling better. i wanted to go back to that point talking about taking the home run and it will be a race to the bottom. if history is any indicator it could end badly. i want your thoughts on that, because that's going to be scary. >> i have nurses and doctors here saying should i -- i mean, these are real people here working real hard. first responders ask me about gamestop guys, have some heart. you know, company issue a statement saying we don't know what's going on. we want to raise money we don't have a good balance sheet. the short sellers, who really covered that short at what price, let's have disclosure, have a government investigation of how the trading went so this doesn't happen anymore because you have trillions of dollars at stake in an even stock market. we saw the flash crash take the stock market down. >> we know where this stock will end up we don't know when, but i know

where. i mean, i think you -- most people feel confident and we do based on the fundamental. >> i am calling from the damn hospital bed because -- >> right based on the prospects it has as - >> she is going to take my phone away i am looking at the stock and saying this is david and carl and morgan, thank you, and cnbc thank you for giving me an opportunity to say please don't lose a lot of money on gamestop. >> if you are robinhood, you have to be careful, too, because you don't want gaps down eeithe. you have to make sure -- you don't want negative equity to show up in these accounts and then you have an issue yourself. >> and you know, obviously, they can sell the long haul, they know how to get out of them. they should be selling against the long haul, which is a synthetic short. people are playing with fire, people playing with high calls, you know, like a 300 call up 250. we have never seen margin requirements like this

there is no -- we need louie brandeis and five other great justices to get involved the one thing that shouldn't happen people shouldn't read into the rest of the market in gamestop the numbers have been really, really good. and everything that i have seen, i have been trying to catch up and sneak when the doctors aren't watching and i feel pretty good. they are supposed to try to keep me down. there is the biggest joke. i said i have to call to tell the guys this thing should not -- and i am not against anybody who is long. there is no vast conspiracy against me or gamestop or anything there is just an overvalued stock. and there is three guys on and it's the ninth inning and you -- and you are down by one run, okay and it's a home game you don't need to hit a grand slam you can hit a single and you have just hit the single of a lifetime, all right? >> so, jim, are we doing to see you on monday? >> well, if you don't tell lisa, i am going to try to sneak to

the studio but maybe you guys can distract her so i can do a show you will definitely see me monday if i weren't on the operating table, you would have seen me yesterday. >> he was reading the j&j while they were operating on him, carl i can see that can't you? >> facetiming, you didn't pick up. >> sorry. >> so that's our job don't let them get hurt, all right? >> yeah. >> love you guys. >> you sound good, jim. >> good to hear you. >> i am in the marathon. >> jim cramer phoning in from t the hospital on this friday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla with david faber and morgan brennan stocks on pace for their worst week in three months as we close out the month of january all sectors are red. vix above 33, something to watch. obviously, checking in on some movers, j&j publishing some of its large clinical trial we have the chief scientific officer joining us on that news

later this hour. the reddit trade continues higher we will get you the latest next. first, pending homes, dianne owe lek has that >> they fell 0.3% from november but 21% higher annually and the highest december reading ever from the national association of realtors pending sales represent signed contracts on existing homes. an indicator of future closings. this is the fourth straight month of declines. buyers hit by record high prices and low supply low rates helped during the month as the 30-year fixed dropped in december. not enough to offset the prices. demand uneven across the country with the largest decline of sales in the midwest pending sales rose in the northeast and were basically flat in the south an west. this follows a disappointing report on sales of newly built homes in december as well. back to you guys >> thank you very much. as we said at the top, seeing a bounce again in the so-called reddit names, including gamestop, which is

already halted and resumed there is american, which actually is issuing some new equity raising of more than $1 billion after robinhood said it would allow limited buys of the volatile stocks today. david, interesting to see and hear jim talk about the urgency of people not getting over their skis. >> yeah, making a point we made many times gme perhaps at a 24, $25 billion value is a bit overvalued given the pros sects as a brick and mortar retailner a world that is moving quickly to digital distribution of video games. many of the analysts as you know who abandoned coverage at this point had $10 targets and the like on the stock. we will see what happens today it is up people are allowed to buy on the robinhood platform that's where i have been focused is robinhood and what that company has needed to do you heard the interview last night with the ceo of robinhood. and what they are going to be able to do to continue to focus on making sure theystay in

