just his name. so he can go, that's mobile, you can go anywhere with your gazillion follows, andrew. >> thanks, dom. >> you got it, guys. >> make sure you join us tomorrow, who knows what's going to happen. "squawk on the street" begins right now. good wednesday morning welcome to "squawk on the street," i'm carl quintanilla with david faber and mike, cramer is out today, futures close to the lows of the morning as the beyond yield back up continues in the wakeup of the blowout eco data, retail sales hottest since june, up 5.3 and wholesale 1.3, the road map begins with the power grid prices and the freezing weather leaves millions in texas and the midwest without power. >> let's talk about shares of qua quantumscape, shares are up and the ceo will join us in a few minutes. >> and finally, inside buffet's

portfolio, trimming his apple stake and new positions in chevron, and we will break that down this hour. >> we will get to the eco data in a moment but it ties into the ongoing crisis in texas. nearly 26 dead, a couple, maybe 3 million still out of power, and another possible second storm on the way mike, there's more discussion this morning, about not just the freeze in the midwest, and texas, and impacting economic activity, but couple that with the ongoing semi shortage and maybe the theory here is that despite the eco data that is good today, it gets more hiccupy in the coming months >> and a slowdown in vaccine administration so a lot of those things definitely create some friction in this whole story that we were on a clearer path to a fast acceleration in the spring it doesn't probably knock anything permanently offcourse but it changes a little bit of the pacing of things i think that is fair to say.

as well as adding a little bit of an accelerant to this move we've seen in oil price, now up above $60 in wti, so it does, you know, i think it creates a little bit of a complicating factor to a lot of what we're expecting, although mostly people are sticking with this idea, and pricing the markets, for the premise that we do get through it, and you know, it's going to be some, you know, massive asterisk, and a lot of pain, obviously, going on down there. david? >> yes, we'll watch. it and david, meanwhile, corporates continue to be pretty rock solid double b's below 3 and that brings net alliance, maybe that provides some signs of stabilization on the 10-year 1.36 we'll see. >> we hit 1.33 somewhere in there quite a move in yield in a very short amount of time and you're starting to hear that more often at least in the conversations that i'm having, the idea of, are yields done

moving lower in any way? are they going to continue to move higher? will we see the curve itself steepen to some extent either you've got, as you pointed out, carl, some fairly strong numbers in terms of parts of the economy right now, despite what's going on in texas and some of those other states you've also got the prospect of $1.9 trillion coming into this economy pretty soon. and the checks that go along with that. and you referenced goldman sachs' work in terms of how much of that will be saved and how much will be spent and how much already has been saved and how much will find its way potentially into places like robinhood accounts and the stock market but mike, i don't know if you hear more often, but i certainly do at least, the question of, could there one day actually be a return of inflation? are we already pouring fuel on a pretty hot fire to begin with? given people are getting back to sort of life, a lot of the

country already is, but that return to normalcy, the spending that will come along with that, and then $1.9 trillion on top of that and by the way, potentially an infrastructure bill, following on that. you know, the idea that there won't ever be inflation, i guess a lot of us, kind of these last 20 years, whatever it has been, we've grown up with that idea, but the yields are starting to show a little something different, not to mention of course that desire from anybody, anywhere, to buy anything that's got some sort of an interesting yield on it. >> yeah, there's no doubt. i think everybody expects, i mean just the math, was going to get you a little bit of a burst in inflation, at least on a reported basis, over the next few months, because we did, we're going to anniversary the crash, so everybody has been bracing for this, so the statistical cosmetic inflation, you know, outburst, so to speak, but people are going to say you have to look through it. it's really not going to be something that is a new trend, and the fed of course is trying toengineer inflation and has been trying to prepare investors for the idea that they are going to be tolerant of significantly

higher inflation for some time to come, to essentially counter-balance all this time we've spent under the target of 2% so that's been the playing field. i think right now, you have to wonder about, the retail sales number in january, everything is running a little bit better than expected on the consumer spending side, and then even on the inflation side, so far, and you look at the bond market, right now, all it's doing is kind of normalizing rates. >> but mike, what if you had a real curve what if you actually got back to one you and i -- >> we have a real curve. >> would he were a percent and a half on the 10-year a year ago and the fed funds rate was at a percent and a half, so it is starting to become -- what is interesting to me, if you look at things like the five-year, that was 35 basis points six weeks ago and now pushing 60 not a big move not high raise but it shows you that the market is unable to ignore the idea that the fed may have to respond. by the way, what did the retail sales number do to that $1.9 trillion everybody is expecting?

are people going to say, with the unemployment, does it need to move that fast? >> it doesn't seem to be stopping but my question to you is, all right, if we get back to rates that perhaps we are accustomed to but perhaps some other market players are not, what does that mean for growth stocks >> i'm looking at this goldman sachs on pallantir, upgraded to a buy, and growing at 30% plus and that deserves a 44 multiple on calendar year '21 sales but what happens in an environment where we get 2% on the 10-year, to grow stocks like that, or higher and a real curve? >> right, what's interesting about that is the pre-earnings, or i guess pallantir now pre-earnings, but if you're basing it on top line, i don't think it matters so much for that, i'm looking at apple, which has bond-like characteristics in terms of the cash flow stream, in terms of wait it distributes cash to shareholders, that's where the

big market cap weights are from growth stocks in the nasdaq and the s&p 500, and though me is much more sensitive to changes in yields and inflation expectations and that's probably where you get the valuation compression, carl >> that's interesting. apple trading exactly where it was on i think september 1st, hasn't done a whole lot, and speaking of big cap tech going sideways citi ups their target on amazon, not that it acts as a bond proxy the way apple does but their general point, mike, is that amazon shares tend to go flat for a while, and then surge, and as a result, they go to i think 3750 from 3600. >> that's the pattern. everyone has been kind of sitting vigil on this and wow, it is kind of going side-wise, wound pretty tight, it's probably going to run again and i think everyone's presumption is the run is higher as opposed to lower, but again, this is one of those companies, people value it on free cash flow yield and things like that, but to me, it is a little more of a top line, you know, if we're going to run

the economy hot, amazon is going to be there to catch, you know, a fair amount of it. so i think it's little bit of a different equation than those kind of pure long-term cash flow generating stories where it is really mostly about pricing those things against corporate bond yields, which are now, you know, at least modestly rising. >> and you know, you got to look every morning at what kathie wood bought, and they bought 1875 shares of amazon, so they got that going for them. and you know, we're going to talk about buffet, but i mean i guess this list is more important than what buffet's list looking like at ark investments. >> it has been self reinforcing, it has basically been the game on wall street for a while however conspicuously, lock how tesla trades and since the bitcoin announcement and since everyone has gotten more excited about a broader set of ev prospect, in terms of

manufacturers, who knows what else is going on in the psychology, or just we have to digest this move the stock was at 400 bucks before it was going in the s&p 500 in november i think. you know, it doesn't owe anybody anything at this point but you can't ignore the fact that it actually has an, it has been unable to sustain itself above that $800 billion market cap >> carl, elon musk number two, on that, richest man in the world thing that we follow, i guess, bezos is back in the number one position, speaking of amazon. >> yeah, and speaking of putting bitcoin on the balance sheet, this new gartner survey of cfos finds about 5% of cfos who were surveyed say they'll put bitcoin on the docket as a corporate asset. 84% say they don't plan to ever. but of course, those numbers are subject to change. david, you mentioned buffet. i think we should probably skip ahead to it. >> sure. >> a lot of discussion about what it means, trimming wells, trimming apple, but then this

