one stock that seems to be defying gravity, ccib churchill capital is a blank check company. there is another report that loosen motors will go public via merger with ccib it is pushing it up even more, it is up 500% this year. wow. thank for watching "power lunch," everybody. "closing bell" starts right now. thank you, melissa and tyler, and welcome, everyone, to "closing bell," i'm sara eisen here with wilfred frost. the action is in the nasdaq today. of a 1.4%. s&p is lower dow is higher. real divergence. let's look at what's driving the action one hour left in trade the rise in bond yields continues to put pressure on stocks focus now turning to central banks and their response we are seeing the drama play out in high-tech growth names. fangs lower, apple and tesla down 5% apiece travel stocks like reopening plays, financials, energy screaming higher

american airlines and royal caribbean up wilfred, 59 minutes left of trade. >> 59 minutes left, as you said with the dow up, but the rest down sharply let's have a look at what's coming up on today's show. starboard spac seals a deal. we will speak with jeff smit and manny medina about starboard's deal to take the data company company. plus spotify laying out its vision for the future of audio in an event called stream on saying it is just the early innings. the ceo will join to us talk about the plan to grow content and users. first, mike santoli is tracking the volatile session we have on our hands. and joining us to talk about the latest setback for boeing is sheila kai lieu. mike santoli, let's start with you. >> it is about money shuttling from one part of the market to another. it has been the continuing story

for the last week or so. treasury yields kind of halted their rise but are holding at those levels it is actually hurting the big growth stocks yet again. it is all netting out to kind of a low drama story when it comes so far to the s&p 500. today's low was below last week's low, so it seems as if maybe there is wear and tear because those mega cap companies atop the s&p also the same leaders in the nasdaq so that is a little bit of a friction but you have so many gains in banks, in travel stocks, in anything reopening related, that it is actually taking up the difference look related to the bond move. the reflation trade is completely encompassing this market right now this is the market imemployed inflation expect'ses over the next ten years it is not a solid forecast, but it is where the market is leaning. we are above 2% right here as it has gone up, stocks have gone up. when the fed has said it's not going to get in the way of a reflation move and of a growth

story then the market likes when we are in a reflationary zone when you are back in 2018 or so, that was different radio now the fed said until you get up here and stay up here for a while the fed is not going to raise rates. that is sort of in sync with the move in the market another reflection of that, banks versus mega cap growth this is a relative chart it is basically the. approximatance of the kbw against the vanguard cap growth. just this really kind of rounded bottoming process that went on now where it was in early june, the early reopening enthusiasm spike we got now you can lock at this and say well that looks vertical, overheated, maybe we could expect switchbacks but on a multiple year basis banks have vastly underperformed so there is more room. >> i think there is more focus on fed chair jay powell

testifying tomorrow. what are exceptors expecting, and how are they prepared for powell's comments. >> my guess is nobody expects powell to change his message the message has been he doesn't water about the possibility of an overheating phase in the economy. he doesn't worry about the effect that new fiscal stimulus might have on that until we get a tight labor market we are not going worry about it some of the nuances in the answers, what are they thinking about asset purchases, $125 billion a month. what's it doing? what was it meant to do? how long will it continue? i think that's where some of the focus is he is going to try the say, look, same story i have been saying for months but i think the market is going to listen for any idea that maybe the market itself has colored his thinking more. >> mike, thanks much shares of boeing recovering some earlier losses following two separate incidents of engine failure in den strer and the netherlands over the weekend

the united airlines 777 and -- another sparked investigations after the engines caught fire and dropped debris over the areas below. joining us know an analyst who covers boeing. to what extent is your price target you are thinking on the stock influenced by the events of the weekend or is it purely an engine issue and it is not related to boeing? >> thanks for having me. it is primarily a engine issue boeing hasn't delivered a pw power of the 77 engine since 2017 that was the last delivered aircraft with that type. to give you an idea this is reminiscent of the 737 max headlines. if you 777 is worth about $3 to boeing shares. the 737 max is worth $65 and the other major aircraft

boeing produce is worth 37 to $40 per share. the 777, given the magnitude of the production is pretty limited, is not worth a significant lead to boeing shares. >> still, what about the headlines, sheila? another safety scare for boeing. ultimately, is it taking a toll on boeing's reputation, which before all this was pristine >> sure. let's put it into perspective. there is about 128 77s, powered by pws the average age of aircraft at retirement is 23 years old these aircraft are entering retirement nine operators operate them. united is the most exposed it has a significant portion of the fleet. so the pw-powered 777s only comprise about 8% of the total 777 fleet. so they're a small majority.

again they are quite old it's not that it is beyond boeing's extension it could even be beyond the engine manufacturer's extension, which is raytheon technologies because they might be out of service contracts already. again i would point out the average age of these aircraft is around 20 years old. so they are quite significantly used already. >> sheila, as you said, it is sort of reminiscent of the issues of 737 max though as you are point outig these planes are a little older and boeing is not manufacturing them with these nmgs anymore that said -- engines anymore that said, every day before a plane takes off who is responsible for the final check to make sure it is ready to go is it the airlines the engine maker boeing who takes responsibility for failing to do significant checks with these two flights over the weekend? >> it is the airlines. and there is maintenance agreements that come into when you purchase an aircraft the maintenance agreement could be with the oem like boeing or with the engine manufacturers.

the engines tend to be in long term service agreements with the engine manufacturer, which in this case would be pratt and whitney. each that, engine contracts last about six, 12, 18 years. so it's unclear as to whether where this engine was in its guarantee manufacturing process service contract to begin with >> sheila, thank you for joining us for perspective there boeing shares down 8%. after the break, sounds like a plan we will talk to the cfo of spotify for the company's vision of the future of audio it is planning to grow the future around the globe. how batman fits into the mix and bruce springsteen as women you are watching "closing bell" on cnbc.

wondering what actually goes into your multivitamin? at new chapter, its' innovation, organic ingredients, and fermentation. fermentation? yes. formulated to help you body really truly absorb the natural goodness. new chapter. wellness, well done. here's aj! when are you going back into the office? i don't know dad... ♪ well we have a safety net. we'll be ok right? ♪ the world around you may seem like an immovable, implacable place. it is not. it can be bright. quiet. and safe. it's a change that will be felt from this street. to this street. to no street. and everywhere in between. all it takes is the slightest push

in just the right place and that will be the tipping point that changes everything. ♪ ♪

shares of spotify rallying on the back of big announcements from its stream on event earlier today. including expanding to 85 new markets, unveiling exclusive content deals with warner brothers and dc comics,

launching spotify high phi, which allows users to upgrade the sound quality. plus spotify audience and network advertising. the cfo joins us now, thank you for joining us >> thanks for having me. wanted to start if i may on this deal with warners and doing scripted content how much of that is really genuinely new? because, clearly there is a lot of audio content, some of which is scripted out there at the moment what is the sort of new aspect of this? >> yeah, i think if you take a step back and say -- i mean, for us, it's really about creative expression and allowing as many creative artists to share their talent and share their work on spotify. what we have talked about is our mission statement is to have over a million creators connecting with over a billion consumers globally that's what we are focused on. for us, it's all types of different content, all different types of audio our goal is to be the number one

streaming audio player globally. for us it means continuing to add exclusive originals and differentiated content on the platform so scripted content is one news, sports obviously we have made acquisitions already we have got licensing deals with some other people. for us it is just really about having the most differentiated and unique content we can have on the platform that gets creators' work out there and connects with they are consumers. >> when it comes to the dc comics deal, i mean on one level you can think of the story to tell there on another level you think of christopher nolan's batman movies and they are very visual shows. they are not audio based how will you balance those two competing factors out. >> look, i think audio is a unique medium. i think there are different ways you can he is press things in audio that you can't in visual for instance, i think we talked about in the batman example being able to hear batman's inner thoughts and inner monologue.