business, that they have enough solvency they took in $1 billion. but if you are in dreessen har wits, one the key investors there, you have just got to be making sure that their risk mitigation policiese are correct they have access to what they need in terms of the clearing houses and they understand what is going on with the customer balances when the stocks go from 335 to 120 in 20 minutes, it's kind of hard to figure out exactly how much you have at risk. and so we have got to at least warn people, it's possible, and this is from people who run these businesses, other businesses, not robinhood, it is possible that they have to stop people from buying these stocks again. it's possible that that could go into effect if robinhood feels like it is crossing certain thresholds. >> yeah. and certainly just last night, i mean, we also know that, to your point about that company trying to protect and save that

company, robinhood, that they did draw down on the line of credit from six banks that amounted to between 5 and 600 million. they did get that cash infusion of more than $1 billion from existing investors as well this is tame that is not on pioneered this democratization of trading and sort of forced everybody else that was more established in the industry to follow suit in terms of taking those costs, those fees down to zero, but it is a name that is poised to go public later this year in its own right as well. i also, again, brought this up in the last hour, but it also does shed that light and anybody who uses robinhood had this in front of them to read, you know, the fine print, whatever, to get on and use the site what the business model actually is for you to be able to get on as a user and trade and trade for little or no money essentially where that is being subsidized,

how that's being subsidized and how important your trade flows and that data actually is to the bigger more structural fundamental business model around robinhood, carl okay so that's where -- sorry, carl we are going to bring in ylan. another story is the latest events on capitol hill and the reaction there to all of this gamestop discussion that we have been having. >> reporter: morgan, republicans and democrats want to take a hard look at what's been happening this week. already both the house and the senate are planning to hold hearings on this and the chairwoman of the house financial services committee maxine waters said she was to rein in abusive practices. she is focused on short selling online trading platforms gamification and the systemic impact on capital markets and retail investors the witnesses have yet to be

announced. last night congresswoman alexandria ocasio-cortez connected what is happening now to the breakdown in trust in big institutions dating back to the financial crisis >> it almost felt like this week one of the reasons that there was this huge almost populous bottom-up type of rally on what was going on was that it felt like almost the first time that anybody was holding these folks who gamed the system accountable. >> now, a lot of the ire has been focused on robinhood. they tweeted there is should be an investigation as to why robinhood stopped allowing purchases of gamestop. that shows the need for a financial transaction tax on hedge fund shorting and s.e.c. regulations on short selling practices. the backlash is bipartisan with patrick mchenry saying while he supports fintech innovation any

market manipulation or pump and dump scheme should be investigated gun senator is warning against a knee-jerk reaction pat toomey is cautioning against needlessly inserting themselves into the market. he says that while congress should be careful about this, investors also need to accept the consequences of their decisions whether that be gains or losses. back to you. >> nice setup here let's continue the discussion with california congressman brad sherman. thanks for the time today. >> good to be with you >> chair waters didn't mention robinhood by name when she announced these hearings that we think we will get. no date either is the hearing about robinhood or something larger, do you think? >> i think it will get larger than just this one gamestop situation with robinhood a decision will be made as to whether those hearings are at the full committee level or

before the capital market subcommittee that i chair. and i think we have to look not just on how the markets affect the participants, but how they affect the entire economy. i am not a fan of day trading. i am not a fan of short selling. what we want to see our capital markets do is to provide capital for businesses that are actually functioning out there in the economy. all of this talk about gamestop and the company hasn't received any of this money. it's not building any new stores i don't think that the capital market should be a casino. you know, to the extent they are, we have to make sure it's a fair casino. i would rather go back to a period of time when the average stock was held for four years rather than just for six months. >> so that's interesting when we start to talk about required duration of holdings i mean, you are getting into an interesting area there

