>> qualcomm reporting next week should be a blowout. >> you still in jumia, steve >> yes, i love it, and the stock is unbelievable. >> twitter wanted me to ask you. that is why i did. farmer jim >> marathon petroleum and earnings tuesday and we will talk about it then. >> take a deep breath, everybody, and enjoy the weekend. "the exchange" is now. well, it is not the weekend just yet, but hello everybody, and scott is right, take a deep breath. i'm brian sullivan and this is an incredibly busy friday capping off a heavy week of trading and reddit rally rolls on, and a stock of vaccine news can't keep the overall markets higher. has the fiscal share come for robinhood and forced to raise cab tall and too many stocks on

gamestop and does it put the entire company at risk and bill de blasio says that the companies need to do this to ramp up the vaccine rollup, and we will talk about that with the mayor and when we can ramp it up. and so markets are down in a big way. dom chu and the smartboard of stocks to watch, and it up one and down the next and that is what it seems this week the new normal. >> the new normal for this week is right because there is continuing chatter among the trading desks of the gross down or the taking down of the risk on the short and the long side for many folks out there, and something to keep an eye on, but what it is leading to is the dow down 657 points, and the lows down 667 and that happened in the last 57 minutes here, and the s&p 500 is down 82 points and down 91 was the session lows and again just in the last 10, 15 minutes or so, and the nasdaq

k composite is down 2.13. and bit technology is part of the nasdaq and the s and the p and the dow, but apple down 5% almost. microsoft is down 3%, and amazon down 1%, and alphabet down 2.5% as well, and these four stocks and the next 6 to 7 biggest in the s&p 500 are all in the red. that is what is driving things. mega cap stocks especially the technology oriented all downside, and this one this is one we have not talked about the downside, and this is one of the biggest mall owners and operators in america, and a real estate investment trust, and they are down 11%, and $17 a share, and the reason i want to highlight this, brian, is that this particular stock share's

biggest hold ser the ontario teacher's plan, and they had in the span of one day on the 27th, they got rid of the entire 24.5 million share stake on that surge up on the stock. so if you are caught in the short squeeze, other people will sell into it including sometimes the single largest shareholder in any one company. back over to you,bry. >> well, i am not done with you dom. there is a mall outside of vegas sold for $1.5 million and recenrecent ly assessed at $28 million for a mall out there in the desert, and that is telling you what happens out there in the mall. but if you are a hedge fund with teeth kicked in by the reddit rebellion, and you are looking for the margin calls, you are selling what you can, and so is some of the names like apple easily transactable, and margin

calls have something to do with the margin calls >> well, it is a factor and that is what the gross down or the flattening of the positions. what you are looking to do is t close down the shorts and selling some of the longs, and it is a risk management tool for a lot of the funds. if you have a risk model and quantitative measure for what you have at risk in the market for any given time, and if the models are too far out of whack with what you have at risk, you have to take them down to flatten down the cash, and that is maybe what is happening with the hedge fund world andwhat w are looking at some of the gross down phenomenon, pribrian. >> that is why the var, value at risk, is a wonky term and i am glad that you brought it up, dominic chu, thank you very much. it is a wild week of populous shocking the nasdaq, and the s&p 500 and dow on the

largest pace of largest weekly losses in three months and the largest since october. joining us with the reaction to the moves and where to go from here is kim forest at boca capital partners and mark smith, vice president and portfolio manager at bo wealth manager, and up or down 500, and the same question to dom, do you think it is people selling to raise money in the face of either needing to or simply a little bit nervous about where the markets may be right now? >> i absolutely agree with that. and actually in talking to some of my peers wednesday, we figured it out, because the super winners were being sold which makes no sense, because the ones that had reported like apple, they are doing really well, and looking into the future, and if you a fundamental analyst like i am, you are saying, why are you selling

this it is because especially in the semis, because they got sold down earlier in the week, and it is not because there's a suddenly not a shortage of for them. it is because those were the winners, so if you had to shove some of the money towards the other side of the balance sheet there. >> yeah. you know, mark, you are going to be sitting around the dinner table tonight or you are going to be like, i thought that i was going on to talk about health care, and the dog gone anchor asked me about gamestop, and i am, but how do you make sense or do you have to make sense of what is going on right now, and do you think that it is a phenomena that came out of nowhere that can continue, or is it really affecting a smaller group of stocks that are heavily shorted and low liquidity and easy to muscle around? >> brian, i think that you got it right. this is the cryptoization of wall street, and you are seeing with it.