those types of things will be unique and differentiated. being able to take stories in different directs where they haven't already gone we are super excited about being able to have all sorts of differentiated and new content on the platform. >> i wanted to focus on the podcast news obviously with president biden and bruce springsteen which is getting a lot of attention you are clearly spending a fortune on content and podcasts. how are you monetizing it? >> i wouldn't say a fortune. we are trying to be thoughtful and strategic about what we are spending on content. the content spend is about driving engagement on our platform, driving new users, exposing new and unique content to new and unique users. we decided about a year ago that adding podcasts on the platform -- we thought there was relation between the pot cast

growth and the user growth we wanted to make it actual and actually drive increased retention, increased engagen in and driving higher lifetime value. what we believe we are able to prove is by having this differentiated content we are improving and increasing lifetime value for each consumer that -- user or subscriber that yoins our platform so we feel really good about the investment we have made. we have said a number of times on earnings calls that if you continue to see us continue to invest aggressively in this area it is because we are seeing results in engagement and reduced churn. >> is there any part of you that worries we might number a short-term bubble in terms of value of audio rights, whether music or audio or podcasts or scripted content it is not just the podcasts, but certainly all sorts of musicians

are selling their back catalogs and music rights for rich valuations do you concern we are in a short-term bubble at all >> i think audio has been undermonetized relative to video for a long period of time. video is 10x the size of audio digital audio is now being consumed each day as much as video. we think there is a huge opportunity for audio to continue to grow and expand. we think there are new and exciting ways, whether it is music, podcasts or other areas we think both the ability to grow audio and monetize it at higher rates is still out there. it is not for me to discuss all transactions that have taken place but we feel good about the deals we have signed and the acquisitions we made and we feel good about the opportunities for audio and growth over the next five or ten years in the audio space. >> you have clearly seen a lot of growth, paul, just in the last year as a result of people staying at home. it has been a stay-at-home

winter with people streaming what happens when they are not cooped up in their homes and we are getting vaccinated and they go out what happens to growth in audio streaming? >> that's a great question i think, you know one of the things that we have talked about is we have seen a massive change in consumption habits and behavior over the last year. so you know with people not commuting w people not traveling we have seen obviously a lot more consumption in home, in smart speakers game consoles have been a huge driver for us. does that continue does it shift? i think we will have to see. i think we will definitely -- the timing of when things open up we all hope thing open up and get better and vaccine rollout happens quickly so people can get on with their lives. i think we generally believe that audio is a tremendous growth area. if people are traveling again, going away, commuting for work, it is going to be strong for us of the it may mean shifts in when and how people consume. we have all this data and it

comes in to us in real time. as we see consumer behavior shift we are able to adjust the product and opportunity right along with niit. >> what do you see as your differentiating factor, is it the exclusive deal you have with content providers or is it what launched you guys which was the algorithm and how you could stream stuff for free and always get a good recommendation of what the user wanted to hear next. >> i think we are a focus that's just focused on audio. it is the thing we live and breathe every day. our focus is on being the largest global streaming audio player out there that's number one. i would highlight what you said. our alg ritic -- we led with that it is what made our music differentiated having play lists and a discovery tool so people discover more and unique music has been great we are going to bring that same technology to podcasts so they

discover podcasts and audio content in general in new and unique ways. just in general, being focus on the market where we think we are just differentiated by the amount of data we get. we are very, very confident that actually relative to other players, we receive five to ten x the amount of data that they have being able to analyze that data and be able to use it in order to continue to improve the product is something we will focus on it has been a driving fact neuro our second quarter cess. >> paul vogel, thank you for joining us. >> thanks. we have a news alert on the movie theater industry julia boorstin has it. >> movie theater stocks are shooting higher right now. news from governor cuomo that new york movie theaters will be able to reopen at 25% capacity with no more than 50 people per screen effective march 15th.

amc entertainment shares up 15%. cinemark up 9% and i-max shares up 4 over new york along with los angeles, those are the two largest movie markets. the fact that they haven't been able to open their theaters is nearly a year is a factor discouraging studios from releasing new films. >> big news as a consumer. >> good news for wilfred, who like going to theaters a lot. we have got just about 40 minutes left to go before the bell lock at the market the dow is higher. the nasdaq is getting pummelled. a big split there as tech gets beaten down. up next, former ge ceo jeff immelt speaking up about the time during his company. saying he is wholly unhappy with his team during his tenure at the helm the most searched tickers on cnbc.com

tesla up there, seeing a pullback today and some losses last week. despite new research saying the company made about $1 billion in paper profit so far its bitcoin bet. boeing also up there trend together highest level of the year we'll be right back. tasha, did you know geico could save you hundreds

on car insurance and a whole lot more? hmm. so what are you waiting for? hip hop group tag team to help you plan dessert? ♪ french vanilla! rocky road! ♪ ♪ chocolate, peanut butter, cookie dough! ♪ ♪ scoop! there it is! ♪ ♪ scoop! there it is! ♪ ♪ scoop! there it is! ♪ ♪ scoop! there it is! scoop! ♪ ♪ shaka-laka! shaka-laka! ♪ ♪ shaka-laka! shaka! scoop!. ♪ ♪ choco-laka! choco-laka!...♪ geico. switch today and see all the ways you could save. ♪ sprinkles! ♪

36 minutes left of trading former ge ceo jeff immelt is speaking bout his time at the helm of the company and how the world perceives his track record

navigating everything from the post september environment to the financial crisis david faber spoke with immelt earlier and joins us now with more from the interview. >> when you talk track record people can't help but look at the performance of the stock price that does not tell the whole story. we all know there is so much more but that is in fact where a lot of people sort of stop and they say, well, it didn't really work out, did it? you know this. at 30 rock i made this point to mr. immelt i would get stopped by longtime employees of the company and they say what do i do i had a stock worth 40, $50 a share that i believed would be there as a bedrock for my retirement with an important dividend and now it is 11, 10, $8 a share. it is heart breaking i did ask mr. immelt to respond to those kinds of stories when he hears them. >> i think about the company every day. i say in the book i know some feel like i let them down.

every day i will think about that again, i just want people to know that we didn't get it all right, but the team always tried our best to build a great company. and that's -- that's all i can say. i understand and it weighs on me. and i think about it but i also want to say that there wasn't one thing i could think of to try harder for the company and for the people >> you did buy back a lot of stock. $108 billion on buybacks from 2004 to 2017 was that money well spent? >> again, the times we did it, we thought about it in great specificity. we talked about it as a board. we viewed it against other alternatives for the capital and it was done with great discipline and process right? it wasn't like it was done by people in a dark room. it was done with full transparency and with the notion of how do we -- how do we both invest in the company, which i

never shirked from, do the acquisitions i felt like could position us, and generate the right returns for investors. and that's what we did >> yeah. a lot of money of course from the disposition of ge capital assets, sir, did go into that buyback, and many would have happened it had just stayed on the balance sheet to deal with unexpected and enormous losses related to long term care policies that never did get sold >> yeah, just one of the issues there. david, how much of this can be blamed on external factors the macro economic environment which we were highly sensitive to some of the changes in automation and globalization, which they got caught up in and how much is really on him if. >> that's the question, isn't it there is no doubt -- he is ais this many times, he was to the particularly lucky he did not have the tail wind that jack welsh did for the 20

years he ran the company with the stock price always increasing in value, very significantly. he did face 9/11 on his second day. he did deal with a financial crisis that hobbled ge capital and almost brought the company to bankruptcy, frankly and kbloblization and so many other things but he did also sara run the company for over 16 years. and there are those who say that the company itself was not operating nearly as well as it could have, that the purchases that he made oftentimes at too high a price and the sales that he made, oftentimes at too low a price added up and helped diminish the amount of cash that the company was producing. and there are those who will simply point to what they believe at least was a company that wasn't functioning as well as it could have these are all things i discussed with mr. immelt. he says he is his biggest critic. >> the timing of the purchase and sale of ge capital a great

example of not nailing the timing in the best possible day. david we are out of time i look forward to watching that interview in full. >> it is on.com right now is this already on.com. >> yeah. >> after the break, a new report seines instacart could be looking into robotic warehouses to fulfill orders. that could be bad news for its grocery partners we will tell why. a check on the bonds they continue their surge higher paused this afternoon. but the ten-year up at 1.37. the 30-year, 2.19. we are back in a couple of minutes. labradoodles, cronuts, skorts. (it's a skirt... and shorts) the world loves a hybrid. so do businesses. so, today they're going hybrid with ibm. a hybrid cloud approach lets them use watson ai

to modernize without rebuilding, and bring all their partners and customers together in one place. that's why businesses from retail to banking are going with a smarter hybrid cloud using the tools, platform and expertise of ibm. ♪♪ hey you, yeah you. i opened a sofi money account and it was the first time that i realized i could be earning interest back on my money. i just discovered sofi, and i'm an investor with a diversified portfolio.

