sector in the s&p right now after we saw the banks sell off yesterday. again, that rise in yields, i think, giving wind to some of those stocks right now frank, overall, great to sit and do "power lunch" with you. >> we got some space talk in, some transports talk in. >> it was a full menu, so thanks for watching "closing bell" starts right now. >> it sure does. >> thank you, morgan and frank welcome to "closing bell." i'm sara often along with wilfred frost. stocks are well off their lows as we head into the final hour of trade the nasdaq has been down more than 1%. it's been gaining ground throughout this session. yields remain in focus with the 10-year yield hitting a 14-month high before pulling back this before an infrastructure speech by president biden

tomorrow consumer confidence is posting its best number in a year reopening plays moving higher after the release, but growing concern about a new wave of covid infections keeping sentiment in check yesterday the head of the cdc warned of feeling of impending doom, and there are fresh worries about virus mutations and the effectiveness of vaccines we'll review that in a moment. 59 minutes left to go. wilfred, russell 2000, small caps, only one of the four positive. >> it's still down a percent so far this week with those declines yesterday ahead on today's show, former mike pence chief of staff marc short will join us to discuss an effort among top republicans to fight back against president biden's tax agenda. plus an interesting mix of earnings set to be released after the bill and could provide insight. we'll hear from lululemon, reddit, and chewy.

we'll speak with the chewy ceo whose stock more than doubled in the last 12 months let's focus on the mbig stories we are watching. meg t irrell and jeff degraph. let's talk about rising rates and the impact on stocks, jeff we're seeing another day of weakness here for stocks is there something in the charts that you're looking at that shows a broader trend shift, a cycle shift after a tremendous run-up from the lows just over a year ago now >> yeah, sara, last time we were on we talked about high duration assets versus low duration assets and you're seeing that continuation and playing itself out through value versus growth. but one of the primary things that we watch is cyclical names versus financial names what sectors respond well to economic growth, what sectors are really impervious to

economic slowdowns so far what we continue to see is cyclicality is leading defensives the trend is still very, very strong historically what you tendi to see, but historically we find that cyclicals tend to give up the ghost before defensives do and that tends to be a leading indicator by as many as three to six months of a peak in yields so i think you still have creeping higher yields i think they have helped to cat lies the shift when we look at things like the relative performance of discretionary names, they still look fantastic and are one of the leadership groups of the market >> so if we're going to continue to see rising rates and you don't think it's going to derail the entire market, is it going to derail the growth names, the nasdaq, the technology sector

which has come under pressure? >> i think you have a continuation of the shift. in our work we had a sell signal last week. but overall in tech we saw a relative performance breakdown in the tech sector and that's important that doesn't mean that you have absolute losses, but it means it is now a laggard or considered a laggard in our work. so i think you've seen that migration. but importantly at the same time discretionary is holding up. things like industrials. you were just talking about transportation names transportation names are at a new relative strength high so it's not choking off economic progress or growth, it's just hitting that flavor, if you will, which is high duration or growth assets versus some of the cheaper assets out there. >> looking at expectations for economic growth and whether they're getting a little ahead of themselves? >> well, actually what's

interesting is almost all of 2020 what we saw, wilf, was data outperforming expectation, right? so people sit around and scratch their heads about how could the equity markets be doing so well. the data was better than our expectations as this starts to normalize and as expectations start to get relatively abundant, if you will, maybe the data doesn't live up with those expectations and that probably would put some pressure on equity markets we're not at that point yet, but i think it's absolutely critical to be watching this over the next month to three months where expectations and data start to meet and whether or not the data is not as fulfilled as expectations we're not there yet but something we're watching >> jeff, a lot of talk about how some of the biggest outperformers over the last 12 months, the smaller cap tech names have started to pull back

significantly. what about the big cap tech names, the faang names and companies of great size that aren't that expensive on a pe basis. are there any of the charts of those stocks that look a little more concerning? >> i would say amazon is the one that seems to be the big laggard but that's not a big surprise to us given where it was a year ago and the retail savior with home delivery and everything else when we go through and look at the facebooks and googles of the world, those are still good uptrends they're not high beta tech names so they're going to underperform when you get that shift that's happening. but i think the absolute trends in those names are still intact and still look good. i just think on a relative basis, you're going to have to sit on your hands and wait for those to come back into favor. it depends on tax gains, et cetera, what you have in those names but i do think you have a period of underperformance but not a big period of vulnerability as we look at