a few names and not all of the markets, but when you have crypto currencies going up and down 10 to 20% for no reason at all, is it to wonder why you have millennials going in stocks that have no customers, no revenue, not going to beat guidance any time soon and the stock is up 100% in a day. this is what you are seeing. all of the proliferation of the cryptocurrencies and we don't know why it is going up or down, and no one can explain to me on the broadcast why it does, and now it is going to be leaking into the names that we all know, and a lot of the reason that, and a lot of the reason is because folks are following the momentum and not the fundamentals. >> well, and, mark, a follow-up to you before i go to kim, but there is nothing wrong with that, and that is what the hedge funds do all of the time, and here is the thing, somebody, and then others who were followed by others figured it out, and they figured it thought the hedge funds -- to be frank -- acted

stupidly and piled in and left the stock vulnerable to the incredible squeeze, and good for them, they figured it out. >> they figured it out for now, but it is going to end now. there is no way to have the tulip, and i don't know if you remember that there was 250,000 a tulip bud, but this is the same way of no fundamentals and this is going to end badly, and some companies are not touching it, because they are afraid of arbitration and sued by the investors and i should not have had my entire retirement account in a stock with no customers and in the middle of a pandemic when nobody is traveling and stocks where nobody is traveling and you can best believe it is going to be ending badly for the average investor, and right now, it looks like the big guy lost, but stay tuned, because the little guy is going lose, too. >> well, a lot of people made some money, and i wish somebody

would say, hey, sullivan, we put all of your money in gamestop, and alas, kim, that did not happen. in the weakness, are you picking up bargains out there outside of the names that we keep talking about, and give us a different name. >> right. i did look at the semiconductor complex, and some are down for good reason, and some are down for no visible reason. so, you know, micron has sold off of the recent high, and that is a n area that we are looking at, and this is not going to make people happy, but mattel is making a stumble, and their biggest competitor is making a gain, and this is amd and the company is maybe going to go in a different direction, and it is very much like, and i'm not saying the outcome is going to be the same s and let's make it perfectly clear, but it is kind of rhyming with microsoft in

2012 when sat yaya nadella camen and he did things that the street didn't like because he wanted to break the company apart and he had a better idea. so i am looking at the new ceo thinking that he probably has a better idea. i am sticking with that name, and plus, a severe short for the semi, right. >> well, some new names there, and mark, i promise that the next time you get on, we will talk about why you are here which is health care and thank you for flexibility, and big story. thank you, kim forest and mark johnson. >> thank you. and the squeeze continues as robinhood continues in trading with gamestop andothers. and now, vlad tenev is saying that they have move stopped trag

in certain stocks is best for some companies. >> i want to address some of the misinformation because there is a lot out there. we did not do this at the market maker or anybody that we route to, and the reason that we did it is because robinhood is a brokerage firm we have lots of financial requirements including s.e.c. net capital requirements. >> but here is the problem. robinhood is not just a broker, it is a clearinghouse as well, and without getting into the weeds, what it means on the basic level is that it has a lot of money at risk, and it had to go begging to the venture capital partners last night to shore up the books. and let's bring in our friend, former colleague katy kelly crack new york times reporter and has the latest on the emergence of the robinhood's money, and without getting into

the weeds, they are not just a brokerage company, but they are subject to the same rules of the big names they are trying to displace, and it burned them yesterday. >> yeah, brian it is an interesting story, because a part of the value proposition of robinhood and the reason they are popular is because of the simple democratically trading app where you pay no fees and you get a swift and attractive execution on the stock trades, and people were taking full advantage of it as you know in the last few days certainly, and weeks, and it is becoming an immensely popular app in the recent past. but the thing is that they are dealing with people's money here of course, and in a t plus 2 or 3, and you get a trade and two or three days go by and the money associated with the trade is wired in or out of to account and into another account, you are dealing with real cash here. and when volume and volatility

