ago because it wasn't up to snuff, but the idea that they're manufacturing is great news. it means we'll get more of the doses out there more quickly that's fantastic >> yep let's go let's go everybody. >> that's right. here we go we got to go too we're out of time. we'll be back tomorrow we hope you are too. right now it is time for "squawk on the street. good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber best day for the s&p since june. b of a on equities and goldman on spacs we'll begin with major news on the vaccine front. merck set to help j&j's newly approved vaccine >> plus markets are poised to

open slower after the s&p the best day since june. 90 spacs raising a record $32 billion in ipo capital last month. we'll dig into the numbers of course, we mentioned spac now less than a minute into the show it's more typical than not >> yes definitely the first half hour on most days we'll start with the story that we do expect to get more detail on later today that is that merck is going to help j&j make the vaccine. washington post helped break the story says the white house helped broker this arrangement and that if it is at peak production, it could double what j&j was going to do on its own >> i'm glad to hear that i felt j&j's combined amount they were going to put out with emergent bio was far bigger than what they announced. i sew some people are saying jim, you thought they were going to do a billion. i still do, but this is

terrific what we're getting merck helping out is a recognition we're going to beat this thing and we're going to beat it faster because of how the scientists and drug companies have worked together in a remarkable way the sputnik, doing well. russia is selling it many different places astrazeneca is being used. j&j, if others would join, can you imagine? >> yeah. listen, i mean, we're going to get to 400 million doses available. that's obviously more than the population even double counting as you need to with pfizer and moderna you know, by the summer, i think, and having discussed it with meg who we go to for all things vaccine-related then the question is the rest of the world. which you also need to vaccinate. could take some time perhaps that gets there more quickly.

enabling a lot more travel, for example, and things of that nature >> well, look, it's important to remember that the j&j vaccine is like flu vaccine it can go anywhere and david, you know if you don't need refrigeration, let's just send it everywhere and i think that we're going to find ourselves traveling i think carl, one of the things that's going to happen is you're going to carry your card i don't know what kind of card they're going to give you but i feel very strongly that you're going to have a pass and that pass is going to say you can come in and it will be very important, because i think that when you go to a restaurant right now, they take your temperature which we know exactly has very little correlation with the disease a pass is much better. and i think it will change life dramatically >> so jim, given all of that and the i guess increased optimism even, even from yesterday on the vaccine front, you look at atlanta fed. their q 1 gdp pass 10.5. why given this assumed strength

in q 1 are companies like target this morning still a little hesitant to give guidance? >> i was thinking about target and what i would have said i would have offered alternative forecasts. i would have said if we get this, i see this happening and if we don't, and we get a shutdown of the vaccines, here's what i think that's a complex thing to try to figure but believe me, behind the scenes in every company that's involved with travel and leisure, they're offering two forecasts inside and i think that the retailer should do the same because otherwise what we think is they're uncertain about the economy and uncertain about the layoffs and the unemployment rate and they're not. david, they're trying to figure out how quickly you can get these things in people's arms. and if it's very quickly, they'll have a good quarter. if it's not, the quarter is going to be as what you just saw and maybe not even as good >> right although you've made the point there are certain retailers that benefitted from the condition that we've now been in more or less for the last year

>> and they're the worst stocks. >> and they're already reflecting that expectation of tougher comparisons. >> versus a kohl's >> but amazon. is amazon going to have tough comparisons? >> amazon spent $4 billion on trying to make it so that their employees are safe and look, i know i'm not being political i know that president biden would favor unionization in some places but i'll point out that the amount of money they can make if their done spent is insane >> that's a great point. that spend no longer has to occur even if there was obviously as we know a huge uptick in orders and then the larger question is how much of the behaviors that we h we have inculcated over the last year remain. zoom, so many other things how much is here to say. we know a lot of it is it's not as though e-commerce is going to fall off a cliff. no way it's moved up more quickly,

perhaps than it otherwise would have, but many people believe it will continue on the upper trajectory, perhaps not the same pace as march of 2020 to march of 2021. >> yeah. yeah maybe we should get into zoom just a touch on that front, david. i see piper this morning, jim, upgrades to overweight zoom upgrading to overweight target 541 on this notion that there's going to be continued demand for this even if we do start to go outside. . >> but not everybody liked it. i was surprised. the guy jpmorgan discussed, i love his stuff i don't know i've become addicted to what he has to say he's talking about a deceleration he's not too happy about it. the opco, talking about pretty critical piper talks about it as 2 % penetration. i have to believe that the thing that people are missing with zoom is that it's one of the things that actually had a little upward trajectory even before the pandemic and zoom itself is developing an eco

system i think people are viewing zoom as static my prediction is we'll find this time next year when you see someone on zoom, it will look like they are on camera. very difficult to differentiate between the zoom faber look and the zoom camera look >> right really fine hdtv quality >> that's where they're going. >> and then we've talked to chuck robins web x is from sysco and similar, they argue more secure the day of 3-d where we're going to have a meeting, i'm sitting here and you'll be kind of sitting there. you won't really be sitting there, but you will because i'll be talking to you there. >> i know you're an af-- you --o you watch netflix or the dub that's what you can choose >> that's a great point. >> yeah.

and your point, they even say that 20 20 was driven by commercial over enterprise, but yeah their general notion is it's going to be folded into business conversations in a way that maybe we didn't see in the emergency setting of the first eight or nine months of the pandemic >> let's also remember when you look at the bottom line of a lot of companies, it was incredibly helped airplane travel and hotels >> yes >> they are the bane of the existence of some of these companies they discovered. the t and e. the amount of money spent of road the first class. if you're working two or three days a week at home and no one goes to try to close your account, why do you need to travel zoom with a dock you sign at the end. >> we know the area i followed for years, mergers and acquisitions hard to imagine you could negotiate deals where none of

the parties saw each other in person didn't sit down to dinner or have a handshake that's happened numerous times there's occasions where they take the planes and meet outside somewhere, but so many deals, and that is just one example of it where you've been able to do things you perhaps had never thought possible as little as a year ago on zoom that said, when you speak to people, this is what you get you get first, if you talk to goldman sachs, they say i want everybody back in the office i want them back they should be back. and that's a lot of different ceos at least in areas where they feel like there's strong competition and they'll benefit from it. to competition, the first time your competitor gets on a plane to go see a client, then everybody is getting on the plane again. >> that's the big issue is are people -- that's a mentxican standoff if one goes, it's presumed that guy or woman gets the business so i think that's going to be a big deal it's hard for me to see jamie

diamond saying let's all do zoom even though bank of america is going in person. >> no way. >> it's not. >> so it all works until it doesn't work will it ever come back, though, jim, to the levels of business travel we saw in 2019? >> no, it won't. and i believe zoom is not standing still it's very important. they haven't done any acquisitions they do have a great -- to speak of to this point, they have a great currency the stock did not come in hot. i think it's here to stay. obviously it's the second most highly valued company after snow flake. >> right they don't have a lot of debt, though >> a lot of cash >> they don't need to do a convert that twitter did 0% up 70 >> did twitter need to do it >> no, but why not raise 1.25 billion when it cost you nothing? >> everybody should if they're giving away money. don't you want some? >> why isn't everyone issuing converts right now