those names. >> there's been some questions, jeff, and i know you like cyclicals, about whether the money chasing some of thos groups has been as speculative as some of the money that's chased the high growth names in this liquidity filled environment. do you think that that's true? >> from what we're seeing, not so much. one of the ways we measure that is high priced versus low priced performance. we're not seeing an outsized representation of low priced names. at the margin maybe there's some but there's not enough to make some big call that there's too much too fast and therefore it's really, really dangerous in fact one of the charts we were going to show is there was 93% of the s&p 500 constituents above their own 200-day moving average. people might call it overbought but if you look at the stats, when you get that number above 91%, it's a pretty good number for forward returns.

so i think there's enthusiasm in the market i think people are certainly performance chasing to a degree, but it hasn't got to the point in our view with the work that we do that suggests that it's yet at a dangerous level. >> jeff, thanks for joining us much appreciate it. >> thanks, guys. meanwhile, there's growing concern about rising coronavirus cases in america after the cdc chief warn the country could face impending doom. meg tirrell has the latest on where things stand hi, meg. >> hey, wilf, we really are in a very strange situation right now where there's so much optimism around vaccines as almost 3 million people get shots every day here in the u.s. and as we're starting to see cases rise again. that's what the cdc director was getting at yesterday if you look at just what we've seen in the month of march, cases are up 12% on the seven-day average to more than 61,000 daily cases getting recorded hospitalizations have been declining but that has leveled off and the same with the numbers of deaths being counted

every day. about a week ago that started to level off. it's now about 1,000 every day dr. walensky, the cdc director, yesterday warning we are seeing hire levels of travel than we have seen throughout the entire pandemic i spoke with dr. fauci yesterday about what he's most concerned about and he echoed those concerns about what they're seeing around the country. here's what he said. >> what you see on television today spells itself out in effect two weeks down the pike, three weeks down the pike, so we're really concerned that we haven't seen the full impact of spring break and we might see that in the next few weeks that's why we're saying please be careful don't throw all caution to the wind hang in there a bit longer >> guys, this also coming amid tremendous optimism around the vaccines and progress on that front. biontech, pfizer's partner, reporting earnings this morning.

one notable headline, they're increasing their manufacturing forecast capacity to 2.5 billion doses. they only have contracts for 1.4 billion right now but that's up from a little more than 2 billion they thought they could make in 2021, so really increasing their at least ability to vaccinate the world, guys. >> meg, i didn't know where to go with this i'm going to gloss over the further bit of bad news on the astrazeneca vaccine from germany today and ask more broadly about how much of a pickup in cases we want to make sure we avoid seeing here in the u.s. to have to start raise the question that the level of vaccination that we've got to isn't really making the sail level of difference as we hoped it would have done? >> well, it's an interesting question and one good thing is that when you look at the data and dr. gottlieb has dug into this himself as well, you do start to see older age groups are better protected now almost 50% of people over 65 are fully vaccinated so you are starting to see the

hospitalization and death rates improve for older people the concern, of course, is that as case increases are still happening, that's affecting younger people and so they are going to the hospital. dr. fauci and others warning young people are less vulnerable to severe disease, but not not vulnerable to severe disease so we have to be careful until everybody gets covered. >> meg, thanks so much for that. after the break, the short story on higher taxes. marc short, the former chief of staff to vice president mike pence part of an effort among top republicans to push back against the biden tax agenda he'll join us to discuss your watching "closing bell" on cnbc