senator toomey notwithstanding, we did see -- go ahead. >> i am not proposing some law that says you buy a stock, you have to hold it for a year but we ought to have financial education in our high schools and colleges so people realize that the purpose of investing in a stock is because you believe it will go up over the long term not because you believe that you are going to beat the market by six seconds or six minutes >> congressman, the horse may have left the barn on that one i mean, advances in technology make it so that just by picking up your phone you can trade stocks, sell/buy within seconds. it's unclear that's going to change. >> i mean, you should t it allows you to drive a car over a cliff, average education, they told me not to do it. >> you're right, there is a lot of education what we try to do here, although many would attack us for doing that it's been a fascinating week to watch. i wonder when you talk about short selling as well, i would point out, and it's hard to defend in certain areas, but

there are short sellers who have uncovered frauds in the market through the years. when i used to do more reporting on that working with some of them, they were excellent policemen for the market so, you know, every regulation has -- brings something else unexpected i wonder how much you think can be done here when there is a full understanding of what occurred. >> well, in the u.k. and europe there is disclosure whenever you have a short position or half of 1% of a stock outstanding. we soout to take a look at adopting that. it hasn't destroyed the stock markets of the u.k. and e.u. >> congressman, in general should it be allowed to be able to short companies at more than 100% is that sort of the key area that a lawmaker like yourself might be honing in on? >> certainly no one short seller should be shorting over 100% in this case, it's hard to say who went over 100% because you

had a whole group of people who may or may not have been connected. at the other side you had those in the reddit group who were bidding the stock price up the stock price should reflect the real value of the company, not some tug-of-war between guys on reddit and guys in the c street suites on wall street we have got to get back to situation where we have long-term investment based on the value of the company not momentum investing based on idea that the company may not be worth anything or bitcoin may not be worth anything but i can sell it to a bigger fool and get out of it and make a profit. >> when we see ocasio-cortez and ted cruz agreeing on something like this, at least in theory senator toomey's comments notwithstanding, do you think

that there is enough circularity where policies are possible? we talk about the lack of bipartisanship of the issues you are hooking at do you think this the most bipartisan >> well, i think there is a bipartisan angst that something is going wrong here, that both on the short selling side, but also on robinhood creating a relationship with its customers and cutting them off for no apparent reason. and so i think -- but i don't see cruz and/or ocasio-cortez focusing on the same piece of legislation. so i think that right now the unity is just on something's wrong when a stock was worth $10 a few months ago the company hasn't changed it's not like they developed a vaccine, and now it's selling for $480 and down to $380 and maybe it's worth nothing and

maybe it's worth $380. our capital markets should reflect the value of the company. and the vast majority, you know, you have the ticker on the bottom there the vast majority of the stocks are being bought and sold by people who think that's kind of the fair value of that stock at the present time given the company's prospects. i don't think anybody involved in gamestop really can make that case >> congressman, the hearings are going to be big news at least for our audience, and we thank you for giving us a peak as to what might be discussed. congressman sherman, thanks. have a good weekend. >> good to be with you. >> as we head to a break, j&j's long awaited vaccine trial data is out this morning and we will talk to the company's chief scientific officer that is next stay with us

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yahoo! japan is out with vaccine news this morning. meg has a special guest, j&j's chief scientific officer paul stoffels take it away >> david, thanks dr. stoffels, thanks for being with us. the world was waiting for this news, the first trial in a single shot vaccine for covid, but you are starting to see people comparing the 72% efficacy in the u.s. versus the

mrna's outcome dr. fauci said that would be spectacular. how do you respond to those comparisons we are hearing this morning? >> well, meg, this study was done at the height of the epidemic across three different continents when a lot of transmissions were going, a lot of variants were circulating so we have been able to thoat across that we got 85% protection against severe disease, 100% protection for death and 100% for hospitalization. you look at the challenge of the pandemic at the moment, it's exactly that it's people dying, people get to hospital, and people getting to intensive care so it showed that across the regions, including in south africa, where 90% of the patients were with the south african strain, we got this very high protection, including protection for death and hospitalization. that's where we think it's important. the second thing is the onset day 14 after a single dose, it's