it's amazing right now what the capital markets will take. 0%, up 70 on the conversion price all day long >> investor relations at twitter tweeted out details on their converts but i think fastly, jim, also on the list today shaq from yesterday, macy's with some tender -- and roku too a billion in -- >> they have so much money you're talking about companies people often talk about is this 1999, 2000 in this particular case, it's the opposite david, those companies were running on empty and no one was giving them additional cash. these companies are getting full faith and credit of this market. it's incredible. >> and how long will it continue >> as long as the fed keeps rates low. >> right >> and that's why a lot of people feel this market is rigged i say if you're twitter and trying to spend, i talked to ned

last week. they want to spend billions of dollars. why not raise an additional billion? >> you look at the names we've talked about that have run up so much you talked about gme, but you could take the same argument for discovery and viacom up 80% and 93% since the beginning of the year maybe you don't need it, but why not raise it >> gme could do that they have a decent balance sheet. if they didn't want to sell stock -- they should, but that's the end of my twitter feed forget it. >> here we go. one year at 129 and then these names have been incredible discovery as well. i pointed to the map many times because it's been a stunning run after trading so cheaply for so long >> and what happened here? the cord cutting from the survey it's accelerated >> it's accelerating nobody really knows what a direct to consumer business is worth. they really -- everybody is trying to figure out a discounted cash flow model at some point in the future obviously disney is seen as the

greatest thing ever. i don't know -- it will be dtc, theme parks and movies at some point they'll dispatch everything else because nobody cares anyway, but what it's all worth, everybody right now is enthusiastic about the models. and these are heavily -- these names in particular, the discovery viacom, heavily shorted. they picked up momentum there. discovery had a good quarter, more subs than they thought. advertising strong i could come up with a ton of reasons. none may be right. >> i have a smart tv it comes with a clicker. and the clicker says amazon, netflix, hulu. and then the rest of them you have to down load on your smart tv amazon and netflix have such a leg up because of that smart phone clicker. the smart cast, i don't know whether you have one of these, carl, but you have to put on like hbo max you have to put on some of this

paramount. and to me, that says i'm lazy. i'm not going to watch it. >> you watch it on your phone. >> i love to watch things -- my wife hates my taste. my wife hates my taste i like -- right now i'm watching bosh >> are you 15? watch it on a tv >> i watch it in bed she hates me >> why are you watching that violent show why do you watch it four times >> beautifully shot. watch them on your television. >> i remember we once asked ron howard whether or not he cared where you watched his movies on and his answer was, when i grew up i watched grapes of wrath on a black and white screen this big. to some of these guys it doesn't matter >> nope. and when this gets to be 5g, david, see you later >> well, yeah, i know. it's all about the story, still. >> it is >> yeah. tell a good story and we'll watch and read >> yeah. >> well, david -- >> when we come back, we'll talk

about what was said about surprising findings in disney plus a bunch of upgrades and downgrades this morning. the quality on the cruise lines is interesting futures not as dramatic as yesterday morning. but we do look to see some ene aps mild gabes in th op -- gains in the open. we'll see. back in a moment 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.

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welcome back spacalicious spac alakalaka i don't know it's all about spacs every day let's give you the latest numbers as of march 1st, '13 spak ipos. this is just 13 hours. 3 .9 billion raised. spac analytics there they are and so far 202 ipos. 63.5 billion raised. a note out this morning at goldman, bigger, louder, faster. spac almanac said spacs could generate -- that's just simple math based on what they've raised and the multiples. you're going after companies you're typically not you're one seventh the size in terms of what the spac raises versus the overall number. right now the average the enterprise value of 2 .9

billion. it's almost based on 2026. 2026, there's going to be flying cars everywhere. we're going to have solid state batteries that let you go for 10,000 miles on a charge i don't know it's just going to be amazing, 2026 and everything is trading in a multiple on that it's a lot of growth capital that's come into the market. in a lot of ways it's fascinating as you look at the post deal. index, we have the predial index. things have quieted a bit on the first-day pops when the spac issues the shares. we'll keep an eye on that. but there's plenty of money being made still take a look. even if you want -- actually, i won't get into that right now. i was going to talk about some of the -- the pipe deals actually and the average cost is even lower sometimes than $10, but that's a story for sort of another day. but jim, i mean, i looked at

amolus an old friend of mine. three, four, and five. his spac raising 1.2 billion. that's atlas crest investment corp the first one was flying i like flying cars they're not, electric flying taxis. and jthen jobi last week who wet public for reinvent public partners >> one of the things that david called our attention to is a list of 20 active spacs that trade as premiums. 23 to 27 above their ipo prices. >> right they trade at premiums to the $10. >> right >> without having announced the deal >> isn't that incredible >> that shows in our index, and -- >> but that's alchemy to some degree, isn't it >> there is an enormous amount of buying power moving into this market every day with money

being raised in the billions and it is going to be put to work and it is replacing your venture capital. late stage and not necessarily late stage there's an awful lot of companies that are going to be talking about on mad money with a lot of risk but a lot of reward >> i have excel fleet on tonight. this is a company, there's a lot of companies based on ev and clean vans, clean -- small engines. >> the last mile truck >> we had one of those last week >> and by the way, today we got an upgrade of mp materials it's a terrific company. i had them on. that's a spac that's for, carl, that's rare earth. you need it for magnets for electric cars. it's very positive >> yeah. volvo, guys, the latest company to say going all ev by 2030. we'll get more on that and the opening bell in about nine minutes. don't go away. this is decision tech. find a stock based on your interests

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we mentioned the zoom quarter in the pipe or upgrade this morning zoom is going to lead the 10 0 gainers premarket along with other names related to work from home activision also on the list. the opening bell in about 5 minutes. don't go away.

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let's get to a mad dash beyond meat. >> this is what i call a football name, meaning there are companies that are let's say the brokerage community is divided it bounces back and forth and the stock does nothing gutsy upgrade by citi saying let's not forget they have pepsi, mcdonald's and

mum. none of those are kicking in because these are food service and you don't get as much business as you're going to have the premise is ethan brown is doing a good job as ceo. they've had a lot of turnover. i think once food service opens up, it's going to be good for them are they the best tasting? they don't have gmo the younger generation, if they sense there's gmo, won't go for it i like this call i think this is a gutsy call i think when food service opens, ethan is going to make a lot of money. buy beyond meat. >> right here. >> right here. gutsy call because it's not going to be a good quarter i like the partnerships. yum is real. mcdonald's coming in it matters a great deal. and pepsi and what i would tell you is it's -- ethan is charismatic. >> early days? >> yes early days and they keep making it taste

better and better. i use it all the time because my kids are vegetarian and vegan. i find it to be good-tasting as good-tasting as a true burger, i don't think so, and that's an issue, but one day it will be. as we said, s&p hasn't seen such a good day since june, yesterday. >> yeah. yesterday's action was truly remarkable, jim. i did want to get you one last thing on beyond meat, because we have talked about the partnerships specifically with mcdonald's but you're right even citi says the details on some of the partnerships are scant. and there's still some who believe that beyond meat is trying to tell you about it is not what the vendor would tell you. >> that's the part that i think ethan believes once you're in, you're in. i agree with you i don't know if the mcdonald's franchisees want a separate make line for this kind of thing. i do think that if you put it in college cam pugss, people will

like it. like i said, this is probably one of the most controversial nonreddit names. and nonreddit means you won't be attack firsed if you say someth bad about it >> there's the opening bell and the s&p a more balanced view than yesterday that monster rally as david said best day in about four months for the dow and nasdaq jim, kohl's is going to be interesting to dissect today michelle gas talking about finally some metrics on the number of customers that amazon brought into the doors about 2 million new customers in q4 she said mostly young adults >> i think the stock is down not because the inventory is good. they didn't reinstate the dividend at the level i think the insurgents had expected.