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leaders have formed a coalition to fight proposed tax hikes. joining us marc short, one of the partners in this coalition, who was the chief of staff for former vice president mike pence. good to see you, marc. thanks for joining us. >> thanks for having me on this afternoon. >> i guess my first question is whether if more stimulus comes you think it should be unfunded or that more broadly you don't think there should be no stimulus and hence no tax increases? >> well, i think there's a questionable debate as to whether more stimulus is needed. as you know, even before the most recent covid relief bill there was a trillion dollars left over from up spent resources in the previous bills so there's a lot of stimulus i guess i just view this differently. it's less about stimulus the reality is that with the tax cuts that were engineered by president trump, we actually created more than 5 million jobs in two and a half years before the pandemic hit

unemployment was at all-time lows for hispanic americans, for african-americans, and at 3.5% was at a 50-year low our economy was booming to bringing down the corporate rate to actually just the middle of where organized developed countries are. of the top 35 countries when you brought it down to 21%, there are 16 above you, 19 below you you're right in the middle and so why we want to say we're going to bring it up to 28% and be among the top four in the globe and be competing with other socialist economies doesn't seem to make much sense and will be a terrific job killer >> moving forward, though, i guess -- no one likes taxes going up, but maybe the corporate tax -- >> but the biden administration does clearly >> in response to spending they like spending money as well let me put it this way are there any taxes that you think do warrant an increase if we talk about the step-up in

capital gains, inheritance tax, if it's not the corporate rate >> certainly i would not be advocating for tax increases right now. i think the reality is that after the trump tax relief, you saw general revenues increase to the treasury the reality is we don't have a revenue problem, we have a spending problem in the united states the way to fix that is to reduce spending it's not to say we're going to keep taxing americans more and thereby actually killing jobs. >> marc, one of the problems with your argument is that we're in a very different place. one of the big risks in the market is that the economy is going to overheat, that it's getting too strong and we're going to see growth rates that we haven't seen in years because of all the stimulus we've had and the vaccines we're having and the opening up and everything like that so are you really worried that a corporate tax rate going up a few percentage points is going to kill growth in jobs >> absolutely i am i don't think it's only a few

percentage points, i think it's the proposal of 7. you know "the washington post" has reported they are looking to increase tax revenue by $3 trillion if you increase that corporate rate from 21 to 28, the best estimates is the most you'll get is $750 billion. i know it wants to be sold as it's simply a tax on the rich or tax on corporations, but it's a tax across the board that's going to affect all americans. i think the worst thing you want to do coming out of a pandemic is increase taxes in ways that will kill jobs. >> what is your view on the step-up basis on capital gains >> i think that you should be continuing to reduce capital gains as much as possible, wilf. the reality is why you're taxed for that transaction doesn't make sense you're taxed on the corporation you're invested in and also taxed on your income it seems like a double tax to me. >> albeit stocks that are taxed

have risen astronomically fueled by central bank stimulus and it is a clear example where the haves in society have benefitted much more than the have nots that don't have substantial savings. in a perfect world taxes don't go up but there has to be something to redistribute that imbalance. >> that's a fundamental difference i don't think it's the government's job to redistribute those resources. as we look to try to provide an equal opportunity, it doesn't mean equal results all the time. i think the question probably is more of a monetary question in my mind more so than a fiscal one. i do think that you're right, the reality is by having artificially low rates for so long you have created inequity where the people who were able to take advantage of that most is because they're able to leverage it at such cheap debt rates. but i think overall the solution is not to say we're going to tax

people more, the solution is to fix the monetary policy. the fiscal solution should not be to raise rates in ways that, again, are putting people out of jobs to say that it's limited to the rich, there's no way you're going to raise $3 trillion in resources by targeting it that way. it's going to be across the board and all americans will be impacted >> just on the overarching point, marc, we need infrastructure spending in this country, don't we? it's something that you guys in the trump administration wanted to get done. so don't we have to figure out a pay to pay for it with the deficits ballooning into the trillions like we've seen? >> sara, it's a fair point i think what we've proposed in the trump administration, obviously we were not able to get it done, was more of a public/private partnership you'd have a partnership to put up the resources i don't think having it funded entirely by the public sector is the solution as you said, it will create continuing ballooning deficits