who am i?! i refinanced my student loans with sofi because of their low interest rates. thanks sofi for helping us get our money right. ♪♪

down more than 2% now on the nasdaq, near session lows with with half an hour left of trading. instacart could soon be using robots in warehouses which could put pressure on its grocery partners >> it could use the technology to pressure partners it could also use it to help

them further modernize for the new era of grocery delivery we are living in. greshry chains hope it is the latter for years, instacart has been collecting mountains of valuable data on shopping habits, inventory, website traffic and more that would make it a formidable competitor. however, instacart long said it would never directly compete with its retail partners a point that the ceo reiterated ea to me earlier this year and said their business model is predicated on being a chief ally to partners. does instacart even want to be in that space with the low margins. it has been busy building up enterprise and advertising businesses which are higher margin it may be enough for the company at least for now as it looks toward an ipo. >> you are getting at my question in all of this, which is are we saying that instacart

is exploring in these robotic warehouses actually going direct to the consumer packaged goods companies and buying their own groceries and becoming like an amazon or that the grocery stores would help stock their warehouses and therefore it wouldn't be lost business or we just don't know? >> that's the key question the short answer, is we don't know you have to wonder if grocery stores as they currently run are equipped to have robots operating within them if they have warehouse space whether robots could operate instacart's technology is more advanced they are helping modernize the brick and mortar grocery space the fear i think for the partners is that they go do it on their own kind of like amazon has been doing it. >> time for a cnbc news update with

with re held solomon. let's start in new jersey where the govern signed lgs allowing legal marketplace for recreational marijuana the bill also allows penalties for underage possession for drugs and alcohol that have been mostly used against people of color. former president trump is slamming the supreme court for allowing what he calls a quote fishing expedition into his tax returns. he says that attempts by democrats to prosecute him are akin to fascism. trump also repeated his baseless claim that he won the election. in texas long lines of cars waiting for free food and water as residents continue to grabwell the effects of the deadly winter storm. one food pantry had more than 4,000 people sign up for today's giveaway. off the coast of texas, thousands of turtles are getting put back in the water. en they were rescued last week after the rippid freeze left

them, quote, cold stunned essentially unable to move or breathe. find out about the remarkable efforts to collect and warm up the turtles. tune into the news with shepard smith airing tonight at 7:00 p.m. eastern >> thank you. we have got 26 minutes left to go before the bell. here's where we stand. an odd picture shaping up on wall street. the dow is up 100. the nasdaq is falling 2% you are seeing groups like energy and financials higher while big tech gets hit hard down 2.25% on the nasdaq the russell 2000 index of small caps caught in between so is the s&p 500. transports also an exception higher today. up next, tobias lev kovic outlines three sectors position pores big gains. bitcoin under pressure after hitting a record over the weekend. we will discuss what is motivating some investors to get at cinupn.ir positio th'somg

[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. your doctor gives you a prescription you could use free 1-to-2 day delivery from cvs... but aren't you glad you can also just swing by to pick it up, and get your questions answered. that's healthier made easier. from cvs.

tech stocks are getting slammed right now here into close. the nasdaq is down more than 2%. we are looking at a three-week low, down 2.3%

joining us, tobias lev kovic do you see this as the start of a longer and bigger correction in the tech market >> we have seen tech underperforming for example, small caps, since roughly i am going to say september, october when we started seeing bond yields going up. i think this most recent push on yields moving higher is making people rethink the tech exposure, long duration with tech and big growth tends to get adjusted down when you look at future stream of earnings or cash flow. so it is not that surprising >> do you think the rest of the market can hold up with tech having this valuation correction >> sara, that's a key point. you have heard me describe the market as kind the dog sled being pulled by the big huskies, mega cap tech. if you start taking out and switching out the mega cap tech names what you tend to have is it is being replaced if you like with poodles and cocker spaniels

and chihuahuas and it is harder to pull the market and this act as kind of an anchor dragging it down it is less about the index level, it is more about the rotation trade that's been going on for a while from growth to value. >> what about overall the risks of a major pullback in the market since the cher we have 3 or 4% pullbacks. what are the chances of more like a 10% to 20% pullback. >> a think the 5 to 6% pullback are pretty high. we are seeing levels we have seen exceed those of the 2006 tech level era the fed was not raising rates. by the time the market started to crumble in march of 2000 you had 15 months of rate inese kroos. we don't have a man with a

plan.com crazy valuations in the s&p 500. you have a few stocks here and there this really look outlandish, but for the s&p i don't have all you have got these big mega cap tech names but they have large dominant market position and large cash flow it is not the story of just over 20 years ago. >> where do you want to be then when the market as you say will resume this uptrend? what sectors >> we continue to believe you want to be in more the cyclical airs of the market, the stuff that was kind of left behind with covid as the economy retrenched what investors did was run to safety if you like in these big cap tech names that had balance sheet, cash flow and could grow in a period where the general economy couldn't because they could take away share as disruptors from incumbents as the economy opens, as we start to see vaccines and herd immunity and those kinds of things evolve then it is going to be the areas that were left

behind they are starting the come back. energy, metals, even financials tied to higher bond yields coming back. but there is more in there. >> to what extent do you think the dollar will continue the weaken in it paused for a bit but then it continued the slide. and how much exposure for the rest of the year >> if the dollar weakens it boosts commodities but there is also an interesting back and forth in the market right now. i think it was consensus the dollar would weaken further. as bond yields creep up is it going to hold up the dollar, is it going to attract more money to the u.s. as they fun from foreigners who are getting negative yields in their own markets? this dollar issue might not be as clear-cut as it was probably

a month or two ago we are starting to hear from investors, that kind of commentary that maybe the dollar doesn't weaken as much as perceived. >> thank you for joining us. >> take care. straight ahead, kohl's targeted by activist researchers. a reminder watch or listen to us live or on the go on the cnbc app we are back after this

when you've got a business, you don't want to worry about slow internet or confusing cybersecurity. so get comcast business internet with fast, reliable speeds, and add the advanced security of comcast business securityedge. it combines the speed you need with threat protection. plus there's 24/7 support. it's internet and advanced security - made simple. so bounce forward - with comcast business.

get started with a powerful internet and voice solution for just $64.90 a month. and ask how to add comcast business securityedge. call today. ♪ ♪ (kids talking) pnc bank believes that if an app can help you track your pizza... come on cody, where are you buddy? ...then your bank should have the technology to help you track your spending. virtual wallet® was designed to change what people expect from their bank. easily see what's free to spend... ...and where you can save, so you can budget even better. ok, he's gotta be close. six blocks in the other direction.