verizon stake, there's a new proxy on the phone market, and really having no movement on the apple stake so far >> yeah, $8.6 billion worth of verizon. but to your point, mike made this point yesterday, i mean when you look at berkshire, $117 billion of apple stock i mean it dwarfs everything else in the portfolio and then some i think one of the key questions for berkshire, they haven't bought anything in the sense of a company, an operating company, the way we have become accustomed to them doing so and i'm not sure what that comes to the may environment or at least the view buffet has it, and they have been buying back their stock as you know and they did take this position in chevron about, $4 billion. there had been some thought, maybe it would have been exxon, which by the way, over the last few months, has performed a lot better than chevron and is now once again ahead of it in terms of market cap, we know that exxon has been deals with issues of its own, in terms of some

activist investors, and potential addition to the board, they already made one change, and some commitments they have made as well to moving towards, you know, not carbon neutrality necessarily, but a number of different things, and more specifically, as well, towards spending less, when it comes to cap ex, or just operational expenses, but there's a look, well, there's a look at some of the other names and wells fargo, mike had, been one of the biggest, at berkshire for some time but that is certainly no longer the case. pointing out when it comes to energy, i will go back to that occidental deal. april of 2019, april 30th, when he bought 10 billion worth of, it was a convert, he's never going to see the convert price but he got 8% dividend the convert by the way was 62.50 a share on occidental. >> yeah, i mean it's interesting, because chevron and verizon, you could argue, are back to a more core contrarian

value type orientation, but also, very much risk averse choice, right? if you look at position, as blended, it's got a 5% blended dividend yield, in terms of the amounts he bought, so he's getting $600 million, a year, at the current dividend rates, to own these things, and that sort of buffers your down side and also look at verizon, it sort of fits in with the kind of infrastructure/utility thing that he's got railroads and he's got utilities and energy and pipeline, so it just seems as if broad proxy on massive parts of the economy seems like it fits, and so it's not necessarily something where he says there's a new story here, and obviously, 5g, verizon but not a real high concept thesis and it is much more the market is giving me the opportunity to own these things, i can nurse the yield for what i . 's worth >> right >> we got industrial production coming up in a moment and the ceo of quantumscape as "squawk on the street" continues don't go anywhere.

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the street." more live breaking news, and of course, we're expecting our january read on capacity utilization and capacity production, and hitting the records, for january, industrial production, over double the expected of 0.4, and follows up

to this at this point and unrevised 1.6, so you can see we're definitely not moving dramatically higher in this series, and if we consider that the high water mark is the all-time high, that was in june at 6.24, we have been mostly deteriorating but we are coming back a little bit when you consider we did have a negative number in september. on utilization rates, 75.6 now, this is definitely a beat no matter how you slice it consider that we were in the 76 range in january and february, before covid, so this number really pops us out, and it follows 74.5, and it is the best level since february so we're making some progress. back to you, david >> okay, thank you, rick. shares of quantumscape there up in the premarket despite posting a loss in the first response going public. phil lebeau has more. >> let's bring in jagdeep singh, the ceo of quantumscape, jagdeep, thanks for joining us this morning you reported a loss yesterday

but that is not really what the market is focused on they're focused on the two important developments that you announced yesterday, including the development of prototypes for multi-layer solid-state battery cells. put this into perspective for investors, how important it is that this development goes forward, with these multi-layer cells. >> good morning, phil. that's a good question so first of all, i want to say there is a lot more work to be done, but having said that, this is an incredibly important announcement, so in december, we announced results from our single layer cells, so the single layer cells of course have all of chemistry that goes into the batteries, from the anode and the solid state separator and the results you might recall were pretty remarkable, and they have never before been seen at that level of cycle life, of car density or power, of charge, you know, the temperature, and so on and then the question became, can we keep those single layer cells and put them in multi-layer stacks in order to build the kind of cells that we will need to slip to our

automotive ev companies. and yesterday's announcement addresses specifically that we can in fact take these single layer cells and stack them up, so we showed data from four layer cells, and the exciting part of it is that the data with the four layer cells was essentially the same as the data from the single layer cells in terms of capacity retention, cycle life and so on, and we ensure the cycles at 1 c and c 03 rates, and in the three-hour charges, at 30 degrees celsius, so that was confirmation in fact we can take those single layer cell, stack them up and do exactly what we were hoping to do over time this year and end up stacks more and more layers and probably eight to 10 layers by year end and that's why it is such a big announcement for us >> the other announcement is you guys are working on building a pre-pilot line in san jose, essentially where you're going to be starting to build out these battery cells. this is not a final production

facility, but this along with the fact that you're expecting to have at least $900 million in liquidity, at the end of this year, does that get you through to the beginning of production >> absolutely. so we've said before that the cash balance we have, so we ended last year with almost, actually about a billion in the bank and this year, $900 million in the bank, so the liquidity position is very strong. this facility we're going to, to zero, which is sort of a pre-pilot production line, it is really important, it is also related to the multi-layer, and that's what we talked about yesterday, and the fact that we're seeing this kind of progress is what gives us confidence to go ahead and build this pre-pilot line. we will have cells rolling off this line in 2032 whichmeans w will be able -- 2023, which means we will be able to sell those cells to ohms to put in test vehicles and that is a pretty big milestone, a pretty big target as well and to answer your question, absolutely, the currents cash balance we have in the bank as we end the year will

in fact, be sufficient to get us in post-production and not just the pre-pilot line but with the production, with the volume. >> and are you giving yourself enough time here you just laid out some of your goals in terms of the prototype battery cells to your customers in 2022, layer by layer, by layer, at four and want to go eight to ten, you know, science is science sometimes there are setbacks if there are, are you still giving yourself enough time to meet your goals? >> yeah, david, so that's a good question, so one of the things that i think, one of the reasons why we went public last year is precisely because we got most of the science, most of the chemistry is behind us, and by showing single layer cells, which basically encapsulate all of the chemistry, we feel like the chemistry is in fact nudging behind us and the combination stacking the four-layer cells up there is no new chemistry involveed so they work and you're absolutely right, we continue to stack more and more layers up and ramp up

production, those are things that we feel are execution-related tachkss and we are looking at the risks of the taupe of the tasks ahead, there is a lot of work to be done here but i think at the end of the day we feel we have a schedule that is in fact achievable, and we've got the cash balance, we've got the valuation, the customer support that we need to pull it off. and we're going to do our best to make it happen. you're absolutely right, nobody has a crystal ball, we can't guarantee that everything is going to be flawless, but i think that the team has enough sort of a track record to give us confidence that the goals that we have are in fact achievable. >> phil here once agadge final question for you you mentioned on the conference call with analysts last night that you have been in touch with the ev tall manufacturer, these companies with the vertical takeoff and landing urban aircraft that are going to be developed theoretically over the next ten years realistically how quickly do you see that market taking off >> it's a good question. i mean i think the question had

to do, is that an important market for these kinds of batteries. and the answer i gave was yeah, you know, that market is very sensitive to energy density and you want as much energy density, light, battery as you can and you're absolutely right and one of the answers yes, this is like building hope upon hope, so what we're doing, we're not distracting ourselves from the primary market, which is the ev market that is clearly massive and real and here today and we have one of the world's largest car companies committed to this technology so the last thing we want to do is go away from that but the main point i was making yesterday is that there are clearly other markets that also need the same benefits that will apply to these batteries, so you know, more energy density, more energy per unit weight, and you know, faster charge times, you know, better life performance, increased safety and so on so beyond this ev space, over time, we fully expect to address

the stationary stores for the grid market, consumer electronics and ev talls >> jagdeep singh, ceo of quantumscape, joining us exclusively this morning on "squawk on the street. thank you for joining us >> thanks, phil. >> an interesting thing, quantumscape is up here but let's be clear as david pointed out, it's a long ways before these guys come to market and begin production on these solid state battery cells. >> phil, thanks. great stuff. with quantumscape. we have oil back below 60. ten year back below 130. and futures still in the red back in a moment

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still some earnings movers at the tail end of earnings season shopify one of them. 128 beats 121. revenue up 94 but the market had some high expectations stk down almost 6% and the company will be on closing bell later on this afternoon an opening bell in four minutes. don't go anywhere.