and also remember that fterms of the baseline versus 2019, 2020, they're not doing that well. i want to hear what she says i think scott today is -- i think halftime is going to be an extraordinarily important interaction given that they had john dus kin previously and john is not happy with this quarter says there's a lot of weakness to take -- to examine and that maybe people will see through that things aren't that great. david, one of the things i like about kohl's is i like retail here i just like retail i like the retail companies that were not doing well. i mentioned that when you look at costco, what a fabulous retailer and can et get out of its way after the $10 dividend no people hate costco almost as much as the most hated retailer can you guess what the most hated retailer is? >> no. >> walmart >> really? >> yeah. it's down 8% for the year.

a lot of people feel like doug mcmillen paying people more hurts the end game i think it helpsthe end game he thinks if we don't pay the people more, we're not going to keep them. >> walmart up a bit today. when you talk about you like retailers, are we talking about buying the etf, the reit, or is it better to focus on individual names given as we've said many times, there are a number of retailers who did well during this period, and, therefore, will be facing tougher comparisons in the coming months. >> etf is heavily weighted toward the heessentials you have to pick and choose, and one i think is terrific that i picked last night was ralph lauren didn't know they were going to announce the new initiative where you're sharing ralph lauren is doing so well. i looked at elle brands. elle brands is a remarkable situation. they got rid of victoria secret.

right? and they just became bath and body works and who doesn't want in a pandemic when you have to try clean a company that's about clean? >> that thing came off the bottom like a rocket ship. it's been up even more than that >> a rocket ship are you speaking the language? >> i'm not you're talking about yesterday's spac deal? >> no. the reddit that's what they -- >> is that what they do? >> are you part of that? >> i am not a part of that no please don't draw me into your wars man, you were battling yesterday with people on twitter i was watching it was like a street fight gone out of control i had this idea of you running down the street just -- i mean, it was holy cow. >> that is going to be -- that is the some people say the nadir. i would say the apex i'm done trying to knock people out. i was trying to find the first 100 people i could block because i blocked probably about 30 people today already. and i only got to 47 people. they were concerned that -- >> i checked out on 6:30 and you

were at war with half the world. >> i was, and i liked it i was like bring it on >> jim is going to have one of those thermometers on the roadside where the number of people you've blocked over time, can we get to the new goal >> i am telling you, it's a berma shave. people in america hate this. look, i decided that yesterday was going to be the day that i was just going to call people out. i'm done with it i just wanted to see how many people i could alienate. i managed to alienate thousands of people. >> it was something to behold. i kept looking i'm like i wouldn't say that i wouldn't say that either no, i wouldn't -- thanks for not bringing me into your fights there own/or to the reddit community. really, the cciv was enough for me hostility from that one name was enough for a lifetime. >> carl, if you -- the bad -- the way i got in trouble with these guys initially was when i called in from the hospital and said that i've had gamestop at

350 should be sold that was regarded as one of the biggest sins i could possibly commit the fact that the stock is dramatically lower means absolutely nothing i broke -- break the short >> some of the names they also like, that community, jim, are the cruise lines which are all a little bit higher this morning mcquarry says we're upping to out perform as a sector. they think the next round of saling suspensions if we get it would be book-ended by a more firm commitment to announcing new sailings, at least in the u.s. as we believe we're in some of the final chapters of the pandemic >> david and i have been talking a lot about how this new group of investors when they're offered equity, they take it and yesterday royal caribbean offered 16 million shares at 91. and a lot of people, david, in the old style of what might have happened in the stock market at one point, they say royal

caribbean has the cash to get through. let's buy royal caribbean. >> right >> what do you think about that as a way to invest i'm not being facetious. >> my question is what are the earns per share going to look like how many shares have they --. >> >> you mean the delusion? >> the delusion is going to be enormous right? and the stock is really rebounding dramatically from the lows it's not at the highs, closer to 11 111, somewhere in there. we're not talking that far away. the share count, i don't know the numbers. i'm sure some of our viewers to but the share count increase has been dramatic. the earnings per share, what will they look like? >> this industry was very afflicted by having too many ships. so if royal caribbean does get back to where it was at 140, you have to question, carl, whether traditional analysis matters there were too many ships.

so pricing was under pressure. now we've got tremendous bargains i don't know if you looked at some of the cruise prices but they're fantastic. they're not going to be making a lot of money initially and david is so right, carl. i mean, these companies are serial issues. issuers of equity. that used to matter. and right now it does not matter to this newer group of buyers. it's impressive how much they like this group. but it's also a reminder that the analysts themselves have to downgrade the hell out of them >> yeah. well, all three are in the top five s&p gainers as of this morning. jim, earlier this morning we mentioned disney and the streaming environment and just in comments out of bob chapek this week at one of the conferences. mostly about the percentage of disney plus subs that are households without kids. we didn't realize the nonfamily appeal that a service like disney plus would have and that has big implications for the way disney thinks about its ongoing content.

>> it's rather amazing because what it says is we continue to misjudge the draw of this company now, christine mccarthy, a great cfo, made this point a couple times. it kind of went over people's heads that -- how many -- and i think, david, what's happened is there's a sense that this is a company that when you have kids, you visit and then when the kids get older, you're done with. and they're not. >> not if you like "star wars. >> right >> right >> not if you like any of the mandalorian, people watch mandalorian. >> that's my point anything having to do with that. >> and the avenger's group my wife watches them over and over again captain america, she's watched it four times. it doesn't change. it's the same. >> i thought what were interesting as well, comments i believe morgan stanley is having

after their conference there's a number of different speakers also talking about the theatrical window. this is something i know carl pays close attention to saying it doesn't see it going back to the old theatrical window. perhaps not a surprise but interesting to hear them say that as we watch disney release some of the movies directly to consumers through disney plus. we've seen hbo max do the same we've seen others, paramount plus is going to tighten up the window, and he says i don't think people have the tolerance for a movie in theaters for months after a year of getting titles when they want at home. >> yeah. i guess -- i don't know if he updated the strategy on black widow which i know they've been holding close to the vest in the hopes that will be a theatrical release. i noticed yesterday there was a good piece on major filming production coming back to california with the assistance of some tax incentives but things like universal's doing a

remake of "scar face". whether it ends up on a streaming platform or in the theater, just getting stuff in the can is huge for some of the names. >> it will be. i noted they were filming succession i was in midtown >> you said hello to my little friend at amc. >> one of the great shows. >> an excellent article about aaron adam >> yes talk about selling stock right? we're talking about movie theaters before we finish on disney, espn, i mentioned it earlier hardly gets talked about you've made this point on -- >> sports show >> let's not forget the nfl. that is going to happensoon. >> you mentioned that yesterday. you asked about that >> the numbers are going to be very large i asked the ceo of viacom about it last week he didn't have a lot to offer there, but let's keep a close eye on it. the numbers are going to be

enormous we don't really talk espn as much, obviously, as we watch cord cutting continue, but jim, it's interesting to see what the strategy will be longer-term for espn and disney and how they view that asset herself owns 20% >> when is alphabet going to say and google you know what we want youtube to win and youtube is doing quite well. let's just buy let's take the contract? >> it's not happening this go round. >> they don't seem to care about that >> maybe amazon would step up but doubtful i don't know that's what i heard. >> how much is it going to cost to get the nfl >> a lot you know what? i'm not going to give you -- i don't. >> okay. moving target. >> do you think it's more than it was >> oh, my god, yes all the numbers are going up >> then alphabet, facebook and amazon have the money. >> they do they've got the money. they just -- it's still a big ticket