make a left, make a left, make a left! he made a right again. virtual wallet® for digital banking. one way we're helping to make a difference at pnc bank. hey, dad! hey, son! no dad, it's a video call. you got to move the phone in front of you like..like it's a mirror, dad. you know? alright, okay. how's that? is that how you hold a mirror? [ding] power e*trade gives you an award-winning mobile app with powerful, easy-to-use tools and interactive charts to give you an edge, 24/7 support when you need it the most and $0 commissions for online u.s. listed stocks. don't get mad. get e*trade and start trading today. >> announcer: the "market zone" is sponsored by etrade trade commission-free today with no account minimums. 13 minutes left in the trading day. we are now in the "closing bell" "market zone." commercial-free coverage of all

the action going into the close. cnbc senior markets commentator, mike santoli, is here to break down these crucial moments of the trading day. and today, we've got allied chief investment strategist lindsey bell with us let's kick thing off with the broader markets. the dow is higher and the s&p 500 and nasdaq are in the red. mike santoli to you first. just in the last 20 minutes we have actually hit two new intraday highs and lows. the dow, a high. the nasdaq, a low. which sums up the intraday performance quite well. >> yeah, it is a jagged rotation happening within the markets the mega caps that drive the nasdaq really having a rather messy elloff it is getting disorderly in things like an schedule tesla. and yes, you have that bid -- really a tenacious bid in the market every morning selloff has of the least been met with buying in the old economy stocks and the reopening trade. all that stuff is easy to

observe. i think the bigger question is does it knock loose anything along the way? does it destabilize the market is this because you had a lot of preconditions in this for a pull back very low short interest. crowded positions. goldman sachs reminded us in a lot of the big growth stocks still. and hedge funds still with relatively stretched equity exposures. all of those things have been in the mix for a while now. the question is did thing get too erratic with the selling from big cap growth. by the way, the equal weighted s&p is up on the day. >> which is interesting. lindsey, you have also got increasing signs that the reopening is starting to happen, the falling, plummeting covid-19 case counts. the op ed from the johns hopkins doctor about herd immunity by april. >> it is definitely a difficult

call i think it is something investors are grappling with, the fact we are seeing a reopening, we are going to get more stimulus, earnings season was great. then on the other side of it there was a concern of rising interest rates and higher commodity prices that could be a sign of inflation to come in the months ahead so i think when you really look at the action that you have seen over the last six, maybe even eight months, yes, you do see high growth tech names get hit when interest rates rise or the reopening trade story becomes more favorable but on days like today, you do see that cyclical value oriented sectors can pick up the market and over the longer -- over a period of several months, you have seen the s&p 500 kind of trade sideways so overall, the rotation between different sectors has really worked out for investors and if you are a stock picker on the right side of the trade, you could also do well >> let's hit shares of kohl's.

we were rallying today after a group of activist investors is taking on that retailer. leslie picker with the details. >>ert that a decent pop today for what that group of activists calls a chronically underperforming stock price. the group is composed and mccallum, and cora legion and 2010, which represent 9.5% of kohl's they are looking to shake up the board revealing nine nominees today. they are also urging kohl's to treatment line inventory and urging them to sell non-core real estate. kohl's said in a statement it rejects the quote investor group's attempt to seize control of the board and disrupt its momentum guys >> so, leslie, as one who has talked to michelle gas before of kohl's, this is not a bedding bath and beyond situation which these activist did have some

success in and they have got a track record when it comes to helping that retailer. that was a struggling case kohl's has had interesting ideas that earned it a number of upgrades, which the company itself point to, including selfora in the stores. the partnership with amazon. the fact it is not in malls and a lot of analysts say it is primed to capture a lot of market share in malls. how tough of an activist battle is this going to be to take on given the fact she has generally been liked by the wall street community from what i have read? >> you bring up a great point. but three of these activists took on bed, bath, and bound in 2019 vastly different companies similar playbook especially with regard to the promotion activity, marketing, inventory, getting all of that back in shape. also improving the board the activists point out there isn't anyone on the board with a retail ceo they went on that same line with bed bath and beyond.

this is not necessarily a struggling retailer if you look at their stock price this is a company that doubled part of that has been a been fit from overall pandemic-related plays the retail sector as a whole. scott wapner asked mcclal uppist why would you go after this company if it has performed so well he described it as more of a relative value play. it has done well, especially recently but prior to that it struggled, lagged. then the fact they are looking in this post pandemic world and how it relates to other retailers in the same space and performance. he says it has been lagging them. >> leslie, thanks. travel stocks, meanwhile are taking off today seema mody has the details of that sector for news a vaccine is already translating into future bookings. royal caribbean is seeing increasing demand from customers 65 and older as it aims to get

back the sea in may. as part of the reopening trade the airlines are getting a lift, led by delta, up 4.6%. within hospitality, a pair of upgrades and analysts labeling marriott the best value play within lodging and following commentary from expedia about vacation rentals. aloop capital says when airbnb reports earnings this thursday all signs point to a quote blowout. airbnb is sitting out in today's rally we are seeing in travel but it is higher by 190% since going public >> i will pick it up there lindsey bell, do you think this sector still looks cheap has it rallied and bounced too much off the lows? >> the hotels? i think when i look at the cruise line and the hotels, and the airlines, they are all telling a little bit of a different story.

they are all kind of expensive when you look at the airlines in particular, they are still, if you look at the jets etf, it is still off 17% from its prepandemic levels you know, while on a valuation telephone they are expensive, i think there is still opportunity, though, for investors to price in an earnings rebound and a deleveraging of their balance sheets and i do think -- especially when i think about the airlines versus the cruise lines, they might be able to get back to recovery levels a little bit sooner just because the restrictions are a little bit less complicated for people to travel at least domestically via airplane rather than cruiseline so i kind of lean that way, i would say. but there is definitely opportunity still, among all of these reopening plays out there. >> if you look at the valuations, mike, for airline stocks, how factor in something like business travel, which is not set to rebound as quickly or potentially as completely as

leisure travel >> yeah, it seems like it is going to be a longer road back for that reason. and you really -- i really would caution people don't just look at the stock prices or the charts, because you have to say, how many more shares were issued during this period to raise capital? how much more debt is on the balance sheet? and i think, honestly, a lot of this sector is already pricing in a massive boom. nothing says you have to go back to the precovid share price levels because that was some kind of a ceiling. the overall market is up 15% since then i guess there is room in there but a lot of these front loaded a lot of the recovery story. >> we have got to talk bitcoin pulling back today from a record high kate rooney here to explain why. >> sara, we have got a few things weighing on bitcoin today. we had janet yellen sounding the alarm about earlier. elon musk saying the prices seemed high after bitcoin hit

$57,000 and new data showing weakening demand from the larger investors who have been cited as a big reason for binn's recent rally. according to chain analysis, investors holding $15 million or more of bitcoin reduced their holdings signature conditionally during the week of february 8th. that was right when bitcoin first topped $50,000 it was the biggest reduction by that group since late last year but it has been balanced in an uptick in new retail demand on exchanges. guys back to you. >> lindsey, how closely are you watching bitcoin these days? >> i mean, it is hard to avoid bitcoin, for sure. but you for example i think it is a volatile asset class. all you have to do is look at the chart of it. i think it has come a long way for being a ways and means for i will licit transactions where it is being used much more as a

form of payment and being accepted by different retailers and there is being financial structure built in the retail system to accept that. but that doesn't mean it is not being used for illicit transactions anymore i think the actions you are seeing today is perhaps some of the big guys are taking profits after a very fast run and the retail investors remain intrigued by it. i think we are in early innings of the bitcoin story and crypto in general and it is something we will keep our eye on. >> bitcoin has been down 6% most of the session steady around that level tesla, which we often link with bitcoin rightly or wrongly in terms of behavior has steadily sold off throughout the session. particularly in the last hour or so it is now down 9% on the session. i guess classic stock in the eye of the storm of rising rates is that it or other factors? >> i don't know if it is specifically rising rates but

that was part of the reason why the big secular stocks did break. a lot of the reasons that got tesla up to $900 a share was the incest ant buying of the call sessions it turned in reverse kind of there was an overhang of a lot of the options that are now out of the money i think there is a bit of an unwind there there is less of a uniqueness factor in the investor's mind playing evs, now they are happy to play the spacs that might merge with another ev or gm or ford >> we have just under two minutes left mike, what are the internals telling you? >> mix, actually, as we have been talking about a lot of winners against a lot of losers. the new york stock exchange, more decliners than advancers. 50/50 all day. we have been talking about the stay-at-home versus the going out portfolios very stark differential today. if you look at the etf that

tracks the leisure and entertainment sector it is up 3.3% the etf, work from home, a lot of the covid benefactors down. s that a massive spread on the indexes. the volatility lifted with the market down. roughly staying within its range. it was already above 20. still at 23 not breaking higher in a dramatic basement because when you have the give and take, winners and losers, it suppress index level volatility. let's look mixed picture for stocks boy, that is an unstatement today w the dow higher by 31 points certainly off the session highs. it has fallen into the close as the nasdaq's decline has deepened dow up 38 points caterpillar is having the most positive impact on the dow s&p 500 down for a fifth day in a row. we have not seen a losing streak that long since last february. february 28th, 2020. remember what was happening then we were going into this pandemic, covid-19 the nasdaq is the story today.