spike tremendously, and when the flat stock of a stock like gamestop is going up to $200 or $300 dollars in a stratospheric rise, and i understand that a lot of people were trading options which is a cheaper way to go, but still, that means that the cash that you needed to have on hand in order to settle the trades to make customers whole is much greater, and not the mention the regulatory requirements that vlad was referring to according to the s.e.c. or the member organization, the clearing organization, the depository trust or the corporation which is what triggered yesterday i think. >> yeah, and it was also just the jamming up of one stock for the most part gamestop. so, right? they never anticipated that volume, and value at risk and dollars at risk, and so if you have any idea of going to sequoia or reddit and we need a

couple million bucks, and i want to be careful of the language, robinhood's financial situation overall, and if this is a -- >> whether they were in distress. >> and listen, we did it in '07 and '08 and you have to be careful with the language. >> yes, absolutely, you do, and i'm the first to agree. you don't want to call false fire in a crowded theater. so i don't want to say that it is a an emergency as we called it in the story, but they have roughly 100 investors and went to the current investors and people who have skin in the game, and they said, we would like a quick infusion of cash, and we will make the terms good for you, and this needs to happen quickly and they did it essentially within a day. but robinhood would argue that the issue for them with the

unexpected volatility, and the obligations under the financial regulations is that the dtcc had increased the margin requirements, and so that the cash cushion that they needed to have on hand, and separate conversation to be had of whether they should have known about that in advance and they should have had a liquidity risk management strategy ahead of this to where they didn't get into this position, but nonetheless. >> kate, that is the point. they seem immature about it. i guess i am not trying to insult them as a team, but maybe they could not have never anticipated this level of interest, i get that, but it makes you wonder, do you not have some kind of cash cushion, and some type of strategy. this is what we are worrying about, the companies that are unable to handle these black swan type of events, and that is exactly the point. >> yeah, no, i think that should be a concern for everybody. and actually speaking of an earlier event in the saga of the

teetering fund that played a point in steve cohen's fund being down 18.2% earlier in the week, you saw contagion in the hedge fund world that seemed to have been contained, and there could have been contagion in the brokerage and clearing and counter party world, so we are not out of the woods yet. it is logical, and laudable what robinhood wants the do, and clearly a market eager for it, so that is important to acknowledge, but on the other hand, they are part of the broker/dealer highly regulated system in the the united states, and there have to take certain steps to trade smoothl ly and t make sure that the customers' money is protected. >> yes, the two founders were or are billionaires and we will

see, and they are partnered with two billionaires ken griffin and citadel, and they may be free, but they are big players. so we will check out your story with our colleague andrew ross sorkin. >> thank you. >> and so now the push for mass production and we will speak to new york mayor bill de blasio for his call to the pharmacies to standdown and some of the patents and opening up schools and restaurants opening up safely. and plus, the frenzy of trading in certain stocks and now getting the attention of some members of congress who are calling for hearings potentially investigations. all right. heading to the break, we are looking at the heat map. and j&j, and the stock is down, and 3m and the dow is now down at a session low of 730 points. 2.5%.

we are back right after this.

all right. welcome back. moments ago the dow was down more than 700 points and pretty much at that mark right now off 695, 2.3%.

