irs, joe. >> okay. one more reminder, don't even say that one more reminder to catch an exclusive interview with treasury secretary janet yellen today at 4:00 p.m. eastern time, on closing bell. we got to go make sure you join us tomorrow see you guys "squawk on the street," that's next good thursday morning, welcome to "squawk on the street." i'm carl quintanilla with david faber and leslie, cramer has the morning off, more signals this morning that the backup in yields is beginning to pinch equities at the margin features are weak. nasdaq is down a percent over the past couple of days. ten-year 130 energy prices spike on what's become a true humanitarian crisis in texas. our road map begins with the gamestop hearing with the ceo, robinhood, reddit, melvin, and citadel, all sort to testify. >> then the latest on that very cold weather in texas, as the

governor warns of continued misery ahead >> and later, walmart drags down the dow, after falling short of the street on earnings we'll break down the quarter, ahead of our exclusive, with the ceo, later on this morning carl guys, a lot of interest in the hearings this afternoon on gamestop, as we mentioned a pretty extensive list of people giving testimony one report, i only hope they dig down deep enough and discover as i assume that there were people disguising themselves as retail steaming on the crowd. >> i hope they dig deep as well. it's hard if you look at the history and track record of hearings on complicated issues and this is nothing short of complicated. we're talking about market structure here we're talking about issues of fairness in the markets. we're talking about the potential for manipulation none of these things are easy to really dig into on the surface, when you've got 54 lawmakers, and a slew of people on the other side of the table, serving

as witnesses, but i agree with carbon, i hoe hope they dig deep and find answers after today's hearing. it will certainly be one of the more history-making hearings that we've seen, just given the caliber of witnesses that have been called forward. david, i don't know who you're most looking forward to, to hear from today, but they certainly got a diverse group of perspectives, all men, not diversity on that front. >> no, no diversity there. >> you're right, listen, i don't know if they will focus most perhaps on mr. tenev and robinhood given it was central to the story in so many different ways and whether the bulk of the questions may be directed towards him but i'm interested in hearing from all of them, as you might expect griffin, we don't hear from too often. and dave plotken, very quiet typically as he has been, having had a great run of success for a long time, until he ran into something he just did not risk adjust for

and he says that in his letter i'm curious leslie, you've gone through the opening statements and more, tenev ran to 15 pages and i don't think he will read all of that. anything stand out to you? or sort of kind of what we expected >> yeah, i mean i think it's important in looking through these statements, to understand exactly what each person cares about, and what they think they're going to be asked about, they want to get ahead of that in advance, so for example, you've got plotken of melvin, who takes on short selling, straight from the very beginning, basically saying, you know, our short positions do not manipulate the price of stocks in which we invest in. we do this as basically a directional bet, a belief that we have, about companies falling to what they think is their intrinsic value. it is as simple as that, basically. interestingly, you look through kenny griffin's testimony, and he gives very little mention of the fact that he also runs a $34 billion hedge fund it's all about his securities

business sil citadel security, separate from the hedge fund but caught up in a variety of conspiracy theories about how that impacted robinhood's decision to restrict trading and so forth they have said that they had no bearing on robinhood's decision to limit buy orders related to gamestop and a whole host of other securities and then you get to, you know, robinhood, vlad tenev's testimony, as you mentioned is incredibly long and he talks about a variety of issues and he looks at this issue of what is known as payment for order flow, and it is way robinhood makes money and a way to provide commission free trading and provides robinhood with essentially a rebate in order to trade their order, in order to execute their orders and vlad says they received more than a billion of price improvement thanks to that situation, but

that's something that lawmakers have already come out and said that it is worthy of investigation. they're a little bit skeptical of that to say the least and then steve huffman, ceo of reddit, saying there are no bots or nefarious actors that he can tell participated on the wall street bet site and keith gill, who i think a lot of people are looking forward to today, as a character, a key central character in this whole situation, where, you know, he is their there basically as the retail investor, poster child, of this whole phenomenon, carl >> it's true and you know, you're going to see, on the bottom of your screen, the words gamestop a lot today, and that's not our producers being clever that's the name of the hearing it's called game stopped who wins and loses when social media and investors collide. three big sigh lose of interest that are represented and questioned at this hearing today. maxine waters of course, chair of the committee was on closing bell last night, talked about

not so much robinhood although she addressed it but also melvin and citadel in particular. what she wants to hear here's what she said. >> i want citadel to tell us what role they played and what happened i guess january 28th. and i'm simply asking for facts. i do not come with any preconceived notion that i know everything that went on. and i'm asking them not to come with a lot of extraneous materials. tell me exactly, what role did you play >> meanwhile, david, some of these reports that the s.e.c., along similar lines, is weighing just whether or how to demand bigger transparency on the short side, so there's going to be a big education today for a lot of people on the capital markets. >> that always comes up, of course, the question, transparency, in fact, it is the transparency to some extent leslie, that seems to have

gotten melvin in trouble in the first place. a lot of their positions having been shared to some extent and not allowing people to go after those names in which they had a very significant short position and also, important to remember, here, when we talk about what happened, leslie, it wasn't just melvin, it was many hedge funds that perhaps they had not fully accounted for, that followed his trade. >> absolutely. >> that followed, given his track record and everything else, it simply followed along to some extent, and so perhaps they did not fully recognize, not just how large they were in a particular name, obviously they knew that, but how large so many other hedge funds were as well on the short side, and all of that, of course, leading to a huge mismanagement essentially of the portfolio >> yes, i'm really glad you brought that up, david, because one of the key arguments against disclosing short selling and short positions is this idea that you could get, you know, too many crowded trades like you do on the long side, but on the short side, it can be even

riskier if you have a situation where maybe your favorite hedge fund manager has piled into a variety of companies that they want to short and then you have this kind of pile-on effect. another argument against disclosing short selling is this idea that it could cause management to confront various short sellers, and you know, lead to some sort of debate, and make short developers not want to short the stock, which they argue short selling is good to help bring the prices of particular securities closer to their intrinsic value. now, on the flip side, carl, is this idea of transparency, to understand the risk that is actually out there, and the fact that we do get so little data on short selling in particular, it's something that, you know, for companies, as well as the various players in the marketplace, can make it so they almost have a black box, this pocket of risk that people aren't as accustomed to. so it will be interesting to see if the s.e.c. does actually move

forward and mandate even some sort of disclosure with regard to short selling >> leslie, if there's one thing that has stopped people from single name short, it's this >> right squeeze. >> what's happened here to melvin in particular and as well to, a couple of those funds, it's enough to make, as i reported, any number of hedge fund managers who perhaps might have taken more sizable positions say no more. >> look at what happened with herbal life, right in. >> that was a very public short. of course, this was many years ago now, but by being so public with that short position, and of course, it is a very large hedge fund, took a very large hedge fund, betting against herbal life, brought in carl icahn to the fray, and that created a squeezing dynamic just by kind of being up front about what his position is in shorting that name so you're right, the fact that, you know, if you do disclose, you almost lend yourself to just