it is falling hard, down more than 2%. worst daily performance for the nasdaq since january, where it had another big down day, down 2.6% real valuation scare for some of these big cap tech names like apple, like tesla, all falling hard today the russell 2000 index of small caps also down about .7% but transports are higher, commodity prices are higher and bond yields are higher. particularly why you are seeing groups like financials and energy up. well to "closing bell," i'm wilfred frost along with sara eisen and mike santoli, cnbc senior markets commentator as sara just said we did slip into close the dow ending up only 29 points it had been up 160 about an hour or two before. it had been down 208 from the open as you can see from tin tre day chart a. soft final hour and a half of trade for the dow. s&p 500 down .8% the nasdaq composite down 2.8% that plays out in the sector

performance, energy financials top, technology at the bottom and the likes of tesla and apple continue their slowed. tesla down 8.5 at the close. apple down 3%. a spac worth 3. billion, starboard's jeff smith sand six terra's chair will join us to discuss the dealing coming up. mike, and omar joins the conversation mike, clearly we talked about the rotation and based often on the cyclicals versus the higher multiple tech stocks. also seeing that play out in the commodity space as well. oil continues its rip higher and the dollar soft today. all factors you can understand together the question is how long can it continue and the headline

indices hole up? >> those areas as well as looking at liquidation in the big growth stocks. you have to ask if these relationships are getting too high tension then also the other thing we should keep in mind we have been talking about for a while. the market maybe used up a fair bit of energy to stay still and churn last week. over though it was impressive how the dip was bought each day. then we are in a seasonal six week period. we have factors you could put in the middle of the table and say with it surprise anybody if we had a pullback or a pause? the answer is no but we have been talking about that for a period of time. is it all of a sudden going to matter i think that's the question you have to take because nobody is questioning the underlying economic trajectory here. that's the confused news it seems as if this is all market maneuverings around a good recovery story. >> omar, are you reconsidering your sector allocation for the year ahead in light of the

recent spike in yields >> you know, it's very clear that the rotation that started back in november continues to be the big driver, macro economically, and the markets continue to look a little more rational than we have seen probably in the last six months. you know a lot of the main drivers, as you can actually see in the action today obviously are consistent with higher yields, higher inflation expectations, and obviously a little bit of pulling back from the winners that we saw all the way in 2020. the bigger part looking with investors is to have this barbell strategy because we are still in that process of recovery i think it is very clear that we are in an economic growth recovery however, the pace and the speed the recovery is what is at question and i think we saw that rise in yields to be very, very quick. and therefore, you know, looking at what that means going forward, it is what is going to drive a little more volatility day to day in the market so the speed of the recovery is really what is in question i think the trajectory is very,

very clear so we are encouraging people to think about this barbell strategy where you still have one foot in the cyclical growth area which will give us pieces where we are going the see areas where we are still going to see a little bit of a flaky economy. then on the other side when you see the stimulus plans, when you see rising yields, when you see rising inflation 79 expectations where the cyclical rotation will take place into what about small caps, lindsay, which really outperformed the s&p this year >> yeah, small caps are clearly leif ranned to the reopening story here i am actually surprised they are not performing a little bit worse on the days like today when you see the ten-year yield up because if you take a look at the s&p 500600, the leverage that is on those companies is higher than it was going into the financial crisis so, apparently, investors are looking past the fact that yields are rising and really expecting earnings and

profitability and cash flow to come and take over and be able to offset any rise in yields that could impact their debt situation. so that's something that i have been keeping my eye on for sure. you know i am a big supporter of the reopening story and the small caps in general. but it will be something to watch, especially if the velocity in the move higher in some of these yields continues at the pace that we have seen. in the month of february the ten-year is up 25 basis points or more. >> of course the main reason yields is rising is hopes for a bounceback in growth bank of america boosted its 2021 u.s. gdp growth target to 6.5% today, which would be the strongest growth in nearly 40 years. also boosted its following year growth target. joining us now, michelle meyer, thank you for joining us i guess it is fair to say you have been relatively bullish about the expected growth bounceback this year anyway and getting more bullish >> that's exactly right. we have been really -- of the

recovery the recent data flow, the progress towards stimulus. the improvement on the virus front have all made us each more convinced of this robust growth this year. so 6.5% growth, yes, it is a high number it kind of takes you back at first when you see it. but i think it is entirely reasonable that we will be able to see that level of growth given the momentum that's already in the economy and the fact we are likely to see a notable acceleration in late spring, early summer, especially and importantly if the virus numbers continue to fall and that stimulus package is passed. >> so my question, michelle, is how much of it is due to the boost from stimulus? and if so, what does that mean for 2022, when that wears off? >> yes, stimulus is a huge part. consider that you had $900 billion of stimulus that went through at the very end of the year, hit the economy on the

first week of january. and we saw consumers spend out of it we are going to get another round in march a lot of money pouring in. in an economy that's already been underway in its recovery. so a good amount of the growth this year is due to stimulus but i think it continues into next year. if you think about what -- let's say it is a $1.9 trillion package that gets passed not all of that goes into the economy immediately. the actual outlays are something less than that and some of those additional outlays get spilled into 2022. then on top of that, there is the next round of economic stimulus, the 2.0 plan around infrastructure, education reform, and the like that can further boost growth into 2022 and 2023 so this is not it. you know, there is more coming, and the economy is not going to be left facing a big fiscal cliff in our view. >> mike, i think the pace with which we have reached 1.35 on the ten-year probably surprised quite a few people over the last

couple of week if growth also surprises to the upside at a sort of similar rate, does that mean equities can continue to power higher >> well, yeah. i don't think the level at this point, between 1.35 and 1.4 or even higher is really the challenge. it is about what happens to the rest of the bond market? there was softening up actually in corporate debt today that i think you have to keep one eye on because that has been one of the underopinionings of the equity market. the other thing is if you have a really dramatic further rise in treasury yields and it accelerates this rotational action you see the bid on the market cap weighted indexes of this fashion if it is going to continue to unwind the mega cap stocks and what that does to index holders is the question. bass they do punch above their weight still. >> michelle, what sort of stimulus numbers do you have factored into this growth, as far as fiscal, and monetary, how long that's going to last. >> we are assuming $1.7 trillion

seems reasonable we will learn more as the negotiations continue. then for monetary policy, i think the fed increasingly is going to be in a difficult place because as we were just talking about with mike and others, interest rates are on the rise and the market is starting to question whether or not the fed will be able to tolerate this level of overheating in the economy, potential rise in inflation, and at what point does the increase in inflation become troublesome and worrisome for the fed that they actually start to think about increasing interest rates earlier and putting some pressure on the recovery and on the healing labor market so i think the conversation around the fed is going to get super interesting with our outlook. our expectation is that the first hike will come in the second half of 2023. so the fed will attempt to be patient. they will adjust their balance sheet program first. they will use forward guidance but they may be pressured to move earlier, again, if you

start to see a real runaway in inflation expectations. >> lindsey, overall, do you think that company earnings will also kind of match this growth in inflation expectations and yields that would otherwise be pressuring multiples >> i think what we are going to see out of the earnings is that they are going to come in a lot better than expected right now, 2021, you are looking for 20% growth but that's off of a decline -- excuse me -- yeah, 2021, you are looking for 20% growth and that's off of a decline in 2020 i think 2022 can continue that momentum for a lot of the reasons that michelle really just outlined. and i don't think that investors have really priced that into the marketplace. the stimulus that michelle just talked about, 1.7 might be high compared to what others in consensus and the economists believe is going to come through, there is still going to certainly be a benefit consumers have a lot of cash in their bank accounts. the savings rate is up very

high, near the -- in the double digits ask they have been able to save over the course of the past year, and demand -- there is pent up demand that's going to come out and that's going to flew through the top line and into down margins and earnings in the years to come >> we'll leave it there on that high note. optimistic note. lindsey bell, omar aguilar, michelle myer, thank you for joining us. >> thank you. when we come back, data company six terra going public through a $3.4 billion spac deal with spar board acquisition corp up next, jeff smith and manuel medina on the deal

we see temperature control software giving everyone a shot at vital vaccines. at emerson, our software is shepherding medicines through every step of the cold chain, helping track conditions to keep each dose safe and effective. emerson. consider it solved. some say this is my greatest challenge ever. to keep each dose safe and effective. but i've seen centuries of this.