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we talked about sort of the bullish arguments that continue to support stocks, mike, one of them we didn't really mention in the a block is the ongoing improvement in vaccine supply and distribution the president did talk about it last night and even though fauci yesterday had to push back a bit, this period which he wauns called open season to walk in and get a vaccine at will, he was thinking april, and now thinking may and the president made it clear, everyone who needs one will looks like probably will have in the month of august, he said. >> so it is roughly speaking, within a six-month window that, you know, the market maybe tries

to base its current positioning on it does make sense i mean i think even if it's not, you know, substantially more penetrated before then, it might come as a sprite disappointment, but it also doesn't seem to matter that much people are spending as it is right now, as they have, money on hand. carl >> man, looking at the retail sales, some of the internals, it is absolutely right, mike. the opening bell a look at the s&p 500, and the nnasdaq as well speaking to mike's point, you look at some of the sectors that have been, that did so well in the month, furniture, up 12, electronics, up almost 15, and e-commerce, nonstore, up 11, and capital economics says it's a sign that the 900 billion in stimulus we got is working as at least the policy makers wanted >> i think we will spend a good deal of time contemplating what the effect of potentially $1.9 trillion coming into this

economy will mean. and particularly checks going obviously to any number of people many of whom need it you know, you don't want to say that that's not the case but mike, there is also this narrative, larry summers, for example, former treasury secretary, has been talking it up and many people have been rebutting him, but saying this is going to potentially overheat the economy. >> right and this debate, i mean, should it be more targeted, should you means test it a little bit more, i mean a lot of the proposed fiscal support is, you know, extended, enhanced unemployment benefits which of course as the economy gets better and people get job, it goes down, so this is a place holder number that we're working with 1.9 trillion, i think this is going to be a debate, because what you're seeing right now is the markets are implying, and the data is showing that we're pulling forward that moment where, you know, the economists, strategist, policy makers, have to ask, you know, is the economy farther along than we thought it was going to be, what does that mean for the needed policy mix so the fed minutes today, we

pretty much know what they were about, in the last meeting, in terms of the conversation, and their emphasis has been on reiterating and trying to accentuate their stance which is we're not doing anything until this lasts for a long time, until the labor market is very tight and we think the labor market will get tighter than it was at the peak without causing more inflation so you wonder if the market has to essentially call the fed on that, on that notion, before we, you know, get to that point and i would say quickly, right now, it looks like a lot of stuff is dealing with overbought condition, the s&p 500 a little bit, yields have actually backed up on this really good hot retail sales number, so maybe just, you know, we have already kind of extended these trends to a certain degree, to this point, carl and maybe not a lot of juice in the moment left for it >> all sectors are red for the morning, at least at the opening, utilities and energy eeking out a small gain. and we do have oil, it did get close to 61 but it hasn't been above 60 since january 7th now

so you're going back pre-onset of covid, to get oil numbers like this and of course, everybody talks about the ridiculous range that crude has been in, if you talk, if you go into that negative period, it's about $100 range in the past year. >> yes, and it's actually, it's really operated in a way, you've never thought it could, before, but i do think if you would want to pull back a little bit, on a longer time frame, in the last several year, crude has not spent much time at all above 60. it has been there, it has been hanging around there at times and it has gone higher for brief periods of time, but it's not really been much higher, you know, i don't think we're talking about it really pinching consumption, you know, of course, a nominal dollar amount, the economy gets bigger all the time and all the rest of it and we're more energy efficient in every way, but both with yields, and with oil prices, you know, at least the conversation is started as, it's going up for the right reasons, we can agree about that for the most part, when does it become a little bit more of a challenge for

equities, and i guess for the economy. >> yes, but also, the question has been, is energy investable jim cramer has made the point many times that it's uninvestable and not that you will see significant moves higher but a longer period of time but the mandates among asset allocators can they really allocate funds to this sector, it didn't stop warren buffett from buying $4 billion worth of chevron and the stock it up almost 2% and exxon has benefitted and it has a great move, the question is, are we sort of towards the tail end of it and obviously you mentioned the underlying commodity as well there have been a number of other things as a result with ex con and why it outperformed chevron so significantly, over the last few months. or at least this year. but i guess that question is still out there in terms of the long term. >> it absolutely is. you also have to again, you need the longer term charts, to have this incredible run back up into the 50s, exxon, but you know, crashing below 50 was a big

deal, when it got down there in the early part of last year. so this was a stock that, you know, i'm looking back, five years ago, was 95. >> yes. >> so we're just kind of bouncing off of these really extreme over-sold levels where people just kind of abandon the whole sector, and so we are talking about getting back to what we used to think of as normal level, carl. >> meanwhile, david, tomorrow, gamestop hearing, in the house, we have the list of people who will give testimony, griffin, huffman from reddit, vlat tenev from robinhood and keith gill, who isn't credited as being roaring kitty on the list of names but in fact is roaring kitty. >> the guy up in boston or somewhere in that area, right? >> yes. >> looking forward to seeing roaring kitty. >> and any word whether it will be plotken from melvin or he's not coming he's not on the list

>> i'll go back and look i don't have it open at the moment but the market will be braced to see if we learn anything. >> the questioning should be interesting. it is always interesting to see what level of knowledge our elected represent tifics, representatives actually have about these markets, sometimes i think we shud wer fear with how little knowledge they have but these hearings are to help educate, educate closely and i will be watching closely. >> i did want to come back to cciv, the symbol for church hill capital 5 of course, take a look, this is reflective, we talk about gamestop a lot, but take a look, go back on ccib a little bit as well, you may recall, guys, a couple of months ago, when i had the audacity to suggest, hey, sometimes you don't get to the finish line on a deal, this has been of course the speculation since bloomberg first reported they were in talks to merge with lucid, so

merge into the spac, to go public, and since then, we've talked to the largest shareholder, who runs the pif of saudi arabia and we talked to rollinson the ceo of lucid and one person we haven't talked to is michael kline of course, the man who runs church hill and he hasn't returned my calls or text, that's okay, and yesterday, reuter , reuters did report, get ready to be wall-crossed and what that means those investors who are considering the pipe, the private investment, the public equity, that goes along so often with when these deals are announced, they should get ready to cross the wall and start getting material public information, information they can't share, although it almost gets leaked right away and be curious to see what this looks like and where do they value lucid and some say maybe as low as, well, maybe $12 billion, and original reports in bloomberg