being a target of a short squeeze. >> guys, we will watch that and it will be very busy this afternoon, obviously, and we will monitor with leslie's help. and in the meantime, we pill turn our attention to the state of texas, the energy crisis there which has become sort of a series of cascading failures you've got obviously a couple dozen dead, still hundreds of thousands without power, and some of the anecdotal something els of the pain down, something els of the pain down there, people boiling snow and using their propane tanks on their grills to get drinkable water. livestock obviously dying in the cold some crops have been wiped out and then energy, with a fifth of refining capacity in this country out. and futures the highest since the middle of '19. >> and natural gas not leaves the state for some time as well. we're watching closely wti is now above $61

we've talked about the resurgence, in the number of the major energy company shares. that's been going on for some time by the way, and out of favor group from last year, since the election, strangely enough, it's been up sharply, as have, and this has nothing to do with this story, as has financials, which we can talk about in a bit, but leslie, it's a humanitarian crisis right now. they are restoring power, thankfully fewer homes without power than there were certainly this time yesterday but we're watching closely and they're still enduring some very, very bad weather. >> and there are some really interesting second derivative effects that are starting to play out here, number one with the chip makers, there are several large company, samsung, nxp, who have had to scale back their production at a time when semis are already under pressure for supply chain constraints but they have major factories in austin, texas, and they have been asked by the power pry providers there to shut down in

order to con serve energy and i'm sure we will see more stories like that take place as they work through all of the various challenges in texas, carl >> of course, the debate continues about which method of energy, which fuel source is the true culprit do you have the governor of texas who had suggested that it was in fact, a signal of the failure of renewables. talk about the limits on that gas, exporting out of the state, here's what he said. >> i have earlier today, issued an order effective today, through february the 21st, requiring those producers that have been shipping to locations outside of texas, to instead sell that natural gas to texas power generators that will also increase the power that's going to be produced and sent to homes here in texas. >> if there is some good news, david, it's not just the fact

that they're expecting temperatures in the 50s this weekend but the first time, since the middle of monday, the grid load is climbing, suggesting that they are able to at least restore power to the people who have been without power the longest. >> yes, and we can only hope that happens as quickly as possible carl, i mean you can't help but note that everything becomes unfortunately a political issue as did, as has this, and i know you'venoted it on twitter as well, in terms of at least renewables being associated with the democratic party, and obviously, the republicans in texas sort of going after that sometimes you wouldn't expect that to be the case, but unfortunately it is there. so they're fighting that out as well while they also obviously try to get the lights back on. >> yes and you know, it's going to be interesting, leslie, the house is expected to pass covid relief at the end of next week, but infrastructure now as part of the discussion is not that far behind they're throwing out figures like 2 trillion, 3 trillion on

the dem side and looking at crafting this package, a couple of years talking about it but to what degree does the grid become a part of that equation? >> i think that is a fantastic point and i was actually talking to a big sustain ability investor yesterday about this very topic annual the idea that this infrastructure spending under this new administration with regard to clear energy will be a really big component of it. and i think, you know, just the timing of this whole thing, and taking place in texas, and the focus just on the, you know, the risk of their power structure, down there, it's something that will be just a huge catalyst to improve infrastructure, and improve it in potentially a sustainability way, that maybe, you know, if you didn't have that case study, it may not have been as strong of a point, david, that, you know, that the need for upgrade is dire and here's why >> yes but first up, carl, will be of course the stimulus bill, or whatever we want to call it, the

$1.9 trillion bill working its way through perhaps, and when it comes to the markets, that's weigh hear about in my conversations, is it throwing fuel on an already fairly well-raging fire or not? will it cause inflation? i know we will be taking a look at the broader markets in a moment including the bond market which can be a telltale sign >> jobless claims still elevated this morning when we come back, we will dig into walmart it is a bottom line miss stock was under some pressure, down about 5%. but e-commerce up 69 we've got a wage increase. a big cap ex ramp. and dia v hike and mcmillan on the air later this morning don't go away.

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let's unpack walmart this morning. bottom line miss but revenue up ahead. a $7 billion quarter and ecom up 69 is the slowest since covid began. prior quarter was up 80. i wonder if that will be leaning on the general idea that there may be some deceleration as we come out of the pandemic. >> that is a key question and what are comparisons going to look like as well as we come out and people get out and conceivably going to the store that they perhaps are buying

things from remotely so to speak. also focused and i know we're interested to hear from mr. mcmillon on their increase in the wage and it is raising the associate average to about $15 not the bottom, and i think it is $11 an hour and amazon a couple of years back went to $15 an hour but it is still significant and carl, remember when you went down and interviewed i think mr. mcmillon a while back when they first started on that path towards raising wages. >> that was a seminal move, a big move to get ahead of what obviously became a mainstream discussion, less i, about the minimum wage and another thing that strikes me and david will remember this as well, whenever walmart starts to talk about investments, even from a position of financial strength, the street is often unkind in the beginning. remember the day when we were looking at the shares. >> they were up stairs and they

also warned that day, i think, as well, in part because of the increased investments they were making, in the things that are now paying dividends of course, leslie, which is of course their ability to have operated during this pandemic, and succeeded during it, because of having the infrastructure they needed in place to get things to people at their doorstep or to have them come by and pick them up at the store without having to go inside. and it proved to be obviously important not just for their long term strategy but shorter term given the unexpected consequences of the pandemic. >> and i'm thinking about the days that we could be all together, ancient history, but to your point, a lot of companies of course, have been disclosing just how much of a hit they're taking on the bottom line, as it relates to the costs to protect their employees, and others, against covid. for walmart, it was $1.1 billion in the quarter, that's up from 600 million in the third quarter, so i think amazon is somewhere along the lines of $4 billion, these companies have to

really shell out some cash, and other intangibles as well, not only just cash, but in order to make sure that they are protecting customers, protecting employees, and all of that adds up, over time, and to carl's point, you know, whenever you start to see numbers like that and other sg&a, also higher during the quarter, you know, investors start to get a little spooked in it. and there is also this kind of sentiment right now, where you see these companies that have really benefitted by staying open during the crisis, as things start to return to normal, as more people are vaccinated, you know, they do start to kind of take some money off of the table, and investors take some money off of the table. >> a bit of them do but the walton family doesn't and that has been the key for mr. mcmillon having long term decisions and a shareholder representing 50% of the shares and i haven't checked it lately, but it is around there, and that

gives you latitude a look at the five-year, before we go to break, that tells the story of mcmillon and his time of ceo at the company, there it is that gives you a sense as to what is actually happening at walmart. >> yeah, that's not a bad return for a behemoth like wmt. quick break here guys. opening bell getting a bit wee ckn os 'rba ia moment i see a new kitchen with a grill and ask, “why not?” i really need to start adding “less to cart” and “more to savings.” sitting on this couch so long made me want to make some changes... starting with this couch. yeah, i need a house with a different view. and this is the bank that will help you do it all. because at u.s. bank, our people are dedicated to turning your new inspiration into your next pursuit. ♪♪