with a companion that powers a digital world, traded with a touch. the gold standard, so to speak ;) another day, another big spac deal. data provider cyxtera agreeing to merge with publicly traded spac spar board acquisition corporation in a deal worth $3.4 billion. joining us is jeffrey smith of starboard and manny medina, executive chair of cyxtera working on getting manny's connection up and running. jeff, glad to have you here. you raised a lot of money for this spac last year and i am sure have been looking for a lot of targets how did you settle on cyxtera? >> hi, sara. it is great to be with you it is nice to be here. we are excited about this transaction. thanks for having us on. you know, we were -- we were

looking for a real operating business, in a great industry, with great leadership. so as you know, starboard has invested in upped valued companies almost 20 years now. what we have learned as a common theme for everything is that leadership matters leadership is incredibly important. so when looking for a target for us, we are looking for a great business with real operations in a great industry with great leadership we feel like we got all of that and more with cyxtera. >> i think we have manny, speaking of said leadership, on line manny, talk us through the history of cyxtera you have had a number of companies, sold one to verizon announced another in a spac deal lately, and started this company several years ago. why is it time to go public now? >> hi sara it is a great pleasure for me to be here today. it is an exciting day for us it is the next stage of cyxtera

a growth stage i am thrilled to partner with jeff and the starboard team to take the company to the next level. cyxtera was born out the high quality assets that we acquired from century link a large carrier about three years ago. when we carved out the assets the goal was to create a global platform of retail communication facilities which are best in class. it took two and a half years or so to stand up all the systems to create a new sales force, to create the brand, and to create and develop a significant number of connectivity products that we now have in the market and get everything set that all finished towards the end of 2019. 2020 was a stellar year for us where we grew significantly our sales, our churn was significantly down so it was really time now for us to go public and that's why we are so excited

about this next stage. >> manny, described as retail colocation data centers. what exactly is that and is this just services for those in row tail? or is the growth opportunity the use the same platform in other sectors, too >> it is a great question, wilfred. the difference is this one when you talk about wholesale, think about one facility that is actually occupied by one customer like aws or amazon. retail is a facility that has hundreds of customers interconnecting with one another. we have 2300 blue chip customers around the world these blue chip customers are mostly very large enterprises and government agencies. so at the same time, we also have a number -- a large income of service providers, of providers that are selling their digital wares, if you will a retail colocation facility is where they come together and you can buy and sell your wares from one another. at the same time you are able to

access your ip infrastructure wherever it is, a public cloud, a private cloud, or whether it is in the facility for the retail colocations think about a marketplace of digital wares where you have customers buying and sellers and buyers. and that's the difference between a retail colocation. they are master flee interconnected with hundreds of connections being made between them and that creates the vibrancy in the marketplace. >> i think he can wi knicks is the big competitor there jeff, there are so many spacs, multiple spac deals a day. a lot of them are sexy ev plays, or ev battery plays. why is this unique, why do you see the growth potential here with data centers? >> sara, thank you you are right, there's a lot of spac deals it is a new way for late-stage private companies to go public and we can talk about all the

reasons why it is and very efficient. but the kpon theme of all the companies that are coming public and i think for everyone thinking about technology in the world is that we are all using data more. we all expect data to be around and available and reliable and faster more and more data more and more reliable faster everybody agrees that that's the future but the only way we can have that is if that data is going through data centers so in order to be able to get to the internet, to get down from the internet, to interconnect between companies and their apps, all of that information, all of that data has to go through data centers that's what gets us so excited about this is no matter which way you go, no matter which ev company is going to be most successful, no matter which boyio tech company is going to discover the next cure for something else or analyze different data in order to come up with the next cure for cancer, it all relies on data moving very fast and being very

reliable every one of those ideas, every one of those companies, every one of those industries needs these data centers to continue to grow and to continue to be reliable in order to provide that data and be able to utilize the data and the internet and coming back and forth and up and down. >> jeffrey, that's a strong case for this particular company and this particular deal though more broadly when you do see how many spacs are going public at the moment, does it worry you about overall market valuations for the companies you are not investing in, perhaps the rest of the market >> look, it reminds me again -- you know, it is kind of like the late '90s. we had an internet boom in the late '90s. everyone knew it was going to be enormously successful. it was a disruptive technology at that time everybody was investing in internet stocks and ones that had.com at the end of their name some became enormously

successful but if you invested in anything related to the internet you knew you did well this is kind of the same thing there is lots and lots of disruption happening across technology and health care people are interested in investing in these late-stage venture businesses some are going to be enormously successful maybe many of them i think we have lamented as investors the past several years, maybe longer that many of those companies were not coming public many from were staying private there was a lot of discussion why are these companies staying private? they have tremendous access to capital in the late stage private markets. i think what you are seeing now is the evolution of that many of those companies that were staying private much longer than they used to ten years ago are now coming public. you are seeing the cycle reverse itself as a public market investor, this is very, very healthy i am very excited about this i am certainly excited about this as to what it means for these companies a year from now, two years from now, five years

from now, ten years from n.o.w. as they mature >> but it does raise the question, jeff, about how it ends and if it really is a sign of excess in the market and you compare to it the.com bubble -- we know how that turned out? >> well, how did it turn out sara it doesn't mean it turned out poorly it turned out where we had a correction after that and then we are much higher now than we were then. healthy markets are good access to capital is good. all of this access to capital provides these companies the ability to invest and to continue to invest so, you know, there is a self fulfilling cycle that happens here that would be very healthy. are all of them going to succeed? no, of course not. not every company is going to succeed to the extent that people are expecting but many of them will. and there is a lot of transparency and a lot of opportunities for investors to be able to invest in companies that prior to now they wouldn't have been able to invest in because they were private. >> yeah.