had it at 15 i just don't flow. and these pipes, you come in at ten, and the spac is trading at 54 so michael kline is right now in a position to potentially deliver enormous paper profits, to those investors who are willing to come in the pipe. percentages, we don't know what they are going to buy. we don't know a lot here projections. but there's a lockup after the deal is announced. after the deal closes, i should say. and nonetheless, he's in a position to deliver a lot of potential money to these pipe investors, given this incredible move up in churchill, on the pros spect of it eventually merging with lucid. >> it is really amazing, and it really shows you the kind of separate constituencies for spacs right now where it had always been this kinds of, you know, this professional game, it was sort of an arbitrage, you were sort of protected, you know, there was a fairly structured trade in there, that people thought was very good risk/reward, and then all of a sudden, you know, you have the public kind of coming in, and just getting excited about this

concept of what they might buy and it turns it into a little bit upside down so it is amazing. this market is in a hurry to put big valuations and throw capital on whatever, you know, kind of sexy notion comes across the screen on the exchange. >> carl, and those spacs that actually announced deals with companies that are not profitable, are going to have a prospect of it, for a number of years, that seem to actually get a lot more money behind them, as opposed to those that already have a revenue stream and a potential for, if not profits, nearer term, where you can actually apply a multiple that you might sort of find more appropriate. >> yeah, i think a great exercise would be to go through all of the power points, the pitches, of one of these spac deals, the target companies, and just aggregate the 2024 and 2025 revenue and the growth rates and everything, and i mean what's being promised three and four and five years out is amazing.

>> amazing. >> and they can say anything they want. >> last week, flying car, archer, i call it flying cars, it's not but fun to say. 2026 numbers that was the multiple they were using. 2026 okay maybe it will happen ken, who is buying the spac, came on and explained why strategically it makes a lot of sense and perhaps it does but to your point, you have a number of years here to sort of dream, carl and there's a lot of dreaming going on. >> what was the line from peter teal we were promised flying cars and instead we got 240 characters? was that the line? >> one day we're going to get those darn flying cars which is excited phil mentioned it as well to jagdeep there, but it's going to be a while. one area that our producer robert points out, not benefitting from a lot of the optimism about the economy reopening is travel, and hilton, results came in, ten cent loss and looking for a 4 cent gain and the results of the quarter

were largely in line, but tightening travel restrictions disrupted the positive momentum that we saw in the summer and the fall and mike, it kind of echos what expedia had said, again, these are global travel trends that they are trying to game out, but that interruption in the fall and winter is sort of echoing now, as the quarter gets printed. >> without a doubt and it's striking these companies that, who look at that chart, the stocks are back to where they were, when we were unrestricted travel and where people weren't giving it a second thought, so really, the market has completely rushed to a place where it's assuming that we are pretty much on the track to the back to normal, and i mean i think a lot of the, expedia is like that, and i was looking at norwegian cruise lines, yesterday, and the enterprise value is back to where it was before, because of all of the stock, and even though it looks like the stock is down a lot and i think that's one of the issues here, you have to focus on your progress, along the way to the point to getting back to normal, when you've already had the market give them a lot of credit for being pretty far along

>> guy, real quick, not much in deal land this morning, a couple of things, nestle did sell parts of its water business, it's a private equity deal but it's not insignificant, $4.3 billion, they didn't sell perrier, but they sold poland spring, a lot of people know that name, and a number of other significant brands, ozarka, as march matter continues to make charges there at nestle in terms of the overall portfolio and finally, in a second request for the salesforce slack deal. one of the larger deals of last year and an important one for salesforce, and we don't really have yet a sense for how the justice department is going to view technology deals, under the biden administration the man who runs that part of the d.o.j. is no longer there, not sure if this point, we're not sure if we know at this point who is replacing but slack

shares are down as you can see, and the spread opening up a bit and it may have the effect of delaying although you never know and they're still sticking with the same sort of closing on the calendar, but carl, it does sort of raise this question, as to how are technology deals going to be viewed in the larger context of this new administration and at least raising some concerns perhaps that at the very least they're going to, many of them will get second requests for more information. >> yes, getting a second look from regulators, and rivals getting a little more spicy in their criticism of some m&a as well, as we talked a bit about on "squawk alley," and taking a break here, taking a look at the bond market, one of the major stories to watch in addition to equity, treasuries, rick mentioned on the rise, with the analyst pointing out, worries about inflation, ten year yield does touch the highest in nearly a year, consumer sentiment at the top of the hour. over in europe, down across the board and the dollar index, as people keep an eye on the pros spect of inflation, higher

rates, near some five-month highs. back in a moment

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millions in texas face continued power outages for a third straight day and now regulators are launching third-straight day now regulators are joining an investigation into the 2021 grid operations joining us to discuss federal regulatory commissioner, thank you for your time, we appreciate it >> thanks for having me. >> you made the comment on twitter the power is in helping those who are affected and, of course, our thoughts are going out to them and have been all week long. at this point is there a working theory as to what the main culprit of this problem has been >> yeah. i just want to start by echoing that point that people are suffering. people have lost their lives i really want to commend our front-line energy workers who in the midst of a pandemic, are out there trying to restore power as

quickly as possible. safety remains paramount that's where our thoughts and concerns are in terms of what caused this and what to do about it, it's too early to tell. we need to do a really careful, thoughtful analysis to identify what has gone wrong here i think people are so quick to view things through partisan lenses whether it be political or for their preferred fuel source. they want to point firngs and they, well, this occurred because renewables didn't show up or this occurred because there was a failure in gas delivery. it looks to be a combination of an extreme weather events, coupled with a dramatic spike in demand for electricity that led to failures across fuel sources and we just have to be very careful and deliberate as we identify what went wrong, to make sure we're not facing situation like this, we're at

least better prepared in the future >> right are you absolutely right about it becoming a prism, a political prism, a political football, in many cases but when you look at what contributes to generation, at least for the past couple of weeks, let's just say, the percentage of it comes from wind and solar looks negligible how would you build a case that says that element of energy was to blame >> so again, there were instances, clearly, where i think about half of the affected capacity of wind went down we saw this with gas, nuclear and coal as well we just got to examine it. the generation mix in texas has changed substantially over the last decade. i think texas's use of coal, for instance, is down dramatically over the last decade would those retired coal plants have been able to step up and provide necessary supply in this situation? we need to examine that, but i

think it's clear that no one fuel source was to be blamed for this event certainly not for renewables not gas, not coal, not nuclear this was across the board price. >> commissioner, texas is somewhat unique, though, isn't it it's not connected to the grid it's deregulated it's energy generation, business overall, does that have anything to do with what may be going on? >> look, as they like to say down there, everything is bigger and better in texas. texas has unique attributes in that it's big enough it's got the people and the demand for electricity and it's the biggest energy producer in the country and it's got the supply to meet that demand certainly, looking at energy infrastructure, transmission are all things that we need to examine. that this commission will play a key role in. but as with looking at fuel

sources, examining the texas grid, i know the governor has called for examination here. those are things that we need to do but not jump to any conclusions at this early stage, the aftermath are still ongoing events >> so what will you be looking most closely at or those who will come to conclusions looks most closely at when we can sufficiently look at what happened here to understand it >> so at the federal regulatory commission, my colleagues and i are foremost responsibility, reliability. it's looking at situations like this to ensure when americans hit the switch, the lights come on, the heat comes on. in the summer, the air comes on. reliability is boring. it's complicated it's difficult to tweet about. but at the end of the day, it is our foremost responsibility and i am confident that if we take the politics out of it and let the engineers and economists and the experts examine what went on

here, we will figure out ways to continue the energy transition that's taking place in texas and around the country while maintaining the reliable affordable grid that really sets texas and the united states of america apart from the rest of the world. >> finally, i wonder, is just a part of the investigation of the probe, do you expect it to look into whether or not there needs to be more cooperation with neighboring grids, either on the western or the eastern side in texas? >> again, that is a complex dynamic that raises a lot of technical and jurisdictional questions. so i don't want to get ahead of the colleagues of congress, of the texas legislature. that's a really loaded subject that calls for calm, deliberative examination >> commissioner, you said it, reliability is born until it

isn't and currently it's not boring at all. we really appreciate your guidance and we welcome you to come back. thank you very much. >> thanks for having me. by the way, we are going to talk more about this with goldman's jeff curry in the next hour, as obviously commodities are one of the huge stories of the week and obviously t yheear so far the dow is recovering early loss, down 7 points, don't go away good morning! this is where everything started. the four way is engulfed in history.