maturing day 28 and further. so we'll learn more as we speak in the coming weeks. and then it's this variant which is starting to be very worrying as it has taken over most of the infections in south africa, that's showing up in the rest of the world. so growth spectrum very significant protection is the key takeaway for us. >> of course, we know that that variant, that originated in south africa known as b.1.351 was detected here in two cases unrelated with no travel history in south carolina suggesting we have community transmission. to some extent of this variant in the united states i talked with the vaccine scientist at chop this morning who said your efficacy against that variant was outstanding i mean, tell us what you saw in south africa in particular the severe disease outstanding, i should say, what did you see in south africa for severe disease? >> well, for severe disease we saw 89% protection and complete protection for hospitalization

and death on day 28. so that's very remarkable. it's a combination of antibodies, but especially also t-cell immunity. the vaccine when we developed this was selected based on high antibody response, but also cell immunity. we did a lot of research over the last several years of optimizing a vector and combined that with optimizing the vaccine, the covid-19. so that's what we observed we only know in a week we sequenced the strains and it was clear that it was a south african strain present in our study with that type of protection, 89% for that and for hospitalization. >> so you did the sequencing in south africa knowing that variant was going to be very important as you looked at the results of from this trial how much sequencing were you able to do of the u.s. cases know if there was any effect on efficacy from variants here in the u.s.

>> that's ongoing. we have more than a 450 cases, moderate to severe, several hundred coming in at the moment because this is a study that's still ongoing. we will learn as we go in the next few weeks as the sequencing information becomes available. sensitivity by region, by population, we are going to learn a lot in the next few weeks. but as the south african variant was so significant to the world and so worrying, we made sure that we did that work first and we were able to show the significance in activity on the strains and we determined those strains were, in fact, variants. >> tell us about the regulatory path forward we understand you are going to apply for emergency use authorization with the fda here in the u.s. next week. what kind of timing are you expecting then for this to potentially be onle the market? >> the team have been working with the fda on discussing the transmission of the data so that's already happening now.

next week we will submit in the course of the week a file, the summary of all the data. and then it's up to the fda to take their time to evaluate and that will probably lead, if it's deemed sufficient, to an advisory panel in due time and probably that can still happen in february but that's up to the fda to decide when they do that and we'll wait for a response from their side when the fda advisory panel will be called >> and what can you tell us about your supply? if this gets on the market in february, how many doses could you have here in the u.s.? >> i am not going to talk about number of doses as that is also dependent on, first of all, the fda approval and eua approval and approval from manufacturing sites. that's ongoing we have a commitment to the u.s. government which we were to deliver vaccines and that is public we will deliver that as we commit. >> doctor, to dig that that a little bit more, with some of

these other vaccines being deployed right now, obviously, a complicated and tricky process in terms of manufacturing and then also in terms of delivering and getting them into people's arms how is your vaccine different? i think it's worth reviewing that begin the fact that it's a one shot dose. >> a different production process. it is grown on cells and we have that very much under control none of these manufacturing was readily available. so we worked the u.s. government and partner companies to, within 12 months, we started last march when we knew we had to go to a very large-scale manufacturing upscaling in the u.s., in europe and now also this india. we hope that we can get to -- we are working towards 1 billion dosages in the course of the year, and in this case that will mean 1 billion people vaccinated with a single dose it's going to be an upscaling throughout the year with doses