>> all right, guys we'd be a lot worse off without emergency and materials leading this morning let's get to bob hey, bob >> good morning, guys. and yes, a flattish open energies helping but we've got a defensive tone to the market consumer staples are leading early on health care is leading merck is having a good day merck has not been great the last few months but after the great announcement about the co-producing of the j&j vaccine. slightly defensive tech is flattish megatech cap flattish. china, the main china etf is down more than 1%. that's because the main china bank regulator came out with rather aggressive comments including comments about the u.s. stock market overnight. here's what he said. he said financial markets are trading at high levels in europe the u.s. and other developed

countries which runs counter to the real economy we're very worried about the financial markets. particularly the risk of the bubble bursting of foreign financial assets he's calling out the u.s. stock market and using a rather dirty controversial word, bubbles. that's a tough word to use there's a big difference between a rich valuation, the u.s. stock market has been richly valued for a while. but there's a difference between that and a bubble. a bubble is specific where you're divorced from any kind of economic reality i don't think we're there yet. if you look at where the markets are globally, it's china that's had the biggest move up. china has been a leader in the global markets china not far up, 11%. people say that's a bubble i don't know these sectors, small cap, u.s. stocks, china, they've underperformed for years and they're finally catching up a little bit i don't think rich valuation is necessarily a bubble that's a controversial word to use.

taiwan is great. look at europe up 4%. the s&p up 3%. and remember, that multiple, the 22 times s&p 50 0 multiple has been coming down recently as earnings have been aggressively coming up on 2021. so bubble, divorced from reality? i don't know again, i think the important thing is that this sort of as part of the growing discussion over how and when central banks around the world should start paring back stimulus that's the real story about what's going on. not so much about whether we're on a bubble but what central banks are going to be doing. elsewhere, we've got something i haven't seen in a while. we actually have an ipo of a fairly well-known company. a well ipo and i don't mean a spac here oscar health is scheduled to price tonight on the nasdaq. this is a well-known, digital health insurance it's been around for a while a nice following price talk 31 million shares at 32 to $34. we'll keep an eye on that. the important thing as david has been covering every single day

so well, the spac business is just overwhelming the ipo business here's the numbers year to date. we've had 260 spacs plus ipos. they've raised about $80 billion. if you break it down, 203 of the 260 spacs you see there are overall coming from the markets for spacs. i mean, essentially spacs are 75% of the dollar volume of all of the new raised and 80% of the spacs versus ipo so the numbers are really overwhelming so far. it doesn't show any signs of abating. david is doing a great job covering that. one old ipo hand i called this morning to ask about the numbers said why shouldn't it do well? spacs are riskless call options. you can get out of the deal and you get to give forward guidance giving forward guidance, that's amazing. you try doing that with an ipo, you'll get arrested or the fcc

is going to call you about whether or not they want you to go public. there's all sorts of advantages that spacs have right now. you can see they're taking advantage of it. back to you. >> yeah. that's a remarkable readout at goldman today as you point out thanks, bob. let's get to rick santelli this morning as well. hey, rick. good morning, carl i really enjoy listening to bob and one thing he said, we need to understand what central banks are going to do to really understand how we're going to see markets behave well, i think it's easy to know what central banks are going to do because the mantra lately from central bankers, they didn't go big enough yesterday i said 1 trillion is a big number 1 trillion seconds yesterday took you back to 30,000 bc 1 trillion minutes takes you back 1,900,000 years ago we need to talk about this every morning. the fact they say they didn't go

big enough, makes no sense at all to me. let's look at the chart. i think central bankers are already leaving an imprint it seems as though the markets are backing away from the higher interest rate scenario look back to last thursday when everything went wild, we saw all the spikes and the dollar index under 90. okay so from 161 here we now hover in the low 140s and if you open the chart up to one month, the spike high that we had, of course, was at 161. and as you look at this chart, you can clearly see that we have started to turn the corner a bit. the high close is 152. the point is i think consolidation for the next week or two or more in treasury yields is potentially probability of high proportions and it's very significant. it's going to take the temperature down a bit and, of course, it's going to let the notion that rates are higher than they were, but the central banks most likely will use qe to keep them from going hugely higher if you look going back to march

chart quickly, where are we going to test if we go back down 120 from the second week of march. quickly, dollar index, going back to thursday as well 91 to 90 is probably the range consider it bounceback nicely but still, can't hold above 91 carl, jim, david, back to you. >> all right rick, we'll see you in a bit rick santelli. look at what the s&p 500 is doing. you have some travel, retail, materials helping out as well. energy, too. some weakness showing up in semis in the early minutes of the session. we're back after a break (vo) ideas exist inside you, electrify you.

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community. they are going to participate in the morgan stanley tech and media conference virtually, but definitely a name to keep an eye on this morning. >> yes it's 38% short, carl when people see that, they think you can bust the sellers now, i have been a huge fan of jay farner an dan gilbert and have had them on and don't understand why the stock didn't react to a very good quarter where they basically laid out a story which just said we can show you how when rates go up, it has not hurt our business when rates go down, it doesn't hurt our business. david, you know dan gilbert. >> i do. >> and you know that dan is a pretty serious fellow into put together a very ksh. >> this as much a technology company, a fintech company one of the largest ipos in auto l a long time, 2020 vin stage, earlier. >> there is a short position the also a convoluted ownership. jay and dan have explained many

times. in terms of defaults, they are the best they have very few and they tracked a lot of people with super bowl ads and, carl, i have to tell you, rocket is a very easy, easy place to get in terms of just the ease of mortgage they don't give mortgages to people who don't deserve it though this is not that at all. >> right on the heels of their first quarter as a public company. guys, dow a little bit mild loss here, down 37. we will be back after a short break. being the global norm, not the exception. at emerson, our cold chain software and technology keep perishable food at proper temperatures, to assure its safety and quality. emerson. consider it solved. hey frank, our worker's comp insurance is expiring, should we just renew it? yeah, sure. hey there, small business owner. pie insurance here with some sweet advice to stop you from overpaying on worker's comp. try pie instead and save up to 30%. thirty

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let's get to jim and "stop trading." >> my favorite executives, jim fid erling, came on "mad money" and said i'm just buying a ton of dow chemical. today it gets upgraded look at this stock it has been one of the greats of this period. this is all about commodities. commodities are going higher dow chemical >> wow, yeah jim, yeah, kmd tease are going to be a stories for a while. what's tonight