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good wednesday morning, welcome to another hour on "squawk on the street" the markets are trying to find its way back in the green after futures went south on actually hot ecodata which then put the move on yields, one of the big stories today along with the energy complex, david, and the 13-f filings as verizon and chevron lead the dow >> yeah. those are both warren buffet purchases, verizon is up nicely as it's not been a great performer this year. although, morgan, i'm keeping an eye on the 10-year yield >> me too. >> oh, really, i didn't know that, look at that synergy 1, 3, 3, as high as, it's very

interesting to watch you are starting to hear concern now at 1289, about inflation, what is the 1.2 trillion will mean if we get the full bill the president is certainly behind. given the economy seems to be running fairly well in certain pockets, at least. >> it does seem like the data we have been getting, companies that put out recent earnings is the most recent tranche of stimulus has already been making its way out into the economy the ppi numbers, excuse me, the largest one-month gain that go back to 2009 obviously, you saw that much stronger than expected retail sales numbers. will we get the fed minutes? i think there is a strong expectation that will be very d dovish and you hold steady there. we have seen i realize we are with lows with interest rates we have seen the velocity.

the quickness with which we've seen that increase in race again in the last couple days, speaking to bond vigilantes and what that could look like in the coming months as we do have the economy getting back on track here of course, what that ultimately means for monetary policy and just note, this is a part of the bitcoin story, too, right, that easy money policy, expectations around inflation, dollar deappreciation, that is a part of the reason you continue to see bitcoin trade at these record highs, too, carl. >> yeah. and there is nomore data on the way. let's get to santelli. >> our business news is expected up half of 1%. it came up stronger than expected up .6. this was the best read and that was in september we are getting the home builders market index for february, which made an all-time high of 90 in november diana olig, how does the number

look this month? >> reporter: well, rick, it's down from there. builder sentiment did rise to 184. anything above 50 is considered positive sentiment it was at 74 a year ago. this despite lumber prices hitting a record high during the month, which caused some builders to halt projects, the three components, current sales conditions, steady at 90 traffic of suspected buyers up 4.72. seams expectations in the next six months fell 3 points to 80 regionally, builder sentiment in the northeast at 78, up two points, in the south it dropped two points to 84 in the west it decreased two points to 83 a lot of numbers on cnbc.com >> let's turn now to the markets and bring to the president and ceo of cam investors we talked about certain speculative parts of this market i reminisce a bit about the mid-

to late-'90s it was a fun time. i am curious how you see it and whether it is a risk >> it's a very, very speculative market right now and it may be that description needs a few more varies. it's most speculative i have seen since late 1999, early 2000 and, you know, if you remember back to that point in time, it wasn't like the market softly rolled over and you could kind of start to think about some of your more aggressive positions it just topped out one day i think that probably was going to happen here >> so how do you position for that and what do you -- again, to your point, i remember that period as well, there isn't one thing i can point to oh, that was it. it's any number of different things you can look at in hindsight. what are you focused on and how are you constructing your portfolio to make sure you are not hurt, if, in fact, are you correct? >> we are a relative value

manager. so we're very unlikely to find ourselves in the speculative swimming pool under any set of circumstance you know, right now, if you look at what's working in the market, it's almost like a smile with really speculative stuff and what you call the hope trades, the super deep value, very ultracontrarian type of stocks, like department stores and things those have been doing well, we're not really in either of those places, we are more in the middle of the fairway, so we have quality businesses that can grow predictably, generate good cash flow. you don't need to use your imagination with respect to accounting that tends to be awarded, just not really, you know, the flavor of the month right now >> what's the bond market telling us and how closely, how seriously you are watching this move in say the ten-year yields right now, are you in this camp that is debating the possibility of inflation what that could potentially mean even before the year is out for fed policy >> there is a complicated answer to that question that can take

forever to explain it definitely matters, and you know if you look at what happened in the year 2000, you know, the ted tightened up liquidity after y2k event. that ultimately took the speculative market down. so why2k is not every day going to repeat itself again what we do have is a reopening of the economy that contingent on a vaccine we saw yesterday the administration raised guidance for 13.5 million vaccines a week that sounds like 50 million a month. we will get j&j probably the beginning of march that will probably take the numbers closer to 80 million a month. yet, there is only 270 million american adults, sow know, if you kind of add that altogether, that sounds like you can get pretty close to everybody vaccinated by early to mid-may at that point, you know, things will start looking a lot different. we have so much pentup demand,

pentup supply, liquidity, with things to do that seems like it can create inflation i think that's what the bond stockmarket snipping at. >> i tell you, you see everybody who wants a vaccine getting one by may, i think we are in pretty good shape, especially since the government projections are pushing that into the summer right now and tend to be a lot more conservative. but, brian, given this conversation, then where do you put your money i see you got some stocks, specific stocks that you like at these levels right now >> yeah, sure. so we like a number of names you know, a couple stocks that i'd focus on right now are arms dealer type of names so one is pfizer, so pfizer is an integrated payments and financial software technology and heart processing business. they basell products to any nume of banks and card issuers and merchant acquire es. they par tis pace in a lot of

brand trends a lot of arms dealers is raytheon technology and united tech raytheon is missiles and radars. that's very cyclical right now but the old technology is. that's near monopoly businesses with a number of commercial franchise businesses that will benefit from reopening, not maybe immediately. we see the commercial aircraft business as swinging from oversupply to the very under supply by the time you get into 2022 >> and finally, you know, it's funny, we had micro man on yesterday, ceo of 3m talking about their efforts to become carbon neutral over the next 29 years. i notice as well, it's a fairly significant holding for you. sit still? and why? >> we still like it. it's been one of the slower-burn industrials in the current market 3m is almost like a staples company that happens to be the

industrial space, but it also fits that arms dealer description. they sell a lot of precision and chemicals to a variety of industries we're going to have a massive industrial resurge it's pretty much across the board. there is so many supply chains that are, for the lack of a better term, all fouled up right now. they should benefit pretty nicely from that >> brian thank you. i appreciate your time >> thank you in the meantime, we are a bit away from those congressional hearings about gamestop and robinhood our kate rooney has a preview of what tomorrow may bring. good morning, kate. >> reporter: good morning, charm. the house financial services hearing is really the first time some of these major players will have to publicly address the gamestop controversy the first big topic here those halts around reddit stock in late jaern january and the new phenomenon of the stockmarket and social media