available very soon after immediately approval, but it will be an upscaling through the year >> dr. stoffels, we know that you are also extesting a two doe regimen of your vaccine. how do you look at the data today, including on the b.1.351 variant and think about the context of needing two doses or perhaps an updated version >> we studied the two-dose vaccine because we knew that we need to have long-term protection we know that the optimal timing between the one and two is somewhere between two and three months so that's why we started the study with a two-month interval. that will give us a good idea how long and how strong we can do that and whether it's needed. but in the pandemic now, it's important that people get vaccinated as fast as possible with a single dose with the 85% protection against the severe disease and full protection of hospitalization and death vaccinating fast will

take out the difficulty in society, which is hospitalization and death. and hopefully with that we can prevent that in hundreds of med millions of people already in the course of the year before the data of the two-dose will be available. >> you have analysts who follow the other vaccine developers out this morning with notes. michael yee at jefferies who follows moderna saying that j&j will be used in some global regions given dire need but we believe it's a two tier system with mrna leading as the platform is that a fair assessment? >> maybe if you look superficially at the data, you could say the difference between 90 and 72% is different. but we are in a totally different time at the moment with variants and the huge transmission and the real-world evidence we have generated in the world with the data i just talked to you about, with the high protection, is very significant for public

health in addition, the vaccine is very favorite storage continues we can distribute it, and that will also facilitate large-scale deployment therefore, i think the whole, if you take all the features together, we have a very simple tool to prevent a very severe consequence of this disease on a global scale that what it comes down to to get this pandemic quickly under control globally. >> knowing that we have this b.1.351 variant in the u.s. but suggestions of community transmission, what do you think that the pandemic here in the united states looks like in the context of potentially your vaccine coming to market, but what are we in for here? >> yeah, you see that the u.k. variant, it's called the u.k. variant, but it emerged in many places in the world. it's called the south african variant. it has emerged independently in

other parts of the world it's a logic implication of virtual multiplication and the virus evolves. we need to be very careful that we need to take very strong action and fast to make sure that we reduce the burden of transmission very quickly so that mutations cannot take place, continue to take place. we need to be very vigilant on eventually adapting the vaccines if that's needed and also we already, we didn't know these results until a few days ago, we started working on the south african variant as an additional booster, but we will see whether that will be needed with the clinical results we have we have to stay vigilant and make sure we adapt vaccines as quickly as needed. it is a big risk of new strains taking over at the moment, and we have to stay vigilant to prepare for that >> all right dr. stoffels, we really appreciate your time this morning. thanks for being with us.

>> my pleasure and meg, thanks to you for bringing that to us. now to our "etf spotlight. the vanguard communications service etf. the ticker is vox. it's up more than 20% the last year led hire recently by one of its core holdings. yeah, amc. one of the reddit trades of the week, up more than 140% for the week you can see up another 43% today. a reuters report saying the company is exploring raising more capital, including a potential of stock capitalizing on that huge move up in shares for a company that, well. >> its prospects don't look particularly good, at least near term we're keeping an eye on that story along with the other major reddit trades ofheay quk t seet" is right back

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some of the nyse most actives today look familiar. amc, nokia, blackberry, pfizer express on the list. the s&p is holding higher for nuy 1poh on this last day of

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♪ good morning, everybody i'm sue herera here is your cnbc covid update minutes ago word that european regulators have authorized the astrazeneca vaccine for use in adults there is an ongoing dispute between the company and the eu over astrazeneca's inability to initially deliver as many decembers as expected. the u.s. has reported 4,000 or more covid deaths. the total for the pandemic is now above 433,000. that's equivalent to the population of oakland. the case count however stayed below 200,000 for a 13th consecutive day. kaiser health news looked at data from 23 dates finding black recession are getting vaccinated at lower rates than white recession. that has some lawmakers calling for action citing higher covid death rates for black americans.