>> pse&g i have canopy growth they are going to introduce their case great, no filling, and then for david, i have xl fleet, a spac that worked with pivotal because i know david is so focused on spacs. >> yes, i am >> it's an interesting one the same thing again, you know, another ev. >> short haul, or? >> any haul. >> any haul? got it all right. >> spaclytics, david. >> i am doing sparklytics over here. >> yeah. >> see you tonight "mad money" 6:00 p.m., of course, with jim cramer. good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with morgan brennan and david faber. a little bit more of a muted equity picture than, of course, the monster rally from monday. a lot of stories to watch. we watch earnings out of zoom, target, kohl's and a lot more. our roadmap begins with an historic partnership

j&j and merck teaming up to produce j&j's newly approved vaccine. we have details. >> plus, zoom, shares are zooming higher after forecasting strong revenue growth in the year ahead >> and president biden's financial regulator picks facing the senate spotlight this hour we will bring you the latest. >> all right well, we are going to begin with the markets. following yesterday's rally with the s&p off the best day yesterday since june of last year, alley mccartney and phil ca mpriala join us now to break it down. good morning to you both i will start with you, alia. so much of the focus has been, and i realize that's shifting this week, but so much of the focus has been on what we have seen taking place in the treasury market with yields moving higher. near-term it seems like treasuries were looking oversold you make the argument that equities are signaling we could

see more movement in the bond market and that might not actually be the worst thing. i want you to break that down for us. >> yeah, so, you know, i think that there is this narrative out there that a movement up in interest rates in yields is negative and sort of mutually exclusive for equities but if you actually look at this, take the last 25 years of history and look at those periods in which the ten-year has moved, we are talking about twice what it moved in the last little bit, moved 100 basis points equities have continued to rally in 100% of the cases i think there is that conflict between certainly if we expect major inflation and that is the cause of the move in yields, then that is a negative to the extent that the treasury is focused specifically, the treasury and the feds are focused specifically on that but that's not where we are. we are in a situation where we are all expecting synchronized global growth and that growth is

the reason that the interest rates are moving and so that is going to buoy the equity markets as well i >> you make the point that march 3rd, which is tomorrow, is going to mark the one-year anniversary of the rate cut from the fed in the midst of this pandemic my goodness, what a year it's been meantime, you know, we are getting some bubble-ish warning talk out of a number of entities right now whether it's china, whether it's this indicator out of bank of america as well that we could be close to sell signal how do you see this moment we are in, this market moment we are in, and how are you positioned for it? >> yeah, morgan, talk about a seismic narrative shift. i mean, a year ago it was, oh my goodness how quickly are things getting worse, to today being, oh my goodness, how quickly are things getting better, right i think that is part of this

however, our outlook really relies on accommodative financial conditions the stock market behaving, credit spreads hanging in there, very, very tight, interest rates accommodative and volatility i want to point on that for a second there is still 700 billion in money market funds post-pandemic. if you think about the money that will be put to work from president biden's fiscal plan, we are talking about a $1 trillion just sitting on the sidelines waiting, waiting for any pullback to jump in. but really the reflationary theme is alive and well. all reflation means is that you have low inflation rates and the fed upping their targetthrough their average inflation framework. what we are looking at is pro-small cap driven by the best growth we will see in the united states in 35 years so that's something that investors should certainly pay attention to and then the emerging market

equities team is alive and well in that kind of for mated gloglobal growth theme this is pointing out to be a really, really good year, a dramatic return to normalcy and reopening, and all of the things to be excited about within the equity market. >> alli, right before you came on this morning u.s. chamber of commerce, which has been pretty constructive regarding the administration's legislative priorities has a statement saying that the stimulus bill as it is now fails the test because the average american household is so strong, the savings rate is so robust, even state and tax revenue pictures much better than we thought it would be a year ago i wonder if you think that's a comment that adding stimulus on top of this economy is too much. >> look, there is clearly a -- from this administration that they would rather do too much than too little. i think all of the commentary,

and you have focused, done a great job on the network to focus on this. the difference between "the haves and have nots" in our world is extraordinary when you talk about 10% of people are out of work, when you talk about housing in certain areas that is more expensive, not less, when we talk about hedge fund managers where they are concerned about input and transport prices from china, there are some people who, yes, are saving more and more there are a lot of people who need a bridge. and remember, we called this stimulus four, called it a bridge, that need a bridge until we have all of those jabs in the arms, companies putting jabs in our arms to get out there. and i think that, you know, our position is, is very similar to janet yellen's and to the federal reserve, which is we would rather do too much than do too little and continue to

stimulate the economy and stimulate that cyclical rotation into global growth than do too little and have us go back to another recessionary period. >> phil, on that front, if in fact that's what happens, where do commodities fit in as a good note out of goldman today saying that 12-month commodity basket they are looking for returns of 15 given what's -- i think they said every market except cocoa and zinc is in a deficit. >> yeah, carl, that's supportive of our macro drop back i want to differentiate, inflationary world where kmood tease are on fire versus this kind of reopening and back to normal theme where commodities are in high demand that story is really, really sup supportive of the macro backdrop along with the steep yield curve taking place since november 9th kind of pfizer announcement as

well as the earnings the one risk we would watching is how is all of this fiscal monetary stimulus, vaccine rollout playing through to earnings and that's probably the biggest hurdle if it doesn't play through to earnings, and again nothing that we've seen would say that it's not, but if it doesn't play through to earnings and valuations are too rich. our base case because of this incredible boost, tailwind we are seeing this year and things get pack to normal, that's going to be a very supportive earnings environment, supports multiples where they are even on small cap. i know small cap is up 10%, but we lean that that trade and large cap value. we are playing that more than ever in our funds. >> all right we will leave the conversation there. guys, thanks for kicking off the hour with us alli and phil. >> thank you in the meantime, guys, we are keeping an eye on senate banking. a locus of news last week with chair powell today it's a confirmation hearing for the president's

picks for financial regulators we'll look for gary gentzler, rory chopra, david as we were saying with jim, gentzler is watching multiple pots bailing as he monitors capital markets. >> the emergence of reddit and the wallstreetbets community and what that's meant to the movement in certain stocks and to the robinhood platform. we could go on and on. but he is clearly following it closely, one would imagine, morgan the question is whether or not when he takes over leadership at the s.e.c., which is expected fairly soon, there will be a particular focus on that >> yeah, absolutely. it seems like payment for order flow, the gamestop stuff more broadly, climate disclosure seems to be on tap based on some of the comments we have gotten from centers that might be involved in the questioning, increased disclosure of corporate political spending, stock trades, and let us not

forget cryptocurrency and bitcoin which is something that, obviously, he knows quite a bit about as, i think, the market attention or the market expectation continues to grow. they could fpotentially see a bitcoin etf here in the u.s. sooner rather than later, carl >> yes yeah, that was one of the headlines that raised some eyebrows yesterday that would be amazing for a lot of investors who believe guys, still to come, a mega farmer partnership, merck and j&j are teaming up to combat covid-19 and produce even more of j&j's new away proved vaccine. g owti aads about that. bish sllhe a"squawk on the street" rolls on.