a lot of people did lose money jeff, i want to ask you -- get you on the record about portevia you have proposed a new slate of board members and called for the ouster of the ceo. kicking off 2021 there the stock price though is near record high and has been climbing is that going to be tough to pull out >> i don't know. how much is it at a record high because we are involved? >> do you think that's why >> no, no. look -- >> commodity prices are also higher that helps. >> i think it is partly because we are involved. there is no doubt, whether it is by us, whether it is by the other shareholders, by management, by the board that the company has a great opportunity in front of it margins can improve by like 1,000 basis points revenue can continue to grow they are in extremely well position they should be a leader in the space. the execution has been poor. again, that's not really up for

debate management would agree their execution hasn't been great. last two years, they promised $2.2 million in ebid de and came in at $1.9 million missed the ebitda twice by the same amount. the last two years 2019, and 2020 this. year they are saying $2.45 million. they are promising but there is no doubt when you have conversations with management and when you have conversations with the board that execution has been poor and there is room for improvement going forward. we all agree there is room for improvement going forward. we have had terrific conversations with the board unfortunately we haven't reached an agreement where we can take core

coretevia. >> is it harder to find an activist target or a spac target these days, jeff >> i would say they are both fun thing to be able to do i am very, very fortunate to be in the business that we are in >> good answer jeff smith and manny ma deepa, thank you both for joining us on the deal today thank you. >> thanks. >> we have got palo alto earnings just out. courtney reagan with those numbers. courtney >> hi sara for palo alto networks, there is a beat on the top and the bottom line earnings coming in at $1755 adjusted that was well above what analysts were expecting. revenues also stronger $1.02 billion. there is guidance for the current quarter and the full year current quarter revenue guide sans above expectations. earnings about in line then when you look at the full-year guidance, most of those numbers are also above expectations again we had a good beat here

for this quarter so part of thatmay be accounte for in the full year guidance. you see here shares are lower by about 4.5% not immediately clear why because this is a a pretty strong report on the face of it. a quote here from the ceo notes that events like the solar witnessed attack back on november 2nd makes it all the more important for palato's networks to be able to deliver cyber security solutions for its client base. palo alto beating across the board with better than expected earnings but shares are down about 4% as we have seen from some other tech companies earlier this quarter. >> don't miss jim cramer's exclusive interview with palo alto's ceo tonight at 6:00 p.m. on "mad money." plus, great expectations up next, mike santoli locks at whether earnings revision momentum maybe peaking. and mnt bank bying people's

united as the erge to merge heats up in the banking world. and kbw's tom mitch awed announces why he thinks more banking mergers can be on the horizon. carnival is up 40% this month. pulling back after hours after the announcement of that pullback on the stock offering to capitalize on the recent surge. we are back in a couple of minutes. turn on my tv and boom, it's got all my favorite shows right there. i wish my trading platform worked like that. well have you tried thinkorswim? this is totally customizable, so you focus only on what you want. okay, it's got screeners and watchlists. and you can even see how your predictions might affect the value of the stocks you're interested in. now this is what i'm talking about. yeah, it'll free up more time for your... uh, true crime shows? british baking competitions. hm. didn't peg you for a crumpet guy.

focus on what matters to you with thinkorswim. ♪♪ when you switch to xfinity mobile, you're choosing to get connected to the most reliable network nationwide, now with 5g included. discover how to save up to $300 a year

with shared data starting at $15 a month, or get the lowest price for one line of unlimited. come into your local xfinity store to make the most of your mobile experience. you can shop the latest phones, bring your own device, or trade in for extra savings. stop in or book an appointment to shop safely with peace of mind at your local xfinity store.

snoi m and t bank announcing it will buy people's united in an all stock deal shares getting a boost to have news up 14% kbw advised people's united on the deal and their ceo joins us. thoibs we talked about whether there will be a wave of banking mergers unleashed. we have teen it tick up over the last months. is it going to be a pace that continues. it's peaked or is it the start of a acceleration? >> i would say it is going to continue it started precovid.

and with covid it ground to a halt and the pressures in place precovid are stronger now. the bigger banks are becoming more profitable. size is driving profitability. there is more of a need i think to can you tell costs because revenues haven't been growing quite as folks would have expected also there is a need for investment in technology we think -- i would call it steady i don't know if there will be a giant burst but i think the window is open again for consolidation post the departments of the recession from the pandemic. >> in terms of more deals this sort of size or could we see something bigger we have seen truist formed pnc involved in deal will it only be banks smaller than them that do more m&a >> it won't be the big four because they are at the deposit cap and can't grow by statute. but i think it is going to get

bigger because precovid the industry thought that the technology industry was a competitor now that we are getting towards the end of the covid recession there is a view that the technology industry is a much bigger competitive the customer adoption of digital engagement i think is making even the bigger banks think they need to get a little bit bigger to be able to take on some of the larger technology companies. >> tom, what does it mean for consumers if they are local or regional banks start merging and we see all of this consolidation? >> i think it is better. i think it is better because i think the whole idea is more digital capabilities to serve these customers because just fewer customers want to go to branches it is not all about the branches i think the regional banks will be able to stand up and be more competitive with the big four. i think because there is a big public debate about should the big banks get bigger if bigger banks couldn't get bigger, then we will end up with four big banks

what we really need are four more big banks to challenge the four bank we have, and that will drive more customer choice and i think will actually end up being more pro consumer than just solidifying everything where it is today. and i also think, too, that what is happening this is that we have had a really big move in the bank stocks and we think that there is room to go still and i think that the stocks recovering from where we were last year is also helping to fuel this. >> tom, it has been reported in quite a few places over the last 24 hours that hsbc is considering or will exit its u.s. retail banking operation. is that an asset that will be bought by somebody, is it an attractive asset or is it harder to carve that out, will it be shut down? >> because i can speak a little bit about this heens we are not working on this, of course just so just from a big picture, because if we were i couldn't talk about it. but from a big picture, i am not surprised that the big global

banks are honing their franchises to be more profitable citi group, recently it was talked about they are going to sell some of their overseas operations that's not surprising. the industry is awash with liquidity right now. all the ppp money that's been put into the industry a lot of it is sitting in deposits around the country. the view is that deposits aren't being sold for a very high price and there is also not a great demand for branches. i think it could be sold but i wouldn't expect it to go for a big price because that's just where we are right now in the cycle. >>m to, bank stocks have been hot, up another 1% today, now the second best performing sector of the year what could get in the way of that rally >> well, i will tell you, i -- right now, it feels pretty strong i can tell you what is supporting the rally and why we think it is going to go higher the interest rates in the ten-year moving the way they are and giving steepness to the yield curve is probably going to

help earnings estimates going forward. the fact that we might get another $1.9 trillion of stimulus takes credit quality off the table even further for the banks. plus we think estimates are likely going to be too low because of the fact you are going to see reserve releases and we have got capital piling up which could help consolidation as well as i think share repurchase even though i think it is becoming less fruitful as these stocks go up i think there are a lot of factors. and i will leave you with one more while bank stocks have now recovered all of their valuing ais measured by a price to book since the covid crisis relative to the market, they are trading at a 30 to 40% discount. and i think you saw it today you saw how growth was selling off, value was coming back i think on a relative perspective, you could still see these stocks working higher. and that's why we continue to like many of the stocks in the sector. >> tom i wanted to pick up on one thing you said there,

buybacks there is such a thirst for them. one could understand that at large points of the last decade and of last year when they were trading at significant discounts. is the case for buybacks now much diminished or slightly diminished if you were advising soft big banks, many of which are at ten-year or all-time highs would you advise them to stop buybacks. >> i think it is going to go down which is a classic corporate finance capital management situation where there is probably -- there is a diminishing marginal return to share repurchase at certain levels, at least that's our, my opinion. i think what's -- but capital is going to keep building i think banks would number one prefer to grow but that's not really in the cards right now. it is not really there for organic growth so they are going to look to do other things if share repurchase doesn't have the return they would like have

liked i think they are going to return to acquisition. that's part of the bull case we have been hearing from many of the investors around the sector, they do expect consolidation to continue that's part of the drive, the share buyback price has less of a return >> thanks for joining us. >> thank you. up next, mike santoli looking at whether earnings expectations are starting to peak after a big run up. plus, be, the founder robert johnson ho on how corporate america can help increase racial diversity in the workplace and in the c suite we'll be right back. idence in y. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. for a prospectus containing this information. dana-farber cancer institute discovered the pd-l1 pathway. pd-l1. they changed how the world fights cancer. blocking the pd-l1 protein, lets the immune system attack,

attack, attack cancer. pd-l1 transformed, revolutionized, immunotherapy. pd-l1 saved my life. saved my life. saved my life. what we do here at dana-faber, changes lives everywhere. everywhere. everywhere. everywhere. everywhere.