and the nba's miami heat team is using covid sniffing dogs to check fans before they come into the arena. attendants are still being sharply limited and masks of course are still required. you are up to date back to you, morgan. >> sue herera, thank you. let's go to leslie picker for closer look at the business of robinhood. >> robinhood now allowing users to makes limited buys in the stocks and options that were restricted on the platform yesterday. that hasn't done much to quell the heat on social media and, of course, in gamestop's stock after robinhood restricted purchases of certain securities on their platform, users became en enraged and distrustable of the commission-free brokerage that promised to deck automatictize finance for all. robinhood said they were protecting their company a risk management necessity for them due to volatility in certain names that can cause a

liquidity issue, broke rings like robinhood have to post a certain amount of cash to meet s.e.c. capital obligations there was not a liquidity issue but it seems to be pulling all the levers to get cash w every heard from courses they are drawing down hundreds of millions of dpolers from jpmorgan and goldman sachs so s shore up the balance sheet now, robinhood's ceo embarked on a media tour last night starting with cnbc in an effort to defend the company's recent moves. >> i know how color ex and lysol felt in the patrice bergeron when they were running out of hand sanitizer and supplies. we just haven't seen this level of concentrated interest market-wide in a small number of names before

>> now, david, we talked about this before, but earlier this month robinhood deep in preparations for an ipo, a stock offering, and i called around to sources on this. no surprise those preparations have been deprioritized for time being as robinhood tries to put out fires on a multitude of fronts david. >> yeah, i mean, leslie, so glad for your reporting they are fighting for their life in a way given the volatility in the underlying shares which of course so many clients are trading, they have got to be very careful to your point, they have, obviously, been successful in raising some new money that is going to help, but i have been making the point because others made it to me, there is no guarantee they don't find themselves in a similar position where they have to stop buying in certain securities again. >> oh, that's right. that's absolutely true and that's part of the driving factor for why they are seeking to raise all that cash you know, this thing isn't just limited to robinhood thesov vensy of robinhood, the

stability of robinhood is important to the whole financial system we don't actually know how interconnected this company is with the rest of the markets so it is certainly something to watch as we look at just the inner-connectivity with regard to the entire financial system now. >> thanks for your reporting that extreme volatility we are seeing, of course, is, well start with the next panel. the chief investment officer at calsters and michael frerichs as well chris, starting with you a long-time participant in our capital markets. let me ask you the question, given what you have seen this week, what are you thinking about? what is your sort of takeaway, if there is one to be had so far? >> david, it's really that this is a symptom of the excess we're seeing in the markets. you have been around, talked to art cashin it really feels like 1999 all over again and this is really a symptom of

the stay-at-home situation i mean, this is excessive cabin fever. people have not been able to go on vacations, so they are speculating in trading since it's commission free, it's the excess that we are seeing in this frothy market. >> as somebody who makes allocations to hedge funds, what are your thoughts in terms of the risks that we at least some of them didn't see coming from this move to sort of gang up and really squeeze them when it comes to some of that are shorts >> yeah, i knew it was something when my son-in-law tweeted me this week and wanted to know what short squeeze meant i realized, okay, millennials are on to this we invest in two styles of hedge funds. we are not involved in the people that really are market neutral or long/short. and i think that it it's a wake-up call that a crowd is okay, but a herd or a swarm is scary and it can wipe out the markets. short squeezes have always been

a risk to these people shorting is a risky strategy hedge funds know that. this is incredibly unusual and has a lot do with the pandemic, everybody's staying at home. >> the treasury's office actively manages about $35 billion. how are you thinking about your allocations as well in the midst of this? >> this doesn't change our approach we don'tcurrently invest our portfolio dollars in hedge funds. i serve on the board of the illinois state board of investment we have over $20 billion when i came into the office we looked to get out of our hedge fund positions so this hasn't affected us it's been fairy positive this is a great reminder there is risk when you play in the market these hedge funds should have known this as professionals. >> wait, why is it positive? i i'm curious. why specifically is it positive? >> i think you have seen we have been invested in gamestop before