president biden is set to announce an historic partnership between merck and johnson & johnson. meg tirrell has that story for us. >> while merck is set to help manufacture the j&j covid-19 vaccine, that's according to a report from "the washington post" and confirmed by nbc news, now this deal is expected to be announced later today brokered by the biden administration according to this reporting, which also says that they put it together amid concerns when they came into office about production delays for the johnson & johnson vaccine. now, merck is set to dedicate two u.s. facilities, one where they will fill and finish, essentially putting the vaccine into bottles, into vials, and one where it will make the vaccine itself it could take several months to

get these facilities online, so we could start seeing this contributing to supply sort of later in the year. but they are reporting this could as much asdouble the output of the j&j vaccine. we don't know how much johnson & johnson has said it is on track to deliver 100 million doses to the u.s. by the end june even before this. and has set a goal of 1 billion doses worldwide by the end of the year we reached out to both companies. j&j declined to comment. merck saying it remains steadfast in their commitment to the global response to the pandemic and preparing to address future pandemics merck was developing two covid vaccines itself but stopped development of those as they saw early results suggesting they didn't generate a strong enough immune response. we talked with j&j's ceo yesterday and asked him about manufacturing of the vaccine here's what he said. >> whenever you do something like this, it's never a linear shot you are always going to have it. that should reinforce our commitment to quality, to

following the right processes, and we're very confident in our ability to hit the objectives. >> guys, experts in the space pointing out to me ramping up manufacturing to this kind of volume is something that normally takes five to eight years. so what we are seeing really is kind of miraculous and "the washington post" article pointing out it signals confidence in the j&j vaccine and perhaps that the biden administration sees a bigger role for it as they want to help ramp up supply david. >> meg, thank you. and that is a good place to start with our next guest. ameri-source ceo steve collis. playing a key role in vaccine distribution through pharmacy programs and good neighbor pharmacy network we heard meg talking about what is potentially going to be a lot more vaccine available given manufacturing. does the distribution system of which you play such an important part, is it going to be able to keep up? >> thank you for the question, and good morning and welcome

good to be with you. yes, the distribution system has p performed expertly throughout the process. it's about a year now since i was on the showism couldn't be prouder of the way our industry met our challenges sometimes it gets surprising when you hear experts talking about a distribution problem there hasn't been a distribution problem. our industry is haey highly efficient and accessible to patients and hospitals and pharmacies i believe that distribution has continued to play a key role and could potentially do a greater role in the future. >> >> yeah, all right. you say people are mistaken when they say there has been a distribution problem right now it feels like there is a lot more vaccine out there becoming available every day, but to the extent that there was a problem, then what was it, steve? >> so, obviously, if you look at the fact that we are not even quite three months into this and nearly 15% of americans have been vaccinated, you know, whatever was available got out very, very quickly

and i do believe though that we are going to have a critical shift between demand and supply in the next couple of weeks. we really should look at all different access points to get the vaccine out into the pharmacies and into physicians, officers, all points of care as soon as we can and then looking at the most efficient ways that is often using the existing distribution systems so, you know, if they are at that inflection point, i think we should be looking at a broader distribution strategy. >> just to dig into that, this is morgan, just to dig into that a little bit more, when do you think the general public is actually going to be able to get inoculated, and just how many vaccines or how much supply in terms of that shift do you think we could have within the coming weeks, within the coming months, especially when you have comments from other vaccine developers right now like novavax as well? >> well, you know, novavax will potentially be the fourth. i believe that they are next up. i think it's miraculous what has

occurred as we talked about. listening to your segment just a little bit before i came on, you are hearing about the capacity, the incredible feat that was accomplished this weekend with a partnership between merck and j&j. so there is an unprecedented time of collaboration across our industry every year our industry distributes about 170 million. in fact, this year as the most ever so we can do this. and we just need the supply. the manufacturers are ramping up incredibly i think you will see things change a lot over the next couple of months provided everything keeps on track and we don't have any mutations i think you will see things -- i think you will see a lot of the population really getting vaccinated over the next couple of months. >> yeah, we have these national pharmacy chains that, obviously, have scale we have bigfoot prints, the logistics behind it as well. you are very focused on working with the independent pharmacies. today there was a "wall street journal" report about the data

that some of the big companies are able to collect in all of this what is the benefit, what do the independent pharmacies bring to the table that maybe the big guys can't in the process? >> we operate good neighbor pharmacy, which is a corporate, you know, customer resource center for independent community pharmacies as we already presented to the cdc, the capabilities and the reach, including in some of the most socially vulnerable and economically vulnerable areas, that they really want good neighbor pharmacy and pharmacies like our pharmacists to be involved in this program so, you know, we have been proud to play a small role hopefully, that expands as more vaccines become available. right now we are in about five states our pharmacists are doing very well, adapting their environment to serve the patients' needs and they have to run their businesses these are independent businesses so think about the challenges that they are tackling and successfully overcoming every day to administer patients

so we have pharmacists that are receiving the product at 3:00 in the afternoon and giving the first shots at 3:30. and to the three weeks we have been doing the program, our pharmacies have shown that they are able to distribute and administer all of the doses that they are receiving within a week before they get the next week's supply >> steve, yesterday the white house press secretary said that in her words, we will reach that point in time when vaccine supply in the u.s. exceeds demand and i sent out a few emails asking people when they thought that actual date would come. generally, speech responded by saying late april or may i wonder if you have a problem with that timeline. >> yeah, you know, again, i don't control the manufacturing process. we work with the fda approvals but we are so proud to be working with the companies in a un u way. the covid-administered therapies, not just the vaccinations, but the therapies

so helpful in treating the most sick patients. we have been working with the administrator and distributor for the programs i think it's done a lot of good. now when you look at the vaccinations and the possibilities that those have, i think based on the manufacturing schedules that we are hearing from the three that already approved, that, you know, that sort of timetable, you know, 60 to 90 days out, seems like it could be a very interesting inflection point we are approaching an inflection point. i think that could be a point where we have over 100 million people vaccinate the based on what we are hearing on the production part >> that's good news. we'll leave it there always appreciate your joining us thank you, steve. >> thank you for the opportunity. it's a pleasure to be on well, time for our "etf spotlight. a look at the first trust dow jones internet index fund, up nearly 6-5%. one outperformer, zoom video

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elizabeth warn on "squawk box" talking about her proposal for a new ultra millionaires tax. robert frank has more. good morning >> good morning. carl well, the ultra millionaire tax would be annual tax on total wealth rather than an income tax. it would be 2% on all wealth over 50,000,003% on all wealth over a billion about 100,000 households would pay the tax. so that's really about the top 0.5% warren saying it would raise $3 trillion over the next decade to pay for child care, education and infrastructure she said this morning that since billionaires have gotten

$1 trillion wealthier during the pandemic, it's time for them to pay. >> a direct wealth tax, a 2 cent wealth tax, is what yields the revenue. the revenue that we need just a straight across the board. it's the fairest, it's the most progressive, and here's the thing. it helps level the playing field just a little bit. >> critics point out a wealth tax may be unconstitutional. most european countries have actually gotten rid of their wealth taxes because the wealthy simply moved or avoided the tax. warren has a plan for that, of course, to help prevent avoidance. the proposal what give $100 billion to the irs for stronger enforcement she would have more annual audits and an exit tax of 40% on the wealth of those who try to renounce their citizenship billionaires would actually account for half of all revenues just as an example, jeff bezos would owe $5.7 billion under the

tax for 2020, elon musk $4.6 illion, and bill gates $3.6 billion guys, a drop in the bucket for these billionaires you look at how much is rely act on the stock market and this would be a volatile source of revenues back to you. >> right the guys on squawk made the point, of course, some people who hit a number and then decline as a result of the mark-to-market on their positions at any time could be facing a tax and then the next year, obviously, have far less money. robert, nobody thinks this is going anywhere right now, but warren is a very good communicator and the conversation is going to continue, one would expect >> yeah, look, this is basically the same tax that she advocated during her campaign, which drove her very successful early run, and now it's taken on new meaning with the pandemic where we have had this k-shaped recovery where the billionaires have gained over a $1 trillion in wealth since the pandemic

last march a lot of americans still out of work a lot of food start amgs so i think this is driving the conversation and perhaps could help even the moderate democrats move towards warming up towards a potential tax increase if we are lack at the next infrastructure plan where they want to bring the corporate rate to 28% and perhaps the individual income tax up to 39.6, next to a wealth tax those look moderate. >> that's going to be key to this, right, what kind of traction it generates. robert frank, thanks for bringbring us the latest. we are watching target look at that stock sales rose more than 20% getting a boost from post-holiday shoppers. digital sales more than doubled again. the stock up more than 70% the last 12 months under some pressure this morning, though. we'll be right back. stay with us