colliding. we expect to hear conflicts of interests with hedge funds and market makers. as far as the cast of characters testifying, robinhood and ken griffin of citadel and melvin capital and reddit ceo we also expect to hear from keith gil, the only non-ceo on the list he goes by roaring kitty online. he promoted gamestop stock through youtube videos robinhood's 33-year-old ceo has by far come under scrutiny this that group he's seen as another big test for his company as they head towards an ipo among those advising him ahead of this hearing, here is dan gallagher, who joined robinhood about a year ago two of the top communications team members learn from one of the regulators, one was also on president obama's treasury communications team. robinhood reportedly hired reginald brown he is a veteran congressional

lawyer also, i have been talking to this morning and over the weekend, really expect law makers to grill these witness, especially the ceos, similar to what we have seen in the past with the big tech hearings they expect payment for order flow and robinhood's revenue model. not a lot of real market structure discussion morgan, back to you. >> actually, kate, one question for me, just in terms of our audience, you went through the cast list. is there any doubt that that is the one people will want to hear from the most? would you argue there is equal interest in what griffin and huff has to say? >> reporter: i think some of the explanation, you had elizabeth warren come out today and say it's not clear what robinhood's relationship is with market makers even the distinction between citadel, the hedge fund and citadel securities, which works with robinhood, i think it will be a huge interest and

explanation there. of course, melvin capitol. i think the requirement here is a lot of explaining by those ceos to say, here is the situation. here is the setup in our revenue model. there is a lot of interest in citadel. of course, robinhood so far has gotten the most heat from lawmakers. >> i'm curious to see what keith gil, aka roaring kitty deep value has to say given the fact that this became such a tidal wave of people getting involved and participating on reddit. and i realize he has been very prominent. but i wonder how that is going to be and navigated in terms of the questions asked. this was in many ways a kind of a crowd source endeavor. >> reporter: he is south of emblem aatic crowd we see people bidding up the social stock on social media so he may be an example of one

person but as you said, there are thousands of people like him and if not like him, following him in some of these stocks. i think he will be sort of the poster child of what they see on reddit and they see as a new landscape for the stockmarket. >> it's going to be a big event. we look forward to that tomorrow, kate with your helpful watch. kate rooney on tomorrow's hearing on the house side. when we come back, invitation homes, the largest single family rental homes in the united states reports results. we got the ceo as we get pronounced weakness in the nasdaq down 100. back in a minute

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the rebuilding of detroit is one of the greatest real estate stories of a decade. while we focus on big names involved there is another group of developers battling bigotry to make their mark. >> reporter: roderick hardeman spent two decades on wall street, but he came home to the streets of detroit, which he calls his best investment yet. >> making sure the economic growth that happens here is inclusive and impactful for all detroit residents. >> reporter: he is one of several small black developers going neighborhood to neighborhood, property to property, building back the beleaguered city and raising up his residents. >> it's 100 feet deep. >> reporter: this will be a mixed use development with retail space and affordable housing. >> it's actually one of the first new construction projects

for grand river, which is one of our main corridors in over 30 years. >> reporter: his partner is local gallery owner gorge n' namdi. >> it's important to have small developers doing things in the community. because most of the time the community, they have lived in these communities. they know these communities. >> reporter: but for these partners and others like them, finding the capital is not easy. >> and so the capital is a huge problem that emerging developers, african-americans, women, minorities across the board, people across the board are facing struggle with it does make the products much more challenging we have to be ten times more creative to fill capital gaps. >> reporter: that means leaning on partners in the philanthropic and social space, like capitalism pact, invest detroit, the city of detroit and local initiative support corps not the big banks. >> i think the moment of black

developers in detroit is very unique we recognize the potential of going into areas that people don't quite see the vision yet that's one of the biggest stringths we v. we're not an anomaly, we're not an aberration we are successful thought individuals. you have to be patient and foolish enough never to quit and stay hopeful that you can push through. >> reporter: hardeman says he hopes by showing both creativity and the projects make sense, he'll attract more investors and capital to minority developers, not just in detroit but all over the country. back to you, guys. >> that's such a good story. that question of lack of access to capital and the reliance of philanthropy, j.p. morgan made a public commitment. how much of that commitment is a factor in getting that capital >> reporter: you know, it's so interesting. because we've seen the big banks really focus on minority

homeowners they're helping them get access to mortgages, with downpayments. but we haven't seen it in that commercial development space as much that's where, you know, roderick hardeman and his colleagues are working. he says they need to get more affordable housing, that's often rental housing while the banks are focusing on ownership, they're not quite there on these developers. >> diana, i wonder how closely developers and city officials in other parts of the country and cities that have been, perhaps, beleaguered and downtrodden over the years, how closely they're watching what they are throwing out in detroit as one that can be applicable elsewhere. >> reporter: very closely, i imagine. that's one thing that roderick pointed out. he says you have to be very close with the local officials, the city, the state. they're the ones that do having a says to all kind of funds. as long as they see the progress that's happening in their own city from people who live in their own city that will make the project a lot

easier than going to the big banks. >> diana olick, with another great report thank you. invitation homes, meantime, one of the home leasing companies reportedly had inline street expectations yesterday you see that stock is down ever so slightly. joining us now is invitation homes, ceo, thank you for being back with us >> thanks, morgan. good to see you. >> so i want to get your thoughts on what you have seen in not only the fourth quarter but in 2020. obviously, we've seen forbearance programs that have been extended with all of the stimulus packages that have been rolling out. in general, just looking at your properties around the country and i go es the demographics of folks that are renting what are you seeing in terms of payment? >> well, it's been interesting i think we've had month over month acceleration really since the beginning of 2020. we finished the year far north of eight% from on occupancy perspective. while we have this tremendous amount of demand, we have

certainly been having to meet the needs and work with residents impacted by covid-19 so that's been a real balancing act. i think fortunately for us, while the demand has been there, you know, working with the different municipalities, trying to make sure our residents, most importantly, are looked after in a proper way we probably worked narrow with over a couple thousand families in restructuring, forgiving past-due rents and things like that we're fortunate, given the sides of our business that we can weather that i do have some concerns about smaller landlords out there kind of stuck in the middle they're having to kind of strike that balance so i think it's important that the administration continues to work with housing experts to find and strike that right balance between helping with additional stimulus for renters facing hardship, also making sure that landlords have the protections they need. again, they paid property taxes and insurance and things like that so finding that balance has been tricky. but demand is really, really strong >> we're coming to finding that balance. we hear it's a seller's market,

especially in the suburbs around big metro areas. it looks like you are continuing to buy properties. why? >> two things really first, this millennial cold hearted tweem between the age of 22 and 36, roughly 65 million people are coming our way into our target demographic these people want flexibility of choice remember a third of the country leases something in some way, shape or form every year i think the ability to have a quality experience and a nice single family home, but fought have the burden of bringing the nature of downpayment or ownership implications with maintenance and things like that can be quite appealing to people so we offer a service that, quite frankly, people have been choosing for hundreds of years nobody has had the scale and size to do it as efficiently and offer the suite of services that we can in today's environment. >> the competitive threat from the purchase markets, i would have to imagine, it's subdued because of the lack of inventory

and it's hard, at least i would think, that that picture is going to be a big shift to turn around to where you are actually seeing either higher churn or less interest because the purchase market got that much better >> you are right supply is at all-time lows in terms of where you are seeing that inventory a lot has to do with the fact that 2008 and '9, the great housing slump had everybody reign in their focus in terms of not overbuilding in parts of the country. so we feel the same way. we think supply will stay relatively tight with that said, we're active every day, so in the fourth quarter, we have over 100 homes to add to our portfolio. we feel really good about the opportunities we see in front of us we will continue to find ways to grow our portfolio the demand is telling under the circumstances that we need to. >> what are the marks you are most focused on, especially when you talk about adding to your portfolio. we had that report from diana olick looking at detroit is that example you set your sight itself on?