a lot of broad market contagion either causesed by the reddit rebellion and the margin calls that we talked the about and the market is down 700 and also by the way, the vix is soaring. now we called the vix the quote fear gauge, because it is generally going to mention the option spread, but theday it is not a measure of the spread, but it may be measuring the options market. and today it is up 22%, and seven points on the vix and up big this week, and of course, the huge spreads in some of the options as well, and that is really what the vix is designed to mention and measure and despite we call it the fear gauge, and we don't know if it is fear or volatility, but the vix is up 22%. though robinhood and reddit and gamestop are grabbing the business headlines, maybe they should not be. there is a double dose of good news on the vaccine front in the last 24 hours which is incredibly mportant. j&j is out with the trial

results of the one-shot vaccine and this as the pace of vaccinations was more than 1.5 million a day. we bring in meg tirrell, and welcome. there seems to be some confusion over j&j's vaccination effective and the data points seem to be more positive than 66% number may suggest. no >> yes. absolutely, brian. part of the confusionis that i was a massive trial run across three continents and 44,000 people, and because it was run on three conncontinents, it cape all three variants like the one in south africa. and we have seen that it is 72% efficacy, but it has not sequenced every variant, but globally, because they have the variants in south africa, 66% overall efficacy against moderate to severe covid-19, and

importantly the vaccine prevented severe covid and death at 85%, so they kept the people out of the hospital at the really high rate with a single shot. in addition, this vaccine can be stored in the fridge at temperatures the of 36 to 46 fahrenheit for three months so it is going to be easier for the distribution of a vaccine like this. of course, we are worried about the variants like b.3.351 and two cases announced in south carolina not related to one another, and no travel history suggesting that there is potential community transmission here in the u.s. we talked to the chief scientific officer paul staufls about what it means here in the u.s. and the vaccines, and this is what he said. >> 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

adapting the vaccines if that is needed, and also, we didn't know these results until a few days ago, and we started working on the south african variant as an additional booster, but we will see if it is needed with the clinical results that we have. >> so brian, people are looking at the results and comparing them to the 94, 95% efficacy with pfizer and moderna and that is why j&j is down, but there was some up 62%, but dr. fauci saying in the absence of the mrna vaccines is, he called the results spectacular. >> and the ceo alex gorseky a man that you know well, he is going to be at the event on february 9th, and so now that we have the promo out of the way,

and nova vax that you mentioned up 60%, and good interim trials on their covid-19 vaccine, and what do we know about nova vax. is that mnra or is that more of a traditional vaccine? >> it is traditional, but it is not like j&j, and it is a protein vaccine and more tried and true unlike any of the others. they ran their trial in u.k. and what we found was 86% efficacy, but against b.1.51 and south african is that variant is 89%. so what they are going to do is

to file in the united states, but we will see what the fda says about that. >> and meg, this is friday and earlier this week, we had good treatment out of eli lilly, and 1.6 million vaccines in the arms, and so there is good news in this fight overall, right >> there is, brian, but with the variants here in the united states, and in the spector they could lead to increased spread, we have to be so careful. i love the optimism, but i have talked to so many people in public health more worried now than they have ever been, and that is scary. >> but that is good. it is their job to worry, and they will help to keep us safe, and public health is key, and some of the scientist, and you will find a scientist on both sides. meg tirrell, thank you very much. and now, let's stay with the vaccine story, and new york mayor bill de blasio out with a new op-ed saying that every company currently involved with vaccine production needs to stand down with the patents in order to mass produce the

vaccines and the mayor joining with us that idea, and joining us now. thank you for joining us, mayor, on cnbc, and your idea is that if x-y-z pharma wants to make more of the moderna vaccine, they should do it so we can double, triple, quadruple production >> brian, exactly right. look at the problem that you talked about the new variants that could take our progress and reverse it if we don't act quickly. but we have got pharmaceutical companies here in america that could be producing the vaccine right now. the notion of standing by patents and, you know, the corporate differences or the rivalries or the other business as usual considerations when we are in a wartime crisis makes no sense. president biden is using defense production act is crucial, but i think that we need the federal government and the companies to get together, and we have identified 27 pharmaceutical companies and biotech companies

all of whom could contribute to a true universal vaccine production effort, and they could get ahead of the assault from the variants. >> and have you heard that anybody is going to do it? where do you stand right now on supplies for new york city >> no, i will tell you, brian, i am promoting this idea, because i want to see companies in life sciences companies in the pharmaceutical sector stepping forward to say, we are ready, and we will do this for our country to save lives and see the companies with the patents open up that situation, and the federal government coordinate, and that is what i am fighting for. in new york city, brian, we have a situation that can only i can tell you is backwards. we have the ability now to reach as many as half a million doses in one week, and that is what we can administer in new york city, but i have only a quarter of that supply from the manufacturers, and i have