in long opositions. we invest for the long term here that's the advice we give to people there are day traders, people hopping in and out and they have to understand there is risk. when we sauk about the son-in-law, talk abtalking abou short squeeze, millennial investors are getting caught up on social media and making investments and not having full access to information. >> chris, listening to you talk about it being about excess saving and being stuck at home, i mean, assuming the vaccine eventually gets to most of us and we resume normal economic activity you would expect this phenomenon not to fade but flatten. is that your case? >> yeah. david, sorry, i have got to admit that i think that when we get back to work and we have to be at a trade desk and interact with people and socialize, some of the stage rating has to ease off. we saw that in the 1990s, carl,

when trading finally eased it slowed down and these people came out of the market and i think we are going to get back to that long-term fundamentals actually still do matter. we are just not living in this world right now where it's heir apparent. >> chris, while i got you, speaking of fundamentals, exxonmobil, again given the news flow this week, we haven't had a lot of chance to focus on it, but you are there. t.d. shaw. a lot of conversations you nominated a slate or at least engine one did what are your expectations in terms of exxonmobil and the response to the pressure that you are putting on them? >> i think they are paying attention. they are listening they have been tone deaf to shareholders for far too long. i have said that before. and i think we are stepping up our game we are being a more activist shareholder. so we own almost every company in america we have held them for 30 to 40 years. we are going to hold them for 30

years. we want these companies to think about the future i think exxon is finley waking up i am optimistic. i shi shareholders are excited about this change and a change at the top so hopefully it will change the tone at the top of that company and they will be more resilient and look into the future and pay more attention to how the future is going to be a low carbon future. >> so you do feel like you are going to get results in terms of some of the things they do, whether it's capital allocation and/or perhaps more concrete effort in terms of carbon? >> i absolutely do i am actually optimistic that our slate is going to win and take over their board and change that company from the top. that's what's got to happen. oil companies have got to wake up and decide do they want to be energy companies into the future we are going to need hydrocarbons, even though a lot of people would love to get rid of them, but you are not going to need as much and they have to change the way they work and the

way they operate climate change is now back in the forefront. forget all this gamestop stuff climate change is real it's in front of us in the next decade to two and companies have to adapt, adjust, or die rz. >> yeah, as it stands right now, you need hydrocarbons for a fair amount of manufactures and clean energy technologies which i think is probably something we will see continue to evolve as well michael, i realize it's a down day for the mark and certainly one of the themes, one of the things that's being talked about i think broader de-risking right now in the midst of gamestop it's really a relatively small handful of smaller stocks that are heavily shorted that have really sucked the oxygen out of the room this week but the fact that the major averages are still hovering pretty close to record highs right now, i mean, what is your outlook on the broader markets also, for that matter, rates while we're at it for 2021 >> we feel pretty good about the marjt in general

gamestop will pass people will get out of their short positions. we will move forward we need take time to look at the s.e.c. and how things are regulated. one of the big problems in a lot of the anger out there is because the little guy who was treated differently than the institutional investors. that's a problem and that's something we need to look at here if our markets are being to function properly, if they are going to fund our capital accumulation for our businesses so they can grow, we need to have transparency and rules that are followed to stop market manipulation if the s.e.c. can come in and work on those issues, we are bullish on the future. >> okay. gentlemen, thanks to you both. appreciate it. >> thank you. meanwhile, guys, keep an eye on the reddit names. relative stability compared to earlier in the week on gamestop, which is trading in a pretty narrow range here. not quite back to the highs of earlier in the week when it hit 483. we will take a break here, be back in a minute

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record volumes on wall street this week what it means for your portfolio even if you don't have exposure to names like gameop ndut on tradingnation.cnbc.com more "squawk on the street" coming up.

the trading platform robinhood embroiled in controversy after suspending trading in some heavily shorted stocks yesterday including gamestop, amc, blackberry, nokia. the company's ceo speaking to our andrew sorkin last night here's what he had to say about the move >> i want to address some of the misinformation that's been out there because there is a lot of it we absolutely did not do this at the direction of any market maker or hedge fund or anyone we route to or other market participants the reason we did it was because robinhood is a brokerage firm. we have lots of financial requirements, including s.e.c. net capital requirements