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welcome back pfizer and moderna warning that their vaccines have reduced effectiveness against the south african variant of the coronavirus. both companies say they are taking steps to develop booster shots, or update the current vaccines david, the headline last night, out of reuters was a little unnerving, although fauci has said that that process of refiguring the formula shouldn't be that onerous and gottlieb this morning on "squawk" using the word collapsing when describing what covid cases have done, not just in the u.s. but around the world >> that's a good word to hear. and you know, obviously, we do listen closely to dr. gottlieb in terms of what his thoughts are. it can be worrisome. we are worried about these new variants here, more of the u.k. perhaps variant which is obviously more transmissible and perhaps may be more virulent but we want them to collapse. meanwhile, i would like to get a vaccine as soon as possible and i don't know about you, i know a number of friends who have the advantage of being younger than

me but perhaps not as healthy because they've been able to get them leslie. >> yes. >> i'm not one of them. >> the things that qualify in the new york area, heart murmurs and bmi over 30, and unfortunately, those of us who are getting on in years, if you're healthy, you're not there yet. >> i'm clinging to what gottlieb said a few weeks ago, that if you want a vaccine, you should be able to get one by the end of next month so that's kind of what i'm looking forward to, with regard to, you know, letting my arm be at the other side of that needle but, no, of course, the variants have been the big variable out here and i do have to wonder, as i do prepare a, as we prepare a booster shot and speaking to people who are fortunate enough to get the vaccine, will they be as willing to line up for a third shot and some people were a little hesitant to go back for the second one which is the benefit of the j&j shot if it gets approved, it is a single dose, so i think there is a psychology to this, that, you

know, we have to consider as well >> yes, j&j of course, that fda panel expected to meet, i think at the end of next week, unless i'm corrected, but that has been the hope, that it is one shot, and of course as fauci said this week, one of the negative bits of news, that their inventory, at least with the outset, it is going to be fairly low two to three million doses before they can camp that up there's the opening bell and the s&p screen filling in with breadth. a little weak here, david, as, i don't know, we have, there is this lingering debate about at what level the 10 year starts to become a true liability for stocks, and i think nomura 1.5 and jpm closer to 2 and certainly we know what number is magic at the fed. >> i guess we do and another question is, and we're hearing from powell, what, next week, i guess, testimony in front of congress, but leslie,

if we get inflation 2.5 to 3%, as some believe is possible through the summer now, given where we are in the economy, and the expectations for, what, 6% potential growth this year when you throw $1.9 trillion in, not to mention potentially additional spending on infrastructure, which is broadly supported. and all of that buying power but this fed typically doesn't seemoverly concerned about that, and the likelihood seems to be that powell is not going to pay that too much mind but it is a question in the markets right now, it is being reflected in that 10-year note which is over 1.3 >> i know. and it's remarkable, especially when you look at how things have kind of done, it basically a 180, over the course of the year i remember last february, watching that tick down below 1% thinking how could it get any lower than that, of course, it did, subsequently, but you know, the inflation question is going to be a big one this year, what

the fed does about it, i think you're right, most people in the market believe that they will let inflation rise above that 2% level. the fed has indicated as such. but ultimately, when do they get to the point where we're raising rates, and it becomes at the forefront, and what does that mean for a lot of the valuations in a variety of markets? namely equities which has certainly benefitted from such cheap money that's out there right now, carl. >> the fed minutes yesterday, did include some lines that led people to believe that fed staffers aremaybe a little mor cautious than powell himself talking about vulnerabilities and financial risks being, quote, notable but we should learn more, as david said, when powell talks to the hill next week right around 3900 this morning, guys, bitcoin, bitcoin and gold, on pace for a 9% weekly gain

fourth straight gain, having done that, since january >> yes there it is, down about 1% 52,000 i have nothing to offer for bitcoin. i will go to anybody else who wants to talk about it i just, i'm still trying to understand blockchain. i gave up. i guess i got to try again i don't know, leslie, but there it is, obviously, it's moved up sharply since we heard from mr. musk, i would point out by the way, alternatively growth stocks, many of the ones we focus on so much, tesla among them, have sold off lately, again from the highs that it saw. but it is only up, tesla up, 10% for the year, down another 2% this year. apple is down 3% this year facebook is down over 1% netflix is barely up we have seen sort of, you know, some of the faang names, obviously tesla not a part of that, sell off a bit during the course of this year, while we have watched, and i mentioned this earlier, the banks in

particular, performed quite well, and wells fargo yesterday, performing quite well on those reports that perhaps it would, it would be able to increase its balance sheet, which would be a big deal >> yes, you know, what's interesting about the stocks that have rallied this year, and this kind of goes back to our earlier point when that we were discussing with gamestop, matt maily had a note out this morning, looking at the 50 highest short interest stocks in the russell, a basket, an index that looks at these, and it has rallied 58% on an intra-day basis over the first 18 trading days this year and that compares to a rally of 3.8% in the s&p 500, and an 11% rally in the russell 2000. over the same time frame i think this speaks to just the increasing attention people are trying to get into these short squeeze, they saw the benefit with gamestop, even if it was just temporarily, and they're trying to replicate that by just looking at whatever stocks are

heavily shorted tat this point. i'm sure this will be a topic of conversation in a few hours time on capitol hill. >> you look at jpmorgan for example at all time highs, $430 billion market value at this point. and again, the banks have been very strong. citi the least amongst them. in part because it sends money to people apparently that don't need it or want it, but can keep it, so that's good, i mean everybody might want to open a checking account at citi because you never know what will end up in there and the judge will say hey, you can keep, it talking about the $500 million that was sent in, incorrectly, on behalf of rev lon, by citi. paying off debt but rev lon wasn't actually paying it off. it was paying an $8 million interest payment and they sent back $900 million and they got back $400 million. >> people gave money back. >> not all. >> $500 million didn't get paid back. >> i was surprised that some actually did. >> some did. >> the argument from the judge

was you did not necessarily know whether or not it was, you would have never assumed that citi would be sending you this money incorrectly, you would assumed that rev lon was prepaying some debt, i guess, although a pure hedge fund, if you're a hedge fund, if you are doing business with them in the future, you might not want to give the money back if it was sent to you incorrectly. >> the ceo, citi stock the laggard, 4%. and wells fargo, 20% and jpmorgan up 14%. so very strong performance in a number of the big banks, and in part, as a result of what we were talking about earlier, the move in the yield curve. >> well, and to your point about wells, today jpmorgan finally goes up to neutral with a price target of 37, which is essentially where it is, citing some of that progress with the fed, but wfc has gone from 20 to 37 in, what, 90 days >> yeah. yeah, it's been a significant

move remember when we were looking at that company's market value, and it was below $100 billion. it's now 150 billion again, put it in perspective, well below the 440 billion market cap of jpmorgan, given their respective sizes, they aren't that far apart but obviously wells fargo for example has not been able to increase the size of its balance sheet. even if you're not earning a huge net interest margin, leslie, it pays to have more assets because you can earn more than fewer assets and you can lose more money of course conceivably if they go bad but wells has been capped and that is big for the business. >> asset gathering speaking of financials, apollo, the lead independent director, clayton was the former chair of the s.e.c., stepped down recently from that role, and this is interesting, because it's all part of this shakeup that apollo is doing to be more corporate governance friendly.