>> thanks for joining us. we'll be right back. stocks closed lower for the fifth day in a row at least the s&p let's go to mike santoli for a look at earnings expectations. >> improve fast. the question now, is the rate of improvement rolling over a little bit basically the percentage of companies where earnings estimates are up minus those going down what's the difference? you see it curling over like that it is expected it can't go that much higher for that much longer 2018, when at the tax cut was filtered into earnings when it goes down, estimates could be higher in general but maybe at a slower rate i think the question is has the market rushed to a place where it is anticipating the fact that the consensus stilts are probably going higher and we

have priced it all in. that's going to be the debate going head. >> sector differential as well >> it is across the board. but it is the cyclical sectors energy is flying right now because it is coming off such a low base. still ahead, bet founder bob johnson reacts to a new report that will it take nearly 100 years for black employees to close the diversity gap in the private sector. and the nasdaq close gz down 2.5 as we head to break, look at the worst performers in that index today. peloton down just shy of 10% at the close. back in a couple of minutes. ♪ ♪ (upbeat music) ♪ ♪ ♪ ♪

♪ ♪ ♪ ♪

time for a cnbc news update with rahel solomon >> hello everyone. here's what's happening at this hour senate majority leader chum shuker says the senate is on track to pass a covid relief bill by march 14th after a house panel advanced its bill settingu up full passage by the end of the week. the fcc is sub disi --

subsidizing the low income americans. demonstrate onsued mike lindell for $1.3 million saying he spread conspiracy theories to sell more pillows. the company claims he used fight for trump and q aknown as promo codes. nasa showing what it is like to lapped on mars thanks to a camera on the bottom of the perseverance rover nasa showing new pictures of the landing side it is pretty cool. some might say, out this world i know that was corning. >> it is amazing to see. what wilfred he is the king of these kinds of jokes. >> i was going for a pun mars-velous. >> mine was corny. yours was unacceptable.

>> noms, i love a cheap laugh. >> you can have a competition. up next on the show, thanks rahel. bob johnson on how to avoid workers losing their jobs to automation on wl alstreet, an ugly day for technology apple down the most, 3%.

shows work still needs to be done, a lot of it, when it comes to improving black employee representation in the private sector the group makes up just 7% of the work force at the managerial level. just 4 to 5% of the work force at senior levels the report also shows that black employees are overrepresented when it comes to front line service industries, with 45% working in health care, retail, or accommodation and food and service. joining us for more is bet founder bob johnson. he's also the founder and chairman of rlj companies. i know these stats are not new to you, bob. one interesting precipitation though that came from this mackenzie report is that companies should consider relocatesing offices to cater more to the black work force go to the south for instance more and set up office where is 60% of the black private sector work force is. do you agree with that

>> sara, i think that anything that companies can do to address the huge gap not only in what i call fundamental employment but also employment in key critical executive and senior executive positions. and i think the only way it will happen, sara, is if there is accountability to companies for failure to commit to end the huge gap in employment opportunities. i think there are ways to do it. one, companies should demand that they put that in their charter. and shareholders should hold them accountable for it once it is in the charter. i think the groups like iss san glass lewis could look at the whole condepartment of a no vote against companies that fail to commit to this kind of racial parity or basically closing the

employment gap and i think the corporations all, big and small, could acouldn't the policy akin to the nfl -- rule, which required owners of football teams to interview at least two minorities for key positions like coachgm before they can make a hire. they had a penalty of a fine if they failed to do so i'm not sure we want to go to fines with corporations because they can easily pay the fines. i think there should be some sort of moral equivalent that if you fail to do it, you are singled out and your stock is reported as failing and causing certain people who believe in the form of racial equity and racial equality to take their stock, take their investments other places >> it's good to get the specifics there, bob we've seen some progress on the board front, but nothing as far as what you're outlining i also think of you as one of

the leading, most vocal advocate for reparations in this country and this comes through congress every so often, but it does really feel like it's picking up momentum there was a house committee hearing on the issue last week or so. do you see things changing on that front do you think there can be real movement there >> unfortunately, sara, i don't. i would draw your attention and all of the viewers here to read a very informative and provocative article that came out of axyos about ten myths closing the wealth gap and that article took on every notion that people have today as to how best to close the wealth gap it ranged from education to creating and financing black banks to, you know, responsible families, all of those things and it said, and i quote, if

taken altogether would not close the wealth gap reparations is not going to do it because reparations is not going to happen. what needs to happen is that the leaders in the country, in the government, corporate america, intellectuals, whatever you want to point to, need to recognize unless this country makes racial parody -- i mean racial parody, not what i call identity politics parody, which in many ways is diluting issues, when you add groups who have to be taken of by programs or policies it dilutes the opportunities for millions of black americans. if racial equity means anything, it must start and begin with race that's how we got into this situation in the beginning it was based on systemic racist

discrimination that still exists in many ways i think it goes to accountability companies understand return on investment capital, we understand return on equity, they understand total share return tie all of those factors to achieving opportunities in employment at all levels for black americans, i think then you will see results because that's what companies understand they respond to -- >> no doubt. >> to the market conditions. >> well, still feels like we're a long way from there but, bob, thank you for being one of the leading corporate voices on this issue. bob johnson, founder of bet. >> thanks, sara. still to come another big day of earnings on deck including a crucial check on the retail sector when macy's hits the tape at emerson, our automation software is empowering

pharmaceutical companies to accelerate their production of critical vaccinations for the world. emerson. consider it solved. so you're a small business, of critical vaccinations for the world. or a big one. you were thriving, but then... oh. ah. okay. plan, pivot. how do you bounce back? you don't, you bounce forward, with serious and reliable internet. powered by the largest gig speed network in america. but is it secure? sure it's secure. and even if the power goes down, your connection doesn't. so how do i do this? you don't do this. we do this, together. bounce forward, with comcast business. hey, dad! hey, son! no dad, it's a video call. you got to move the phone in front of you like..like it's a mirror, dad. you know? alright, okay. how's that? is that how you hold a mirror? [ding] power e*trade gives you an award-winning mobile app with powerful, easy-to-use tools and interactive charts to give you an edge,

24/7 support when you need it the most and $0 commissions for online u.s. listed stocks. don't get mad. get e*trade and start trading today.

up next your wall street look ahead tomorrow we'll get two reads on the consumer the details after e eathbrk. it's either the assurance of a 165-point certification process. or it isn't. it's either testing an array of advanced safety systems.

or it isn't. it's either the peace of mind of a standard unlimited mileage warranty. or it isn't. for those who never settle, it's either mercedes-benz certified pre-owned. or it isn't. the mercedes-benz certified pre-owned sales event. now through march 1st. shop online or drop by your local dealer today. all the things, all around you where you learn, work, and fly we help make them healthier. we are the people of abm. for more than 100 years, we've been a leader in making spaces cleaner, from the things you touch to the air you breathe. today, more than 100,000 of us are innovating to ensure spaces are more efficient, healthier and safer. abm. making spaces healthier for you.

we see smarter software delivering cleaner power. emerson's breakthrough technology enables the power industry to integrate renewable energy sources to modernize and improve the electric grid. emerson. consider it solved.

new projects means new project managers. and improve the electric grid. you need to hire. i need indeed. indeed you do. the moment you sponsor a job on indeed you get a short list of quality candidates from our resume database. claim your seventy five dollar credit, when you post your first job at indeed.com/home. fed chair jay powell testifying before the senate banking committee at 10:00 a.m. eastern on the earnings front we'll hear from home depot, macy's, square, toll brothers and on "closing bell" we have an interview with the procter & gamble ceo david taylor a lot to look forward to

mike, what will you be watching after tech got slammed today >> actually, just to see if treasury yields back up a little bit. i wouldn't be surprised very oversold the bonds, give a bid in powell will say he's not going to talk about fiscal but they're going to ask him. >> thanks so much for watching "fast money" starts right now. >> i'm melissa lee this is "fast money. tonight on fast, racking up gains, activist investor setting its sights on kohl's and why the move made one of our traders take notice. a trio posting gains from royal caribbean to ge. the day's big winners a triple play and talk about a good about or not, taco bell is getting in on the chicken wars. should you take a bite out of its latest offering? we start off with the tech rout. the nasdaq in the close