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welcome back i'm rahel solomon. here is your cnbc covid update global airline traffic hit new lows in january as covid variants promptled new travel restrictions around the world. the international air transport association says that traffic was down 86% from pre-crisis levels, although in the u.s. domestic travel improved with a group calls a slow pace. and airplanes may not be carrying a lot of passengers, but they are delivering vaccines today nigeria received its first shipment, almost 4 million astrazeneca doses. and iraq has received its first batch of vaccines donated by china. it was carried by an iraqi air force plane. this shipment was 50,000 doses, but 2 million more are on the way. cases there are rising sharply as new variants emerge you are up to date back to you. >> thank you. of course, the vaccine is going to have huge implications for the way in which the u.s. economic recovery continues.

steve liesman is back with us, has the latest road back barometer. i heard you talking this morning about the vaccine trend and at least from looking at the numbers sounds like you are truly optimistic >> yeah, the data is pointing me that way, carl take a look at this and see if you agree at the end of it the u.s. vaccination effort looks to be back on track. it was derailed from the winter storms and even while case levels remain high, models are suggesting we are on track for some form of herd immunity by the summer and that means a return to more normal economic activity by the grace of god 15% of the population has been vaccinated that's double the percentage of a month ago and it's accelerating, 77 million doses have been administered that's 78% of those distributed. the combined u.s. vaccines nation rate 44%. that 44% en route, hopefully, to 75 to 80%, which is the benchmark economists are using for the estimate of herd immunity looking at that, the u.s.

percentage actually leads advanced economies according to goldman sachs partly because of vaccinations but also because of the infection rate so high the u.k. is second there i have updated numbers actually at 47 the u.s. is number one, but not for all the best reasons that high infection rate makes it high. l looking at distribution, picking up as the systems improve. logistics, that is also a rebound from the storm disruptions. morgan stanley estimating 78% of viruses distributed have been administered and now the best news of all there is some initial signs the vaccine is actually working as the percentage of deaths from nursing homes plummet. that's amid a broader decline in deaths elderly deaths peeked around 7,000 a week they are now around 200. they are running below the model. another sign of the positive

effect of vaccines despit despite plenty of risks from various other fatters, the u.s. looks to be on track for a midsummer reopening. that's the basis for the economic turnaround that wall street and the nation and we're all expecting. karm, did i convince you for a little optimism there? >> i was already with you, steve. but, yeah, i mean, andy slavitt i saw this morning tweeted -- at least about the nursing home front, he said looks like a trend. incredible we can only hope it will continue steve, thanks. a great setup for the next guest. he speak being of morgan stanley, a new piece out looking at pockets of opportunity in post-covid world adam, good to see you. >> carl, good to see you thanks for having me on. >> part of your larger point is that even if you believe we are entering a new era, it's not going to be as simple as buying the index. >> i think that's fair i think part of the reason we wrote the report we did was to make the point that as steve said, reopening is happening

it means you are at a bit of an inflection point at the index level that may be price. over the course of the year, the bull market is really about a bull market in stocks, not the stock market so we trade to get at a framework for trying to think about where that reel opening is perhaps underpriced and an overextrapolation of covid benefits in the price of stocks. >> all right we are looking at some of your areas in which you think there is potential upside surprise a lot of it makes sense. energy, obviously. consumer finance talk about those and then we will get to areas where you think investors have a sense of overpromise. >> sure. so happy to do it. what we tried to framework, carl, was to say where are expectations high, in other words, where is the market expecting the rebound, and where are stocks de-rated or re-rated. and on those two vectors, we ran it across a number of different sectors. energy, consumer finance, advertising, gaming, all areas

that came back kind of at a higher hit rate of stock that may fall into the bucket where the reopening could deliver upside surprise. two examples have been the sectors you mentioned. we talk about consumer finance we added financial to our buy list here at morgan stanley. the reason is as the economy reopens we expect that consumer losses and consumer credit begins to abate as you see the economic rebound continue to add jobs and consumer balance sheet continues to remain very well supported throughout the covid crisis in the aggregate due to the amount of fiscal support we think higher rates could be a driver there on the energy front we like exxonmobil as a free cash flow generator. a tremendous job trying to lower costs, lower capex supply demand picture in oil titans, we don't think there is credit in the stock price. it comes down to stock picking in the sectors you know, we like these two

examples. >> so, adam, i mean, for months now we have been talking about what's priced into this market or what is potentially going to be priced into this market in terms of another round of fiscal stimulus i mean, we heard that optimistic report from steve, the possibility of herd immunity by the grace of god around the corner you have the u.s. chamber of commerce this morning issuing this statement about, you know, the idea that stimulus maybe needs to be more specifically targeted, that economic rebound, economic growth could happen in more strongly, more quickly than previously anticipated so just looking at your methodology and how you have come to these stock picks and your assessment of the market right now, how do you see it, how does that fit in, what do you think? >> right what i would say is i'd go back to the point on all estimates we think the amount of stimulus already delivered, has given the u.s. consumer in the aggregate somewhere in the neighborhood of $1.5 trillion more in savings

than they would have had on the run rate had covid never happened which is a fairly large buffer for consumer demand. when you add to that, we think pentup demand. people want to go out. they want to spend they want to re-engage with the world. they want to consume services. that gives you a cushion to do so if we talk about an incremental, 1, 1.5, $1.9 trillion in spending you are going to expand that capacity to spend certainly, but i would say the marginal propensity to consume for that stimulus perhaps lower than what we expect from a stimulus package that size given the safety buffer there. certainly a stimulant, a backstop for the more vulnerable population of the economy, which we think helps, but it doesn't really do anything to change the view on reopening happening and a strong consumer demand picture out of it. more augmentation on the margin. >> i realize you touched on this, but to dig in a little more deeply, what does that mean for these companies, some of

these stocks that have been particularly big beneficiaries of the dynamics of the pandemic? is it time for us to perhaps think a little differently about durables or consumer staples given the societal shifts we may see from this? >> it's a really good question it's one we have wrestled with what you have to be asking yourself, does the economy, the second half of '21 or '22 look more like 2019 or 2020 t if the answer is 2019, you have to question how durable it is. now, in some cases we think it will be durable. the pull forward in e-commerce we think is more -- to this day. the digitization of the consumer wallet is a trend. where i get a little bit concerned is the areas you mentioned, right at-home consumption, nesting, durable goods purchases, et cetera where it gets a little bit tricky is you have this tug-of-war between the tough comps and the pull forward demand along with a generally