this move to appoint a lead independent director is part of that they're moving to this one share, one vote, of course leon black, stepping down, at some point, between now and july, from his ceo role. so a lot of corporate governance changes there which we're seeing in the alternative asset industry, as a whole a lot of this is, you know, in an effort to get included into some of the indexes that they've previously been excluded from, given their structure. but this is certainly a news worthy name, a news worthy move, as a company that is certainly in transition. >> no doubt it is in transition. >> carl, for give me, but i got to come back to two names i've mentioned a few times and we're talking a great deal this morning about stocks that have been heavily shortsed and then it moved up dramatically, and i don't know how fully that's just the story here on viacom and discovery, but i mean take a look at viacom shares. you know, last year, we were

talking about this company, and i mean nobody wanted to own it when it traded at five times ebitda everybody wanted to sell it. now it is trading at ten times, everybody wants to own it. that's not going to put it in perspective, guys. just give me a couple of months here 24 hours is nice but yeah, there's january 4th, 66% since the beginning of the year, 67% since the beginning of the year, this thing is back towards almost its all-time highs and it does beg the question, you know, football coming up, which is going to cost them a great deal, and the expectation is that, it's going to be more or less where everybody is right now, some question about the thursday night game, amazon trying to come in for something, it's unclear, but let's assume they have to pay more there have been some questions as to why don't you sell some stock? we talked, jim talked endlessly about why gamestop didn't sell stock, they were under perhaps some regulatory structures in terms of doing so and nothing to stop viacom from doing that.

i mean pad the cash account to pay for football >> the fans want the football. >> david, we've been talking about this a lot, with jim, related to some of the media names, certainly gamestop, you saw zillow, offers a billion in class c, stock is down a touch on that, and did you see cheg? cheg raises 9.4 million shares offered at 102, they are going to raise more in this round david than the whole company was worth, at its ipo. >> that's incredible and cheg has been an incredible performer, obviously dan a frequent guest and we used to bring him on to talk broadly about the world and now we got to bring him on as a ceo of a $13 billion market cap company and i have not seen that offering that was a failed indpo by the way. that thing went public and then straight down there. was an opportunity there to

really benefit if you go back and look at, and there you can see, it the performance of that stock. 400% >> it's a remarkable capital markets environment right now. last year, there was, it was a record-setting year, in terms of stock offerings, the primary and secondary, and you know, that trend has not slowed down at all this year, you know, david and i, and carl, we've talked tremendously about spacs, that's a huge driver of this, but you also see companies doing follow-on sales as well, and that is something where people see the window is open, and they want to strike, while the iron is hot, because there's no guarantee that it will stay open forever, and the last thing you want to do is miss out on the opportunity to sell some stock, get some cash, and you know, hunker down in case there's additional volatility in the future. >> yes, i mean we got to end, carl, before we get to rick, on spacs. leslie just mentioned it i will do one today because we will have the guest on later the highcape capital acquisition corp the deal there is preet ommics

and actually the gentleman will join us, jonathan rothberg, who, i mean, was on with butterfly, because that was also one of his inventions, hasn't opened yet. semiconductor chips. proteins as opposed to dna it is decoding proteins which helped with specifically sort of giving you a sense as to what disease you're dealing with, and how to treat it. we'll talk to him a lot about that i mentioned this, though, because in the pipe was kathy wood from arc and that seems to have excited a lot of people as well not a large deal not a large overall spac deal, leslie, when they issued it, but the pipe's almost 500 million. it's got some very well-known names in it, including arc as i said and it will be up sharply. we'll talk to him later and see what he has to say, carl. >> all right, guys, so we are lower across the board it is still on pace for the best month since november for the dow and the s&p, and walmart is dragging about 50 points off the

dow. let's get to rick. >> hi, carl. we had some big data today regarding the notion of inflation and pricing pressures. and import and export prices but yesterday we had the january read on ppi and i would like to revisit that as inflation is such a hot topic, and as you can see on this chart, the current iteration of how to calculate headline ppi or final demand was changed, they changed it many times actually, but this one goes back to around december of 2010, when the change was made so the chart goes back to that point. yesterday's read was the highest on record, for this particular form of ppi. and i think that needs to be mentioned. i know that cpi may be more important, but we're starting to see it everywhere. whether it's temporary, or it starts to get imbedded as steve liesman brought out, that's the issue. quickly, look at intra-day here, you can see the data today, pushing yields higher. and if you look at the 10 chart,

131 and 133 is the high intra-day, as you can see, twice, a double top, but i wouldn't look for that to hold, and 1.32 is the high close, going back basically a year. if you look at the three-day of 30, you can see 2.09 now, 2.09 is the high close, 2.11 intra-day. why am i giving you all these numbers? to show you how close we are there is good momentum we're still rather guns hot on rates especially treasuries. and finally, let's do 10 of 10 here's a 10 year chart of 10-year rates andi will continue to hit this one because it's an easy trade we are going into the high 1.30s. that's the numbers of 12 and 13 and whether it stops there for very long may be the biggest issue of all carl, back to you. >> all right, we'll see you in a bit. thank you, rick. as we said earlier, later this afternoon, an exclusive with the treasury secretary, janet yellen, we will sit down e osg ll at 4:00 eastern time on thclinbe back in a moment

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edges beat shares down after the semiconductor company warned that global chip shortages will continue this year joining us is the ceo. that chip shortage you came back on a call a number of times where you basically said it's more likely we will be operating a constrained supply environment the balance of the year give me a sense as to what you are seeing and what it will mean for your business. >> good morning. thanks for having me i think what we are looking at is the acceleration of the process of digitalization in the economy, whether it's communications, computing, gaming, obviously, areas like factory automation so i think we are in for a period of acceleration and increasing demand for semiconductors, and so that is good news for the industry and we are all doing our best to

rapidly adjust for us, we have very agile supply chain so we actually turned out in our second quarter, we grew 100% y year over year we have been able to essentially keep up with demand. i think that bodes well for the rest of the year, at least for avi. i think that the industry is going to have to adjust. it takes a period of time to get the equipment in place, to get the capacity in place. >> right. >> to be able to meet all of the demands streams we have here. >> specific to you, your cfo on the call said you have enough capacity to meet the guidance but significant upside depends on your ability to get external wafers and your internal facilities to make that happen, too. >> yeah, we have done a couple of things. we have a hybrid supply chain. we make about half our silicon inside of the company. we procure about half outside.

and we have been capitalizing our business to make sure that we can extend the envelope of possible capacity and supply over the long term we feel pretty good about where we are rate now, and but we are investing in the business and working very, very close with the suppliers to make sure that we can supply the diversity of products that we have that go from factory automation to 5g to computing and server systems, for example. >> yeah, you hit all sorts of stuff that gets investors excited in your call robots and the future of work. talking about ev and the batteries, because you guys have the battery management systems and, as you mentioned, 5g. what's the most important single component of that in terms of the future for this company and what, obviously, you hope will be growing market and market demand for your products >> i think the theme for avi, we

are a unique company in that we sit between the world of the physical and the world of the digital. so our job is to translate all of those physical phenomena like motion, light, sound into signals that can be processed right into the cloud so that is the game we play, and we have the broadest suite of high performance technologies. we play a very, very high-performance game. so you will see our technologies used in everything from smartphones to electric vehicles, both in the cabin as well as in the battery structures, for example. monitoring the batteries so it's a very, very diverse play but our game really sits very neatly between the physical and digital intersection. >> vincent, the semiconductor industry association, the sia, recently sent a letter to the biden administration asking for terrible funding for u.s. semiconductors due to some of these supply constraints

could you extrapolate on what the industry might need? i think you are a member of the sia and can kind of speak to the industry's requirements from the federal government at this time. >> i think anything that improves the infrastructure to build what -- semiconductors are the bedrock of the digital economy. and anything that we can do to improve the infrastructure and the focus on areas like advanced semiconductor manufacturing nodes, process nodes, to up the ante in areas like artificial intelligence, quantum computing for the long term. i think those are really, really good things for america to do because the future is going to be digital >> finally, on ev batteries in particular, we have quite a few ceos of still development stage companies that join us talking about the promise for their technology

you, obviously, are dealing with many of them given your battery management system. is it real are the advances that everybody is touting actually going to happen in terms of the efficiency and the ability to deliver the solid state batteries as well? >> yeah, that's a good question. when you look at the opportunity, today there is about 7 million electric vehicles on the road across the globe. that's expected to go to more than 200 million in the 2030 timeframe. there are continuous efforts to improve the efficiency of batteries using new chemistries. but electronics play a key role, too. the battery solutions we have given their accuracy, enable about a 20% efficiency in a given battery structure. so i think it's the intersection of chemistry and electronics and we will continue to fish the efficiencies we are looking at car companies now trying to get 1,000 kilometers of car engine batteries. so we are on the road. it's going to take time.