variants bearing down on my city. so this is a classic example of let's get that federal leadership to sort of break through all of the normal lines and the normal roadblocks, because really, i will give you a great example from wartime. in world war ii, you had a case of lockheed getting support from boeing to create boeing-designed planes for the war effort, and they took the boeing patented design and lockheed produce and whitney pratt engines, and for that, ford took the whitney pratt design to put it on the production line, and we have to do it with the vaccines is right now in the country. >> do you have the number of people who actually deliver the jab, and not just random people injecting people, and it has to be trained professionals who are certified to do it do we have the people, and the locations, because that is the logistical bottleneck in louisiana, texas, and florida, and the logistics are part of

the problem. >> it is true, brian, and we are hiring 2,000 additional vax nays or the, but right now, we have a ready supply of folks who are trained the and able to do it. as you know, it is not that different of when you administer it, it is not that different from the flu shot, and we have the refrigeration issues to deal with, but the sites right now the city, and hundreds and hundreds of sites that we could open if we have the supply. this is the key for the whole city, and places like new york city could be doing half a million a week, but we can't get near the supply. so change the terms of engagement, and get the full might of the industries on one page to get the supply to jump forward. >> is this quickly, mr. mayor, one of the reasons that restaurants will start to reopen february 14th at 25% capacity indoor, and why not tomorrow why wait until february 14th >> you know, brian, i heard you say earlier schools, and i will make the parallel.

our schools are open in new york city, because we were able to take all of the precautions needed to keep them safe with the testing and the ppe and everything that we needed. the restaurants, it is going to take some work to get ready to really make sure they are going to be safe. the state of new york decided february 14th, and it is great that the restaurants will be coming back, but we need tight protocols and regular infections to make sure that people are safe. >> mayor bill de blasio of new york calling for more open production of the covid vaccine, and the faster we go, the faster the big apple can start to come back. thank you, mr. mayor. thank you for joining us. >> thank you, brian. >> all right. take care. all right. coming up, so what does stifles ceo think about this rebellion we will ask him. and now the hardest under the radar stock the find not named gamestop, and it is up this week, and it has nothing to do ams the internet foru.

were back in two minutes. urity? all our techs are pros. they know exactly which parking lots have the strongest signal. i just don't have the bandwidth for more business. seriously, i don't have the bandwidth. glitchy video calls with regional offices? yeah, that's my thing. with at&t business, you do the things you love. our people and network will help do the things you don't. let's take care of business. at&t.

it's a thirteen-hour flight, that's not a weekend trip. fifteen minutes until we board. oh yeah, we gotta take off. you downloaded the td ameritrade mobile app so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard before we board. excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position. you two are all set. have a great flight. thanks. we'll see ya. ah, they're getting so smart. choose the app that fits your investing style. ♪♪ all right. welcome back to "the exchange. the markets have come back a little bit and i won't sugar coat it, the markets are down big, 591 on the dow but they were down 747 points at one point, and by the way, all of the major averages are on pace for the largest weekly loss in three months and i have just learn and dare i say random and

interesting, this is going to be the first 2% down friday if we land under the 2% down since all of the way back in june. there you go. check the sectors and with a market like this all of the major 11 sectors are in the red, energy, materials and the original faang, and occidental and chevron and all of the laggards on the energy side, and utilities and health care are holding up the best, but they are down less than others with biogen and logic leading the way. you remember bitcoin it got all of the attention until this week. up double digits crossing 35,000, and maybe it is because elon musk added the hashtag bitcoin to his twitter bio. at this point, your guess is as good as mine. now, a news update outside of all of this and we welcome in