positive economic momentum swing. so you do have some typical momentum so on this, right, the durables that were beneficiary is to be a little bit more selective. and watch for the market reaction on stronger earnings because if they begin to get faded you have your answer coming from the market as to how willing the market is to further capitalize further benefits from the covid economy. >> don't you have momentum already for some of the names that you are looking to benefit from the reopening it's not as though many of those stocks have starrted to trade higher on the prospect of that reowning, and i wonder whether that is a risk. >> you do. that's why we tried to framework things to look for stocks relative to the market had continued to de-rate so when you look at our list of concentration, upside surprise potential, you will see a couple of notable absences that most people would tie to a reopening. airlines, restaurants. it's not to say every stock in

the group is re-rated, but many instances a good number have re-rated relative to the market. in other words, you are paying more for a lower earnings raise, which says your point. the market is underwriting a recovery there you maybe don't have as much upside off the bottom. so just pick on food service a little bit while many restaurants have re-rated, food service distributors, the companies that provide the food to the restaurants, they as a group have night yet participated to the same extent, which goes back to the original point about stock selection and being careful with this reopening because much of the upside across the market has been brought in in a more optimistic fashion. it's more nuanced for the next part of the trade. >> it's a really cool note really nice way to frame where the market is right now, adam. always good to see you thanks for the time. >> thank you very much. >> as we head to break, watch rocket companies today

soaring again this morning up more than 45% since reporting earnings last thursday rocket is also in the top five most mentioned stocks on reddit. as you can see, it's up 22%. ckn monte y?moji, dare wsa ba ia me

why pnc's top strategist is telling investors not to bail on big tech as the economy reopens. that story and more on tradingnation.cnbc.com more "squawk on the street" ahead.

- [narrator] grubhub perks give you deals on all the food that makes you boogie. (upbeat music) get the food you love with perks from- - [crowd] grubhub. welcome back to "squawk on the street." i'm dominic chu. stocks pulling back at this hour near the lows of the session as you can see here, from a sector perspective though, it's the materials stocks that are the relative outperformers and that group is being pushed higher by companies like a fertilizer producer in mosaic. also chemical makers, as you can

see, very much in the green so far. but dow is also an outperformer after analysts at wells fargo upgraded to an overweight waiting on chemical prices because of the texas deep freeze a couple of weeks ago. watch those particular stocks there. now i will send it back to you guys david faber at "squawk on the street." >> thanks. that move in dow, i hadn't noticed that recently. our kayla, she is monitoring the senate confirmation for president biden's financial regulators good morning, kayla. >> reporter: good morning, david. those are the nominees to run the securities and exchange commission and the consumer financial protection bureau. gary gentzler and rowet chopra, appearing before the senate banking and housing committee. they are two independent agencies expect today take a pro-regulation turn under the biden administration, and in advance of questions about a surge in retail trading and the spake in cryptocurrencies, gary

gentzler, a familiar name to cnbc viewers, nominee for the s.e.c., is fielding questions about how he would regulate markets and specifically the very first question he fielded was on gamestop. >> well, we take our eyes off the ball, when we fail to root out wrongdoing, or adapt to new technologies or really understand novel financial instruments, things can go very wrong. and when that happens, people get hurt >> reporter: so he is talking about the need to protect consumers. he was critical of the gamification of a lot of these apps, but some of the other issues that are going to figure very prominently not only in a potential agenda of the s.e.c., but also in today's hearings are the s.e.c.'s efforts on climate. a broad effort underway to require new company disclosures on climate risk and sustainability efforts

then chopra, figuring prominently in questions from democrats, forgiveness of student loans and bad debt from republicans, his nomination in the place of president trump's cfpb director who was fired with three years left in her term there are going to abloft different questions fielded by these two different nominees they have one thing in common. despite some of the curveballs expected to be thrown today, both of these gentlemen have been confirmed in the past and not only confirmed, but with broad bipartisan support gentzler confirmed to lead the cfts in 2009 by 88-6 chopra to serve on the federal trade commission unanimously in 2018 back to you. >> all right a lot to watch there, thanks we will take a break here. after the break a closer look at some of the names in cannabis. a day after virginia becomes the 16th u.s. state to pass adult use.

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welcome back take a look at cannabis stocks shooting higher again today. our next guest is taking his company public the deal values at just under $2 billion. joining us now, the chairman and ceo. great to have you back on the show >> thanks. glad to be here. >> so why go public now and why do it via spac >> going public now, the timing really is right for our company. we've been, you know, quietly for the last couple years building a strong scaleable foundation for our company we've been developing and building a fantastic management team with a bunch of experienced leaders. we have a great footprint and are also building out r&d. so all of the elements are in place now. we wanted to stay low profile and let volatility get out of the marketplace over time, and i

think people are beginning to realize that there's -- you need to be a more sophisticated investor when looking at cannabis companies we like that because we feel we have a really great runway ahead of us, and it gives people an opportunity to evaluate us on fundamentals so having a public currency enables us to grow organically but also access inorganic opportunities as well. >> the first that we see publicly traded cannabis companies right now moving higher virginia, the latest state to pass the 16th state here in u.s. to pass use for recat areationa marijuana. we haven't spoken to you since we saw a new administration officially enter the white house. since we saw the senate become

democratically controlled at least narrowly what is your take, not only on more states legalizing but also on the possibility from a federal perspective of decriminalization and even legalization >> right so, look, i think there's a couple ways to look at it. certainly we'll see more states continue to legalize marijuana, some medical, some adult use i think from a federal standpoint we'll see some relaxation of rules, especially as it relates to banking and some of the ancillary services which will allow cannabis companies to function more like normal businesses. they still need to address some of the tax elements that will be important. i think one of the key things that will happen in the shorter time frame as opposed to federal which will be longer is some of the states will hopefully become more business friendly and realize that this is a business that can create jobs, can create

tax revenue, that their constituents want and smart thing to do is to allow a fundamentally business friendly regulatory environment for these companies to play in otherwise, you're going to have people going to the black market and doing things none of us want >> you have 50 stores nationwide what is the average revenue and profit margin in those stores and what are your expectations in terms of potential growth over the next few years? >> well, we don't get into specific numbers at this point we'll be more specific when we become a public company which is anticipated to be later on this summer that said, you know, it can vary a bit by store we're careful in curating and being thoughtful into where we place stores it's not about the number of stores it's about the geographic location of stores so that's really how we look at it >> are you going to buy more of them with that currency you have

or expand your footprint significant? . >> we have a combined strategy we'll expand more stores we'll selectivity get into more markets to expand our footprint but we invested a lot in r&d there's so much technology and capability that can go into some that people aren't really working with yet that can derive enormous well-being benefits to people going forward we're going to best along all those areas and we just need dynamic growth going forward >> we're up against the end of the hour very quickly i know you have a lot of interesting products that you are developing, are we going to see a gum from you? >> not any time soon i never say never. you will see beverages and other exciting things from us for sure >> come back and talk to us more about those in-depth in the meantime, thanks for

joining us >> thanks for having me. appreciate it. when we come back, don't miss c3's ceo. "squawk alley" starts on the other side of this break don't go away. so you're a small business, 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.

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good morning it is 8:00 a.m. at microsoft's headquarters and it's 11:00 a.m. on wall street and "squawk alley" is live. happy tuesday. welcome to "squawk alley." ahead this hour, an exclusive with c3s ceo how clubhous