but i think we know what to do. >> all right we will be tracking that as well as your company. always appreciate your taking the time thank you, vincent. >> thanks for having me. we will take a break here. another hour of "squawk on the street" continues in a moment. markets are lower across the board. ten-year 131, 30-year 209. a bk aomt. i knew about the tremors. but when i started seeing things, i didn't know what was happening. so i kept it in. he started believing things that weren't true.

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♪ good thursday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla with david faber and leslie picker. obviously, markets are lower across the board walmart is not helping the dow and it's a story of rising rates, perhaps trimming some interest in high p.e. claims dow's down 173 we begin with the gamestop craze heading to washington. the ceos of robinhood, melvin capital and citadel to be grilled by lawmakers today. >> s.e.c. commissioner hester pierce joins the show. >> and continued misery ahead. a warning from the governor of texas as many still struggle for heat and hot water this

afternoon days without power in that state just a couple of hours from that hearing at house financial services where robinhood, citadel and melvin testify what we might hear this afternoon. hey, kate. >> we have gotten a few glimpses of what to expect at the gamestop hearing mostly through ceos prepared remarks. the heads of citadel, melvin capital, robinhood, reddit and the non-ceo today trader keith gill, who goes by roaring kitty. they have shared their statements in the past 24hours while they are addressing the gamestop rally, they tackle different issues reddit's ceo takes on moderating forums like wallstreetbets keith gill defends his trade and says it was based on the stock being what he calls undervalued. citadel and medical vlvin capit on conflicts of interest also buzz around robinhood's

ceo, the 33-year-old has gotten the most heat so far from lawmakers. he plans to address allegations that robinhood acted to help the hedge funds and he says in his written testimony that those claims are, quote, absolutely false and market distorting rhetoric he plans to defend how robinhood makes money. he points out that most retail brokerage firms also get paid behind the scenes by firms like citadel. that's in order to offer free trading and the s.e.c. has permitted it for decades still we expect to hear pushback about that from lawmakers. we had another glimpse of it this morning from senator elizabeth warren which may signal what to except on the house side warren sent a letter to finra urging the regulator to look into the revenue model she is concerned by robinhood's actions around gamestop. she also reached out to citadel ceos ken griffin about its relationship with robinhood and potential conflicts of interest. guys, back to you. >> kate, i am curious, you know,

what do you think the bar is for those who are serving as witnesses today? from a litigation standpoint, robinhood, of course, is facing a variety of class-action lawsuits keith gill has his own litigation issues in the state of massachusetts over his other role, his former employer mass mutual, the fact that that wasn't disclosed as he was necessarily touting certain stocks on the internet what do you think the bar is for these gentlemen as they testify today? >> i think the bar is very different depending on who is testifying the witnesses have different topics that they need to tackle. like you mentioned, keith gill is defending his own trade he was sued just yesterday for potentially and allegedly manipulating the stock of gamestop as you said, he was actually working at mass mutual at the time he has a host of issues on his own individual side. robinhood has to protect the

company, defend its revenue model which could have broader implications for the industry, payment for order flow and the way some of these brokerage firms are played if that gets traction it could have implications for the rest of the brokerage firms they all have to tackle the broader issue. an umbrella of gamestop, but focused issues depending who is testifying. >> that's a perfect place to start, kate. thank you so much. our next guest is an expert in the business model of brokerage firms having been the former e*trade ceo, now ceo at lev terrace acquisition corp thank you for being here i want to start with this question surrounding the business model of broke ridge firms. kate mentioned this idea of payment for order flow which enabled firms like robinhood and others to allow for commission-free trading, essentially requiringer require or has certain market makers paying them for their orders and then those market makers execute

the trades off of exchanges. do you think that this whole atten attention to it is going to create a reckoning for a business model that few people paid attention to before this, or do you think this is something that's providing a benefit to investors since they are able to trade effectively for free. >> thanks for having me back on. when i look at payment for order flow and the way that that was structured, i think there are definitely a lot of benefits that come through from it to the investor, to the retail investor in terms of speed of execution, the amount that they get on price improvement, the manner in which their trades are matched they are getting some of the best execution that has ever been delivered in the space. the speed with which trades are executed, you press a button, it's done, it's in your account and in all likelihood you have got some semblance of price

improvement. i think there is a broader question in terms. individuals who are testifying today who is going to be, you know, there as witnesses for the hearing and sort of where chairwoman waters is taking this, there are a number of different pieces, right. these are some very weighty topics in each of their own right. payment for order flow goes to the entirety of market structure. you can't just flip a switch, turn it off without damaging a whole bunch of other pieces within a system that works very well right now so, honestly, i have a lot to say about it because you have to run it right it is permitted by the s.e.c. and it's something that most of, if not all of, the sort of retail brokers have participated in at one point or another and you have to do it right, you have to protect the customer the thing most people don't understand when they talk about these payments and other pieces, when you do the calculations correctly and weigh the market centers that you are routing trade to one against the other,

you are not supposed to look at price being paid you need to look at execution quality alone and look at the pricing on the other side of it or the mill rate that might get paid if there is a tie or otherwise sort of an enplaying field. so as long as you are doing it right, there shouldn't be any disadvantageous movement to a retail investor. >> i think in ten ef's testimony he said that the customers have received a $1 billion price benefit from using this method without necessarily turning that spigot off, turning payment for order flow off entirely, are there certain improvements that you think can be made that help maybe address some of the conflicts of interest questions or the transparency questions that lawmakers and others have raised about this method >> so, yeah, on payment forward flow, if you are doing it right in terms of order routing, there are reports that each broker is responsible for publishing in terms of what they did with order flow and order routing those are pretty well out there

and there is more, i think, more push for transparency, which is always a good thing in this industry and that could help the retail investor. the focus here just seems to be that there is some kind of a massive conflict that these brokerages are really going out and making money if you are doing it right and you are following the letter of the law that's there, it should be a very easy view to see which market center is providing the best possible execution quality with the technology they have. they can crank that speed of execution and where they execute their trades they can chrank that up based o the demands of the broke ridge when you pit one against the other. it's a highly competitive space. >> congressional hearings often descend into theater, particularly on the house side but i don't know the tone that we are hearing has been very hardy policy discussion i wonder if you have higher hopes for today's hearing