who else but sue herera. >> thank you, brian. this is what is happening at this hour. the fbi has raised the reward for $100,000 for information on who placed pipe bombs at the republican and the democratic national committee offices. the explosives were found just before the capitol hill riots, but the fbi says that the bombs were placed tonight before. a former fbi lawyer has been sente sentenced for the russia campaign. kevin kline smith plead guilty to altering an email used in the probe. prosecutors had sought prison time. and good news for one of the most endangered spee cies of th planet. researchers have pro dushgsced

two white rhinos, and they are hoping to produce more from a closely related species. >> we would like our kids and grandchildren to see them in person, and maybe not in person, but to have them around. thank you, sue. >> certainly. >> all right. time now for the friday find and not as rare as a white rrhino, but it is a name that has seen a rally without fanfare or maybe a lot of mentions on the red dit, a and that is canopy grow. it announced that it is partnering with martha stewart of all people, announcing a can

cannabis product line for pets it is just under $41. canopy growth, cgc, your friday five. and now, investment growth with a huge record-breaking quarter reporting for stiples stock, and the ceo is going on to join us with a beautiful view from wall street, and his ingh, sitsand exactly what is going on right now. stick around. this is what community looks like. ♪♪ caring for each other, ♪♪ protecting each other. ♪♪ and as the covid vaccine rolls out, we'll be ready to administer it. ♪♪

welcome back to "the exchange." and stiples financials is down perhaps today caught up in the rest of the market contagion, but it is a good run. they rup 56% in the last six months and joining with us a first of a cnbc interview is joining us is the ceo, and the investment revenues up 18%, and almost every division is posting better than expected results and everybody is loving the quarter, but the stock is down, ron, so are you caught up in the market contagion today? >> i think so. we had a great quarter, and

importantly, the outlook for 2021 is every bit as optimistic, and look, the markets are going to do what the markets are going to do. i am pleased with the results. you said it, 25 consecutive years of record revenue and not many investment banks can say that, and we had a great quarter records across the board. so, so great. and optimistic. >> talk to us, that you have a retail broker, and you talk to us about what you and your team is seeing, ron. is this sort of reddit rebellion or whatever you want to call it, because gamestop is getting the most attention, but it is small stocks with low float and short interest, and are you seeing the knock-on effects to other equities because of this >> you know, i think that, sure, there is a lot of interest by

investors and so-called retail investors, but, look, i think thats going on is what are we telling the clients. and there is a lot of as if this is a new phenomenon and short squeezes have been going on for over 100 years. it happened with railroads, and what i find that people are not talking about is that when this happens, the stock will go to a level and in this case, gamestop $300 or $400 and this is not sustainable, and that is the clearing mechanism for the shorts to get out. once that is done, the stock will reverse back to where it was. so, we are talk about how much the hedge funds are losing, and they are losing a lot. but there are a lot of ways that it will unwind and that is where i will be concerned that people do not understand the risk of playing in what is effectively a

cas casino. >> ron, how do you know that a financially distressed brick and mortar company that is widely hated by every analyst on the street is not worth $21 billion. >> okay. i will say that, you know, as warren buffett said at one time, the stock market is a voting game, and the votes will come in, and then it turns into a weigh machine, and unless they do something, that stock is not worth $21 billion. and i can say that confidently, and maybe they bought some huge, and maybe i could say oil reserve, because maybe it is not worth anything, but they are sitting on a gold mine and the value is there, but i don't believe that anybody believes that this company is worth 21 to $25 billion and so it is a phenomenon of a short squeeze, and people are coming into the

game that have no idea the risks they are taking, and it is going to be -- and that is nothing of what is going on in the options market. there is 9 million shares that settled today in the options market on calls that people have paid, and there is big premium being paid, and all i am saying to you, brian, is that when this, the book is written on this trade, it is not going to be just the shorts that got hammered, but a lt oflot of lons that are going to lose a lot of money. >> does it call into question the robinhood's business model >> no, i think that one of the things that i think that people should understand is that the same reason that the shorts have to cover their positions is because they have margin requirements. and so the old adage is that the market can be longer than you can be rational applies in this