are there others >> we were very deliberate the population continues to move south, it's chasing warmer weather. if you look at our book of business, 70% of our revenue comes out of the west coast and part of florida. these sun belts or smile markers are very desirable they're letting themselves, especially as people think about this flexible we are now come accustomed to, where can i live? because i can work remotely, it largely points to some of these warmer-weather markets that have favorable demographic profiles and household information and job growth that is what you would want to see as a property owner. so we'll continue to invest in those parts of the country they're lending themselves to that outperformance. when you look at the way households are performing, where the demographic shirts are occurring. they tend to be in their warmer markets. >> and do you have any data at this point that sort of givers a sense as to how many people move into one of your homes and eventually buy one of their own? >> it's something we track as people come in and out

so first and foremost, people stay with us about three years right now in our business. but you know, every quarter, or i would say it's easier to talk about it on an annual basis, probably 8-to-10% of our portfolio cycle into homeownership at some point in time that's been pretty steady over the past nine years. >> all right dallas tanner. thank you for joining us today. >> thanks, for having many me. >> let's get to our etf spotlight. the ticker there is the x bi it's had a good year, 64-plus percent. higher this morning, by the way, actually, it's not up. but veer biotechnology shares are jumping after they announced the covid-19 partnership with glaxo smith kline will research therapies. glass glasso also increasing next hour by the way, company

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. welcome back here is your cnbc covid-19 update at this hour. president biden says the covid vaccine will be available for every american that wants it by the end of judgment. he made that statement in a town hall meeting last night. new york sues amazon amazon actually sued new york in anticipation of today's suit, claiming it does have rigorous safety protocols and that the issue is a federal matter. japan is starting its covid vaccination program today.

that's a month after other major developed nations began. now, while japan has a small fraction of the cases of other countries, there are concerns that not enough people will get vaccinated in time for this summer's olympics. and the first shipment of vaccines have arrived in the gaza strip the palestinian authority says delivery has been delayed by israel israel has inoculated more than a third of its population. that's the cnbc update for this hour carl, back to you. >> thank you very much crude oilis at the highest level in almost -- actually more than a year as major producers if texas continue to cut output amid that winter storm we will talk about all of this, the sector, the future with goldmaahe n thhead of commodity research next. it was down 184, currently down 154. don't go away.

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some big and surprising data out this morning who better than that to go to than steve leishman? >> it's interesting. it looks like americans celebrated christmas in january, with blowout spending that coincided with new relief of washington and some opening of the economy like bars and restaurants. spending surging and a host of discretionary areas, department stores up 24%, so big some people don't believe these numbers. electronic appliances up 15% furniture 12%. there is your proxy for internet spending up 11% and even some life in the bar and restaurant world up 7% right there. moving along, the spending surge will likely push up growth estimates for the quarter. they had already been running a strong 4.5%. spending coming along with higher inflation, at least at the wholesale level, monthly gain and producer prices that's the highest since the current series began published

in '09 other areas also saw big gains including medical costs. with added relief from washington, the question of overheating the economy and how the fed will react is certain to be asked with greater intensity, carl >> all right speaking of prices, steve, the oil market, hard to keep your eye off of it. millions of texas residents continue to be out of power. all this taking place in what our next guest calls an already tightening market for oil. goldman sachs, head, jeff curry joins us thanks, for your time. >> thanks for having me. >> i know you last month said brent was 65 by july we're in the ballpark now. just give us your sense of what you think has happened at least domestically in the last week or two? >> i'm not going to say that the

situation in texas has had a big impact on the oil market they've had a very large impact on basis markets the local gas markets in the region, absolutely explosive prices there so, micro-- very important it's had significance impact. macro, it's not that large we probably lost a million barrels a day of pre-production. we also lost 500,000 barrels on demand the net is a modest tightening i think what's going on. and you look at the rise in oil prices up through this, almost all that rally that you are referring to happened before this event and there is really, i think the big key thing we are talking about, we commented a month ago, is that demand, the levels were revised up for the fourth quarter of last year activity and demand was much better than we thought inventories grew a lot faster than we thought. as a result, the market is in a big deficit. i think that's why we're at $65

a barrel the other thing is positioning you'd think it would be long everybody is inflation trade they're long copper. they were long everything else but not crude. why? because like us, we thought this thing was going to tighten in the second half of next year, it has tightened a lot earlier. so they can get long now >> right right. i'd love to get your view at least just for a moment on the texas episode, specifically, though, as it relates to any commodity that you cover do you believe this is going to raise more long-lasting questions about systemic risk of the grid or is this more episodic, happens every decade regulators take a look and we move on? >> no, i think as we move to a world that is more dependent upon renewables, that do not have the flexibility to respond without having adequate gas capacity, volatility is going to be, you know, you saw it in europe as well, so this is not

isolated to the texas market it's happening on a global basis. and i think what they're going to do is you have to create more capacity, more reliability in the system so, you know, seeing this happen, you know, after you saw it in europe earlier this year, you are seeing it here it's an indication, hey, weigh need more reliability in the system. >> give us your gas as well, this story has been moving up sharply. do you expect that to continue >> in terms of again thinking about you know you have a, the local basis markets are really tight. the broader market is trading about 308 today. our target is 325. really at the core of this story is that demand is going to, whether it's lng exported to asia or normalization in demand

is up, supply is not this goes to the broader situation with both oil and gas. now you overlay these problems with the production. are you going to ends up with a tighter market come this summer, which is the foundation for modestly bullish price outlook >> i realize that we focus on the winter weather the storms impact on texas, specifically i think back to the last time you were on the show you were talking about the fact you were entering this commodity super cycle. you look at the price of copper, tin, iron ore, luller. i request go down the list right now. just huge moves more broadly in a commodity complex. i'm kur russ how much -- how much room is there to run? and what does that mean to the broader inflation discussion and reflation discussion that we continue to have >> when you look at cyclically as you just indicated, you'd run out of runway. so at this point you need cost inflation to come in and lift

all the boats up you are starting to see evidence of that beginning to happen. i want to point out, every single commodity market with the exception of zinc and cocoa are in a deficit right now i've never seen that and you are this early into this new business cycle which underscores the structural problem of the supply then as we move forward going out of the courses here, you will see continued demand strength in already tight markets. and copper is so tight, i don't even now how we begin energy transition copper is the core of electrification. >> well, some of your colleagues on the street, jeff, i am sure you are aware, are extending that to the point of which they are making long-term black swan calls on shortages and deficits that in their words destabilize societies. are you even thinking about that >> yeah, you know, when prices go up, that is the mechanism that is going to solve this. people are going to get in '08,

we were forecasting big deficits they go, well, hey, that catastrophic event you are talking about never happened yeah, it went to $147 a barrel the system corrected u. you never ended up with catastrophic shortages. still larry with gas in the 2000s. i say, we're out of copper the price of copper has to go high enough so we figure out how to pull scrap out of the system. we'll find that price. the question is, where is it so we talk about our price going up $65 a barrel. cost inflation is beginning to happen as we go higher we will go in search, we'll find out where these numbers actually are. i don't think we will ever get to the point you have democrat strofk -- catastrophic shortages, the consumer will take at this time other way. >> it usually works that way >> yep. >> fascinating times we can't have you on enough these days we appreciate it very much jeff currie.

thanks, jeff. take a look at palantir, they are rebounding. another sign perhaps of purchases, another 1.5 million shares for the next generation internet etf also you had price target moves. i'm looking at a goldman sachs report that says, yeah, it's a 30% grower so it should trade 44 times calendar year 2021 sale. that reminds me of reports i would see in the late '90s, one can imagine if you fly that multiple of facebook, which grows, 23% anyway, palantir shares are up after this the holidays weren't exactly smooth sledding this year, eh santa? no, but we came through smelling of mistletoe. the now platform lets us identify problems before they became problems. if only it could identify where my ball went. this you? hmm...