relative to some of the ones in the past. >> without being negative, because i try to be positive al the time, i don't think a lot will come out of the hearing today. i don't think you will see a lot out of this congressional hearing. i think you will see a lot of mudslinging, grandstanding i am hopeful that the witnesses stick to their prepared remarks and areas of expertise and they don't go off a stray or afield because of some of the questions thrown at them i think there are real issues here that need to be addressed each one of them should be broken out separately. i am hopeful that the secretary yellen, if and when gary gentzler is confirmed, and you get some pragmatic individuals with real experience around the table who can dissect each one of these issues and start to make changes that will make sense. the worst possible thing will be knee-jerk reactions out of today's hearings. >> that's always a concern if there was one question that you could ask of one person joining the hearing today, is

there one? and who would it be to and what would it be? >> so my question on this whole piece, having sort of been at the helm of one of these firms in the past, the decision to "stop trading" in an individual name is one of the harshest things you can do. i don't mean that in terms of the wrong thing. you need to have facts that say we need to stop this right now right? that question i would want to see answered why was that decision made what were the facts surrounding? and what actually happened be transparent about it. let us all know. if it was something that you did because it was going to protect the firm, come out and say it. that question, i think, is at the core of all of this. i heard a bunch of different folks talk about it, including sort of thomas and others who say the whole system was at work if that's the case, we need to know about that now and we need to do something to fix it, right. and that's the information i think that the regulators and the policymakers need to

understand why did that happen? what exactly caused it and how can we make sure it never happens again. >> that's a great point. another part of the prepared testimony for both the robinhood ceo and citadel's ken griffin is this idea that it takes too long to settle trades and that exposed unnecessary risks in the system it takes two days in 2021 to settle a trade which requires the brokerage firms to be on the hoke in the day. they recommend finding a solution to bring that t plus 2 down to t plus 1, two days plus one day. how feasible do you think that is what does addcongress need to do reduce the amount of time to takes to settle these trades >> so i don't think congress has to do anything i think a lot of the technology actually exists when you look at black chain and some ways that securities are otherwise settled instantaneously. i don't want to call it

securities, i know that's a bad thing to do. on crypto trades, that's pretty instantaneous and it's available. but again it's systemic. you have to go back to the dtc is the ultimate sort of clearing firm that says we are completely agnostic to all of this. we take what you gave us, record it on the books and send it back to you that process has been around for a very, very long time it only skinnied down to t plus 2 a few years back it was longer. so pushing it to that level was a whole industrywide change. getting it to go instant, that's going to take players from across the market structure, all of the participants, including the dtcs of the world and others to come together and decide it's time for a change. the back end needs to catch up with the front end the technology out there, the ease with which we tell investors and anyone can download an app and invest, download an app, pick a stock, do these different things.

imts unbelievable. it's extremely seamless. that's another area you need to think about. when you look at that back end technology, that's an entire, you know, seismic shift, if you will, for equity securities. >> but you're right. ther there is so much we can do instantaneously in terms of technology surprising in this day and age it takes so long to settle trades it's a lot more complicated than that on the back end carl, thank you so much for joining us. >> thank you for having me after the break we will monitor the deep freeze in texas as we are beginning to get headlines that suggest the light at the end of the tunnel is getting closer we will talk about what it means for those pout power still later, hester pierce on the robinhood hearing and whether or not regulators should step in. s&p trying to hold 3,900 we are back in a moment.

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crude oil is up over 4%. you can see it right there at least over the week, that is, as texas oil producers and refiners remain shut down for a sixth day. tomorrow senior director -- give me a sense in terms of the short-term impact on energy and

the energy complex and whether there is going to be a long-term impact from these events >> well, the short-term impact is really pronounced in terms of lost capacity from refining perspective, which could take a long time to be restored i think we are still not sure how long it will take to get the crude oil production back up and running. that could be a lot shorter. and then also the reduction in lng exports. globally, this will have huge im occasions for prices, for commodities, particularly refined products in the short term in the long term, as we move to deharmonize our economy and reliance on the grid as we all move towards lektryfication, that will cause questions in terms of the resiliency of the grid and how we have enough redundancy so issues like this don't happen again in extreme weather. >> one could only imagine when we have more demand, everyone plugging in their car, not to

mention their phones and their devices, but their car, what that's going to mean how long is short term here? when you talk about the impact on refining, for example, and prices of some of these underlying fuels, how long are we talking >> well, the interesting thing is that this is -- this event is coinciding with the markets and the economies opening up post-covid-19 as the vaccine is now more in place. as we start to think about going into the summer driving season in the u.s., we could be looking at higher gasoline prices now for quite a bit of time as a result of this when we see in terms of this past week that the hate of refining capacity that was taken offline was more than double what we saw in hurricane harvey, and that also took several weeks if not longer to get fully restored after that event. >> the journal journal had a piece yesterday on the saudis, getting more confident in the oil price recovery and opening

the door to reverse some of those cuts later in the year is that pretty much a given, assuming the path of the economic reopening we have been talking about? >> i think that's pretty much a given. i think that the u.s. producer discipline thesis remains intact in so far as oil prices in the u.s. in the high 50s w once you start heading into $6 a barrel territory, that goes out the window and i think saudi knows that we have seen that in the past, that 60 toll is that magic number in the u.s. that incentivizes too much production relative to global demand growth, particularly as the world economy is still a little bit fragile. so i do think that saudi arabia and others will more likely put more production out in the markets in the coming months. >> you mentioned the electric grid and our ability to make it more resilient in the face of

what may be more demand on it. how concerned are you about that and are we in a position to actually start to really do something about it >> well, i hope that the situation in texas serves as a wake-up call for the need to have redundancy and resilience in the grid. there are things in terms of weatherizing the infrastructure. but i think that the key thing is that wehave to look at what we are investing in for the base load demand. the source of supply that powers the grid at all times and then you have the incremental sources for the peak period. we've been over time in texas in particular, has been investing less in nuclear and coal for base load and going more towards renewables so renewables are fine for the other periods of time, but because they are so exposed to the elements, they don't work as well for base demand as we start to think about relying on the grid more for electric vehicles, as you mentioned, david, i think we

have to think about what are the better sources of fuel for base load that don't require as much infrastructure that can rely more on on-site fuel so they are not subject to extreme weather events. >> there has been a lot of talk about the wind turbines in particular, although they haven't been winterized down there. hasn't that been one the issues? it's not like they operate in much colder climates successfully. >> that's true all of the fuel sources here were problematic everything failed because they weren't weatherized. so we can't blame wind or renewable. of course, solar and wind don't perform as well in extreme cold weather, but certainly if all of the associated infrastructure for coal, nuclear, natural gas and wind were weatherized, i think the situation would be less dire than it is that is definitely something to look at. but we also have to see what can function as a base load fuel in

terms of never having a cessation in functioning as a result of circumstances beyond our control. >> understood. tamara, thank you. our "etf spotlight." the spider consumer etf, it's second largest holding, walmart under significant pressure shares falling after they posted earnings below street expectations and warned sales growth could slow in the other year after e-commerce sales sow a 69% spike during the pandemic. shares currently trading down about 5.6% ceo doug mcmillian will join cnbc next hour with courtney reagan on "squawk alley. a big show still ahead don't go anywhere. wereacinwo a bk t you packed a record 1.1 trillion transistors into this chip.