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we respect the role of regulatory agencies. they are closely monitoring the situation, but it's under their purview at this point in time. part of our education is conveying to people the s.e.c.

is the regulatory body that would oversee this and can speak to it further. >> that was white house press secretary jen psaki on gamestop retail trading frenzy. the s.e.c. releasing a statement earlier in part saying that, quote, they will act to protect retail investors when the facts demonstrate abusive or manipulative trading activity that is prohibited by law. former s.e.c. division of enforcement senior counsel and partner of dixon wright. thanks for being with us this morning. can that case be made, that statement we just read, from the s.e.c., can that be made here? >> the answer whether it can be made is driven by the evidence, and that is you're talking about what role the brokerage firms were playing in the process in terms of limiting the ability of individuals to trade i tend to believe that was proper the reason was we're forgetting

brokerage firm customers sign customer agreements, and those customer agreements enable the firms to do what is necessary in terms of ensuring customer protection but what is in the interest of the broader customer base at the firms. more bradley in terms of customer protections what could come at the end of an enforcement investigation. and we really don't know what that actually means or will lead to there will being an investigation on all sides the question is is social media being used as a discussion of issues or for the purpose of propping up the price of stocks or depressing the price of stocks the latter could well be stock manipulation so i think there's a long way to go my view with respect to the s.e.c. is what it should have done several days ago is used its trading suspension authority. it doesn't have to be for a

ten-day period as we see with small cap stocks the statute says up to ten days. i think the s.e.c. had an ability and has an ability to create a more powerful pause as these companies blow through the circuit breakers but that is the challenge of an agency that is still awaiting a permanent chairman, permanent enforcement director of trading and markets. >> for sure. and the timing given that fact is certainly worth noting here you just said a lot. there's a lot to unpack. i want to go back. i realize that if you're using a platform like robinhood or one of the other platforms as well that made similar moves yesterday in terms of limiting certain types of trades in certain stocks that is your prerogative as that company and certainly you can debate what that meant in terms of liquidity issue at a company like robinhood and everything else. but i'm curious, i could understand accounts with options expiring today that you could

freeze or limit, maybe have them be liquidated because of a concern of a capital requirement. certainly we've seen things like that happen in the past. the fact there was a blanket freeze, at least it's my understanding, there was a blanket freeze that anybody buying options including further out in the future or even trying to buy the underlying stock of some of these names in general couldn't do it how unusual is that? >> it's all very unusual, but we really are in uncharted territory. the other component we have to put into the mix is margin calls. in other words, you have a lot of investors who are approaching the trading, including we're talking about uncovered calls, uncovered puts we don't know what all of those underlying dynamics are. and there is an issue of solvency for these brokerage firms if all of a sudden there are a lot of margin calls, which firms do need to make when people are not satisfying their marginal requirements, and that could actually impair the financial well-being of these

firms. these firms also have obligations to all of their customers, not just individual customers who are trading. the only other thing that i think relates to all of this the focus is on long the affect on customers and competing with shorts i'm very much of the view the shorts have a necessary role in the markets to ensure proper pricing. there are a lot of factors that really come into play here and it's a weighty decision that these firms were making. >> all right there's so much more we could dig into here. unfortunately, we're up against the end of the hour, jacob thank you for joining us >> anytime my pleasure. >> nice to see jacob on our air again. take a look at those reddit names that have gotten the street's attention and will continue to do so. dow down 210 "squawk alley" starts in a moment

good morning it is 8:00 a.m. at robinsonhood quarters in menlo park, california "squawk alley" is live ♪

♪ ♪ well, happy friday and welcome to "squawk alley." i'm jon fortt with carl quintanilla and deirdre bosa the reddit rebellion is where we're going to start this morning. gamestop resuming its rally now up 73% plus. amc also up 56%. blackberry up about 10%. survey of the shorts our next guest is saying the recent reddit trade is, quote, the messy middle of a revolution early robinhood investor and inside.com founder joins us now. jason, what a story. what an in