case. robinhood in these cases that you are doing a lot of trades on the long side, the margin requirements are going up significantly, and because the market requires that we keep some stability. so they have got huge margin requirements to continue to trade. i do think that one of the things that will come out of this, and my friends will be mad is that payment for order flow is going to get focus here, and these trades are not free. and every one of the trades there is a transfer of value, and so that is going to be coming under the microscope. >> well, maybe it is, if something is free, you are the product. and so, we have to leave it there, and i have a text from one of the investors who said that investment banking rocked, a direct text. so ron, thank you for joining us. and stiple with a great quarter there. >> have a great day, okay. >> thank you, ron. the best to you and your team.

>> sure. >> and now, overall, a big sell-off on the markets, and on pace of one of the biggest days. and the dow is down and down big. we will be back after this. key portfolio events, all in one place. because when it's decision time, you need decision tech. only from fidelity.

all right. you have a dow that is off the lows, but not by much right now. we are headed right now for the worst friday since all of the way back in june. we have not been down a more than 2% friday since early june, and coming out of the pandemic haze from the market perspective and the dow down 629 and all dow stocks are lower and seeing a big drop in the s&p 500 as well. the volatility of the vix is up 15%, and the vix measures the option spreads in many ways and we are seeing the vix up 15%, and we are back right after this.

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get nationwide 5g included and save up to $300 a year on the network rated #1 in customer satisfaction. it's your wireless. your rules. only with xfinity mobile. the pandemic has driven somewhat of a municipal bond

boom it reached $250 billion last year, driving total muni debt below $4 trillion since 2013 does it make a risky environment for investors? joining us is chris johns. nice to talk about something other than gamestop for a bit. we have the possible of higher taxes coming muni should be attractive, but some people are afraid of the risks, because everything is down tax funds are down. >> well, i think one thing we have learned is that it's reinforced the notion that it's very important to know what you own. the pandemic has had a very wide variety of effects from state to stay, and from mu nil pal bond

sector to sector, so research is really important they days to handle that. one of the things that i think is important to know is they're a loot different from corporate, in the sense that the way they borrow money is different. they borrow money over a long period of time, say 20 to 30 years, with a level debt service schedule, because they have to balance that budget. so even though there has been a big supply, it's done fairly responsibly, especially when you include the fact that the in the last seven years, roughly somewhere between 20% and 50% of total issuance has been refinancing of higher interest rate debt, which you could argue is responsible behaviorally muni issuers, so it's important to understand those things. many times the issuers need voter approval, too.

the ten-year will give me 1%, what would be the median tax-free or almost tax-free return on sort of a, quote, average muni bond? >> right now, if you looked at, say, a ten-year aa-rated muni bond, the yield on a bond like that would be about 85 basis points as you would expect, slightly below the treasury security, but the tax bill equivalent is still an attractive rate so, you know, if you try to compare it to a taxable bond, the rates on tax exempts are still pretty attractive. in our world, it makes it even more so, because you get the advantage of exempt from both federal and state income tax though the number may seem small, the tax equivalent is

still quite attractive. >> chris, do you believe that the muni bond market could actually be the subject of a movement like what we are seeing in some of the they heavily shorted stocks, you know, going after a municipality which is not doing well >> with all this volatility in the stock market, to talk about an asset class, municipal bonds, which is relatively -- the short answer is not really you have to remember that municipal bonds are financed in many different ways. they're backed by the taxes authority of the issuer, and also backed by, say, residential property taxes, that's a relatively stable revenue stream so we won't see that kind of

volatility in that market. >> chris johns from aquila, we appreciate it. something different, new and fresh. thank you very much. have a great day >> have a good day. that does it for us. i will see you tonight for a special two-hour "fast money," 5:00 to 7:00, obviously a huge amount to talk about in the meantime "power lunch" picking up coverage with the market sell-off off this quick break. dow off 627. see you in three hours

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we've got a big market sell-off on wall street to end the week check out the major averages, all down a little more than 2% stocks on track for the worst week in three months all of the sectors are lower, both energy and technology leading th