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resurface discussions of taxing

the wealthy. ylan mui has the discussion. >> it boils down to this feeling you can make a lot of money on wall street without having to play by the rules. so one way to address that is to just get better about enforcing the laws that are already on the books. today democratic congressman row kahn is introducing the stop cheaters act to give the irs $100 billion over the next decade to go after big corporations and wealthy individuals. one study estimates about 30% of uncollected tabs revenue is due from the top 1% of earners this new bill would require the irs to audit half of individuals making more than $10 million, a third of those earning between 5 to $10 million, 20% of people earning between 1 to $5 million and almost every corporation with $20 billion in assets in a statement he said, both has been able to act like high rolling gamblers with almost zero consequences for far too long it's time every american pay their fair share

now, this bill is based off a recent proposal by larry summers and others who found beefing up the irs could turn up over a $1 trillion in lost tax revenue the bottom line is that washington is just woefully behind wall street the irs has not been equipped to handle the complex transactions that have underpinned the big gains and loss that is we have seen around gamestop back to you. >> not to be sin company, i remember secretary mnuchin's confirmation hearing where the discussion was addressing the tax gap and trying to improve irs efficiency just like you are describing is this sort of just a political cycle at play, or are they somehow serious this time? >> yeah, so one thing that we're seeing is that there is bipartisan support around providing more funding for the irs. i believe that in the last round of government spending they d is receive more money

we need a lot more money in order to go after some of the most sophisticated players in terms of enforcement staff and also in terms of upgrading their technology what makes this bill sort of unique and this proposal unique is that it doesn't just give the irs more money it puts some strings atafrtachet the dollars so they would have to use the money to go after the big players. so that's what makes this difference we will see whether or not this gamestop mania does provide some of that momentum to get this one over the finish line >> that's great context. ylan mui, thank you for that we will watch it. s.e.c. commissioner hester pierce is going to join us ahead of the robinhood hearing on the hill this afternoon as the dow is now down a full percent don't gowa ay. fteen minutes unt. 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.

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welcome back here is our cnbc covid update. life expectancy in the u.s. dropped by a year as the covid pandemic gained strength last year the cdc says it's the biggest decli decline since world war ii for black americans the toll was even worse the life expectancy dropping by almost three years. for the sixth consecutive day new covid cases in the u.s. 100,000 that's down from the pandemic highs of around 4,000 we were sewineing a month ago. a study indicates that the south african covid variant reduced antibiotic protection from the pfizer/biontech vaccine although the skps say that the shot is still able to to neutralize the virus and two men have been arrested at a south florida resort hotel they are charged with pretending

to be federal marshals to avoid wearing face coverings they allegedly threaten to arrest hotel staffers who asked them to put on a mask. carl, can't make this up back to you. >> rahel, thank you for that. just about less than two hours away from the gamestop hearing on the hill. joining us this morning to talk about some of the issues at play ahead of it is s.e.c. commissioner hester peirce madam commissioner, thank you for your time. great to see you. >> great to be here. >> a lot of suggestions, policy suggestions headed the s.e.c.'s way lately i'm told you are open-minded to many of them can you give us a sense as to how you are thinking about settlement cycles, margin requirements, investor protection, and whether or not you see any of those particularly as low-hanging fruit? >> sure. well, i think as an initial matter it's important to remember that the markets worked extraordinarily well under extreme volatility and high

trading volumes. so that's a positive for the plumbing piece of it we don't want to do anything to make that not work as well we need to be careful no matter what we do a lot of people have been talking about shortening the settlement cycle, and i think there is a lot to argue in favor of that, but we also have to be careful to look at what the cost and benefits are of the move there may be lower hanging fruit in the form of just trying to clean up and make more technologically advanced some of the back end process that goes on once a trade is completed so that may be an intermediate step that we could take. and i think it hasn't been that long since we went to t plus 2, and so we really need to be careful before we move forward with that. on other issues, we are looking at the full range of issues. this is a multi-layered problem

or event i don't know if there are problems there they are looking at it, a lot of different angles. >> the technology, of course, has been in operation for a while now. i wonder how much of these dynamics were already becoming evident or obvious to the s.e.c. basically, how much of a catalyst do you think the gamestop episode has become? >> well, i mean, i think it's a catalyst because you have everyday people talking about settlement cycle the question of how long the settlement cycle should be has been one that people have been talking about for over 20 years. so now when you have everyday people talking about it, it's much more likely to catalyze us to look at it again. but, again, it's a pretty technically daunting task to change the settlement cycle. it's something we would have to do with a lot of deliberation.

>> there is a story in "the wall street journal" this morning citing people familiar with the m matter saying the gamestop frenzy has prompted the search and rescue weigh more short sale transparency can you share any color on that front? what does transparency mean with regard to short sale, you know, disclosure is it individual firms is it just a total short sell as a percentage of float? what types of things might you be looking at here >> well, i should emphasize that i'm speaking for myself and that the chairman sets the agenda i don't know what's on the current chair's agenda or assuming that gensler gets confirmed to be the agenda, what would be on his agenda a lot of people have asked for more transparency around shots i have to sound a note of caution. transpa transparency important it's good to know what the short is but short selling plays a

valuable function in the market. we have to remember that it plays a role in both ferreting out information about companies that might otherwise not come to light, and also allows for hedging so that there can be better liquidity provision so those are things that we have to balance when we think about transparency. >> speaking of transparency, do you think that there is sufficient transparency requirements as to relates to payment for order flow, the various conflicts of interest and so forth that's a subject a lot of people expect to come up as, you know, the discussion today centers on the business model of robinhood and some of the other brokerages who are able to offer commission-free trading by feb effectively selling market flow to other traders to execute those trades. >> there has been a lot of talk about that, and a lot of calls for more transparency. transparency is great and we can look at the rules around that. but again i think commission-free trading has been a net positive for retail

investors. and so we haveto be careful no to try to become merit regulators saying we need to make sure retail investors under when they are not paying a commission, there is going to be some other way that they are paying for the service that they are getting. but i would, you know, i would caution again that we don't want to try to upend a model that seems to be working for retail investors. >> not to put words in your mouth, but it sounds like you think a transaction tax, which is already receiving high-profile pushback especially here in the state of new york, is a suggestion that comes up from time to time, that you don't necessarily view as a win? >> no, i don't i think the research shows that not only does it not tend to meet revenue goals that people set out, but it also can have damaging effects on liquidity.