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why rising tasy reuryields may not dampen investor appetite for stocks or bitcoin. we go behind the scenes with jim bianco more "squawk on the street" coming up.

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energy is a bright spot yet again. on the other hand, we are seeing notable under performs in the technology sector as you can see behind me here now within that group, players in the chip and semi conductor space are under pressure, names like terra dyne. that ticker is the smh we want to highlight the downside move of apple under performing the broader market of big tech rivals microsoft and amazon keep an eye on the overall market s&p ubp&p subp 500 spacex bringing the space upstart valuation to a staggering $74 billion thereabouts. we're about 60% higher than spacex's previous round last august

sources telling cnbc those new funds were raised at 419.99 a share, just below 420. in regards to his other company tesla, insider investors were able to sell 750 million in a secondary transaction. also significant, spacex raised a portion of the funding available in the marketplace cnbc as a company received insane demands of $6 billion in offers over just three days. it's not surprising, they have enjoyed fervent investor demand, the president of spacex telling you in 2018, even then, the company can afford to be picky spacex next genre usable rocket system is under development. we see tests rolling out aggressively in, the also starlinks, a broad band service are rapidly being

deployed service rapidly expanding. that's been happening faster than expected with plans for that business to eventually, possibly, cash flow contingent spun out and go public both of these endeavors are huge for spacex and the industry, both require billions of dollars in investments to be realized and, guys, i do just note, carl, that there is just an incredible it's kind of like spacex and everybody else in terms of space right now. i think some of the of spacex is luring the other space companies to start to consider going public and we are seeing more of that i would expect we'll continue to see more of that in the form of what else, spacs >> yeah. there's a lot on the space front today. politico's got a piece on the nasa acting chief saying the target for a moon goal might be in jeopardy. so a lot will depend, as you

said, morgan, on private money when we come back, live corps bringing in almost $3 billion on the covid-19 testing, issuing a revenue warning, though, as these mass vaccinations continue to grow. we will talk about that with the company's ceo in a moment. these days, we want sophisticated but simple. cutting edge made user friendly. in other words, we want a hybrid. and so do retailers. which is why they're going hybrid, with ibm. a hybrid cloud approach with watson ai helps manage supply chains while predicting demands with ease. from retail to healthcare, businesses are going with a smarter hybrid cloud, using the tools, platform and expertise of ibm.

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welcome back crowd source seeing an increase in ceo adam schechter. adam, thanks for being with us >> absolutely. good morning, morgan >> it looks like a strong quarter and really a strong year saying that all things considered given we had the pandemic sweep the globe and the development and deployment of testing that labcorp has developed in the past year i'm curious, though, as we see covid cases come down and come down pretty significantly off that peak at the beginning of this year with all the holiday travel, what that is going to mean in terms of demand for testing and for those capabilities that you do offer right now.

>> sure, morgan. as you saw with our fourth quarter earnings we had a very strong fourth quarter and a very strong 2020. importantly, our base business began to return to normal. at the beginning of the pandemic in march of last year our base business was down almost 15% both of our base business in diagnostics and drug development actually showed growth versus the prior year and then on top of that we were involved in more than 400 covid trials, and we're doing a significant amount of testing. as we look at this year i think the need for testing who has the virus will probably go down as more people are vaccinated at the same time a lot of that capacity will be moved to other things such as measuring antibodies to know if people are immune to the virus potentially. we're also using our diagnostic laboratories to help accelerate the clinical trials for things like vaccines. a lot more for mutations of the

virus. i think the types of tests we do have change significantly over time >> first, and i realize you do have this at-home pcr test that is rolling out under emergency use authorization. in general, why is it still so hard to get a pcr test result back in a timely manner? this is personal experience. right now it's up to seven days to get a result in the new york metro area why is it still so difficult >> our turnaround time is a day right now. if you order a test and it will be fedex'd to your home, if you fedex it back to us the results are within one day i don't know the specifics where you're seeing the times of delays on average labcorp's turnaround time is outstanding. >> given the economic hardship people are under, they still need to get tests done, for example, and some of yours can be quite expensive have you seen an increase in

delinquency among your customer base beyond what their insurer will pay or has it been typical? >> i'll start with covid testing. in order to make sure everyone had access to covid testing that needed, we would charge nobody any upfront costs and would only charge the insurance companies everybody has access to our covid test whether it be the pixel test morgan mentioned that you can do and collect a specimen at home or go to your physician to get a test done in terms of our other test we work with managed care most are reimbursed. we haven't seen a significant difference in delinquencies but try to do everything to ensure the tests we do are reimbursed by managed care customers. >> we have a lot of public officials. in new york there are theories office space might be turned

into testing sites where you get a test and then you're able to go into a public venue like a broadway show or a concert does that seem to be to you? are you thinking that way as well >> i think to get people back to work and school, we have what we need if people continue to be vaccinated, test those who have symptoms or those exposed to symptoms i think we have significant capacity today at the same time in the future we might have an antibody test people have to take in order to know if they're immune to the virus. there might be a passport program that people show they've been vaccinated and are not likely to catch or spread the disease. we still have a lot of scientific work to do. it's amazing to think at this time last year labcorp had not run its first pcr test yet

we started in march. we do to 275,000 test as day and turn those around in a day we've made huge progress and will continue to science is continuing to change and evolve >> which leads me to johnson & johnson ceo gorski said covid may be here for the time being you are expecting to focus even more increasingly from a business perspective on things like antibody testing or jeageneti sequencing >> i agree i think covid is here to stay and we'll have to learn to live with covid with vaccinations, new treatments, and we're a big part in developing those and new testing to track the mutations, to track the mutations to know who is not susceptible to the disease anymore. when we bring all those things together by the end of the year we'll be in a very different place.

i'm optimistic where we're going but realistic we're going to have to learn to live with covid. >> yeah, i love that, though, the idea we could see some return to normalcy, whatever that means, in a post-pandemic world before the end of the year thank you for joining us >> thank you for having me today. shares of wells fargo up sharply, over 5% in the last few minutes. bloomberg reporting the bank has won fed approval for an overhaul plan tied to its cap on assets the decision could be a step in that direction and, again, that is according to bloomberg having a significant impact on shares of wells fargo. carl yeah, wells at this moment leading the s&p. the gainers and laggards followed by carnival as we talked about materials a little while ago. we'll take a break here. a lot more still to come on

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