one of the things that i am most passionate about is that our capital markets work really quite well for investors and for issuers trying to raise capital. so we don't want to do anything to make it harder for people to make markets so that's why i think we, again, need to be cautious around transaction tax approach that's a little bit outside of my bailiwick in terms of who might be imposing the tax. but it will directly affect liquidity in the markets that we regulate. >> commissioner, what's the significance of this taking place before there is a confirmed chairman of the s.e.c. under the new administration does that hamper your effort to get to the bottom of what happened here? >> no. chair lee is, who is running the agency on a temporary basis, is doing a fantastic job and marshaling all of the resources across the agency to look at this issue this is the nature of how these things work. there is a transition period and

the markets keep working in the transition period. so i am not concerned that there will be a smooth hand-off and we are working hard in the meantime >> you mentioned how the gamestop episode has become common discussion among everyday investors. my last question would be, going into the hearing, i am sure there is likelied public is going to hear statements or questions that are unnerving or are disturbing what do you want retail investors to think coming out of today's events >> well, i think it's important for us to remind retail investors that the markets are there for them to participate in, and that we do encourage participation, and, of course, they need to do it with a skeptical mind, ask lots of questions and be careful when there are run ups in securities like the ones we saw

a lot of people participated and are joining the markets now who didn't previously do so, and that's a good thing. weigh in on market structure issues we love to hear from everyone. but also participate in the markets so that you can pass on a nest egg to the next generation >> that's the point. of course, you have a lot of suggestions, as we said, being funneled your way. madam commissioner, thank you for the time great setup going into the hearing. hester peirce. right now, all three major indexes in the red the nasdaq, the big laggard down 1.5%, 200 points and then later today do not miss an exclusive interview with treasury secretary janet yellen at 4:00 p.m. eastern her first interview on cnbc since joining the biden administration lots to talk about there ghbahetrt"ilbeee wl rit ck

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get help with expenses health insurance doesn't cover. go aflac! !mm-hm! get to know us at aflac.com. snoop let's go to the c medical examiner me now. thank you. yes, when we think treasuries, right now everybody is on the same page. how high can yields go are they going to continue to go pretty much straight up? it's been a rather aggressive move, especially if you try to think about the move in percentage terms, which i never recommend, but let's go to the charts, shall we this is a ten-year note chart starting in march. we all know that we had a lot of volatility and we came way down, but the point of this is, where can we go and where will it sop? i think right off the bat this is huge from mid-march at 119. my guess is, is that if we see any type of significant correction, this is the level

that most likely will hold you don't want to hold it to the exact basis point, more like a zone, but it's very significant that you remember that we always come to retest, especially these single spikes. now let's take a wider view, shall we 2012, 2016 both in july, these are the most significant points if you are a technician looking at treasuries, especially the ten-year sector. the bottoms or the all-time lows, double bottoms, and we started to come down once covid hit. so the reality is now that we're trading where we are in the high interday, high 133, high close 131, what we really want to pay attention to is once we get into these zones, what do you do next if you are a trader? many traders will be looking to taking some profits, especially if they have been short with the breakouts that we have had, collecting some money on the selloff, but in bigger terms taking profits there just means that you have to reset resetting, once again, means

probably look for the pullback as we pointed out around 119 let's go longer, shall we, to the 30-year bond this goes back to october of '19 and there was some really significant elements here. the 2% level you know, when i see these big round levels, they are psychologically important. many technicians and investors like to gravitate to them. 1.5, 1.25, 1.75, all-time low, half a percent, 0.5. round numbers. so as we see 30-year levels, which, of course, currently are trading well above at 208, once they come down like the ten-year 119 probably what you are going to do is these are the levels you want to hold and it gives you a double edge sword because not only would you want to hold these you want to put some protection should you start trading significantly below this level in 30s or 119 level in 10s finally, how are we supposed to

use the charts, many ask me when they see me walking around the cities all the central banks, why would these charts work? these aren't real rates anymore. 120 billion a month. how many billions more did they buy in the finning beginning. covid process, the federal reserve? i am questioning how it alters the charts my answer is always the same it's human behavior. and we will incorporate all of those thumbs on the scale, but we still behave in rather predictable ways as humans and it's relatively, it repeats itself my famous thing i do and my kid always like this, any time you croc knock on a door, knock three times. fibonacci numbers. things always work no matter how convoluted keep using the charts and ret retracements technicals work. carl, back to you. >> knock three times, as tony

orlando said, rick rick santelli, thank you as infrastructure and, more importantly, rates are in focus, take a look at some of the selloff in clean energy names. two of the funds that track those names, invesco solar etf, ishares around 5, 7% sun power, plug among the lag guards in that group off of the initial opening lows. "squawk on the street" is back in a minute. this is how you become the best! [music: “you're the best” by joe esposito] [music: “you're the best” by joe esposito] [triumphantly yells] [ding] don't get mad. get e*trade and take charge of your finances today.

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shares of spac announced it will take quantum si public. joining us now is the founder and chairman of quantum si, jonathan rothberg. it's great to have you back. jonathan prodionics is what we're talking about. you make significant claims to talk about your company and its overview saying your semiconductor chip has the power to decode the molecules of life and expand the scale of genomics and dna sequencing explain to our viewers what that means.

>> david, i've been lucky enough to have been at the start of genomics where we made the first machines that decoded dna rapidly and we decoded jim watson's genome and neanderthal again only, the acgt letters that are the molecules of life on a chip. and so i thought it was fitting that i would bring the band back together and my team would code instead of dna which tells you what may happen in your life and instead would decode proteins which tells you what is happening and we would take the same approach. as you know, david, after i put dna sequencing on a chip at ion

i put an ultrasound on a chip. so i was very familiar with the advantages of semiconductors and so i put together a team this time to decode the 20 letters made in proteins so the diagnostic world is mostly proteins. we do dna sequences because it's hard or impossible to do sequencing in a convenient way >> this is tending towards, again, moving towards more personalized medicine, i guess who do you eventually sell your product to i know you are a ways from commercialization but the product you are going to be encapsulating all this technology in, will that be sold to large labs? >> it is, david, the same people we sold ion to so we've sold to the same customers at least lee times before

now a solution in a digital format for something that was analog traditionally protein diagnostics had been with antibodies and now just like dna digitized cancer diagnostics, the next generation of immuno dyiagnostis will be based on getting more protein information in a digital format so you can apply artificial intelligence, deep learning, and make correlations. our first customers are research labs and then those research labs will create content that will allow them to do diagnostics first, so it goes research, create content to diagnostics. and we like that because we did that playbook at ion where we

gave machines to people to do research into cancer and then it became the standard of care. now we're going back to those researchers, giving them machines and when they want to study, for example, what happens to the immune system in long covid? huge problem now our quantum si machine to understand that problem. they'll identify markers that will allow people to follow the progression of the disease, treat the disease, understand the disease, and other groups will create diagnostics based on that knowledge so we've done this playbook before i've put it on the chip playbook three times before and we've done the research tool playbook twice before >> jonathan, unfortunately, we're running short on time, but i did want to ask you, i mean, the last time you joined us was

when butterfly announced its deal to merge as well. with a spac long view that is now de-spac-ed somebody who comes up with these concepts and companies, what would you have done otherwise? would these have become butterfly networks which already isn't a commercial product, has a commercial product and this one which is still far from a commercial product >> that's a great question and during our process i met people like kathy wood who is in a fund being advised by arc invest. and the diligence they did was all about the future and all about a digital future of diagnostics. so i would tell you it's not just spacs that are changing things, it's the sophistication of the investors

so our pipe investors understood prodiomics i didn't have to give them a lecture. i would say it's a combination of the spac being there after we've worked and spent $200 million to make a semiconductor that seized the molecules of life and then an educated investor base that normally invests in public companies that know this is the future. artificial intelligence, diagnostics on proteins. >> jonathan, always appreciate having you and so far so good on this whole trend you're discussing and the deals that you've done. jonathan rothberg, just look him up the guy has done it all. thank you for joining us that's it for us don't go anywhere. big hour ahead walmart ceo doug mcmillon will join and the robinhood hearing as the house financial services committee will join "squk

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