as well more stimulus will need to be paid for. >> just to round things off, marc, what would be your main focus, your ideal tax you don't want to see go up and what is your expectation of how things shake out here do you feel like you're up against it to stop this process? >> well, sure. i think the reality is that with democrats controlling the white house, the house and the senate, they have the upper hand but at the same time, their margins in the house and the senate are pretty narrow in the senate in particular you have several new members who were not here in 2017, did not vote one way or another. senators in arizona, both senators senator in georgia, senator warnock, a senator in nevada i think additionally that senator manchin has expressed reservations already about going up to 28% and wanting to find something in between so the reality is that, yes, the democrats have the upper hand controlling all branches of government but i'm not sure that all those democrats in swing districts or those in more

red-leaning states are excited to say, hey, here's $3 trillion in taxes we're going to foist onto the american people right as we're coming out of a pandemic so we're going to make our case in those states and in those districts and i think we'll have a lot of success. >> marc short, thanks very much. >> thanks, wilf. less than 40 minutes to go before the close take a look at the major averages s&p is down only 0.2 of 1% the russell going strong small caps rebounding from yesterday's big slide. three sectors higher, financials, consumer discretionary and industrials. utility and technology under the most pressure. we will be right back here on "closing bell.

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the fallout from last week's archegos margin call incident continues to widen credit suisse and nomura going lower today. leslie picker has more on the risky strategy. >> bill hwang flew a little too close to the sun he grew his archegos capital management into an investing whale, one nobody had heard of until last week. but when several positions turned against him, it didn't take much to tip his firm into turmoil causing tens of billions of dollars in forced selling now, the risk levels he ran

defied logic several hedge managers said they could not fathom that type of tolerance. banks were lending to archegos at ratios as high as 8-1, citing people familiar with the matter. the ft added that in some trades, ratios were as high to 20-1 that means it would take a very, very small move downward in a name to wipe out the whole position his book was heavily concern trade and liquid a spokeswoman for the firm telling cnbc this is a challenging time for the family office of archegos capital management, our partners and empl employees. all plans are being discussed as we determine the best path forward. it's not in the business of managing money for outside institutions like pension funds, endowments and the like like a hedge fund would that could be partially why his appetite risk was higher than the traditional hedge fund but

still raising eyebrows across wall street today, guys. >> it could also explain, leslie, why he was able to fly under the radar of regulators and everyone else. and i'm wondering how many other of these cases could happen? was it such a unique case, or with the lack of transparency from these family offices and from these swaps where you don't have to disclose your holdings in 13-fs could we potentially see more of this or have that risk in the system >> it's a great question and it's one that i've been asking for the last two days really is this something that is an isolated incident, or is it something that we could see time and time again because of the way that family offices are structured, the way that swaps are structured and prime brokerages are structured and so forth. the one thing people were saying is the type of risk that hwang was taking and the type of risk was quite unique it's not one for those with a

weaker stomach you have to really, really have very, very, very strong conviction in what you're doing because the risk is so, so sky high here. so i think the norm would be for people just not to take that kind of leverage that said, clearly he was able to do it, so if there's a will and there's a way, then yes, theoretically it could happen again. >> and i guess as well, leslie, if there's a bit of smoke and mirrors that allows the client to not let all of the prime brokerages fully realize the collective leverage he's taken on i just mentioned the jpmorgan note that we've been talking about offline today and he upped his estimates of total industry losses by the banks, by the prime brokerage units up to $5 to $10 billion almost all of which is still focused on credit suisse and nomura based on his rough estimates with that quite big

range. obviously that's going to be something to watch it's crazy to see the estimates get that big in total, but also pretty impressive to see how little that is focused across many of the banks that we've been talking about wells fargo, goldman sachs, morgan stanley, deutsche bank, ubs has not being that exposed and if there's some kind of level of strength in numbers, some kind of pass with all of this, maybe they shouldn't have had him as a client in the first place, but that aside that's a big issue, they have kind of done all right relative if these losses are $5 to $10 billion compared to their rivals internationally. >> yeah, it is pretty remarkable when you look at the haves and have nots in those space there is a difference between those in the u.s. and those outside of the u.s. with regard to their exposure. mitsubishi another name that reported about $300 million in

losses from this so part of it i think is economies of scale, this idea that the bigger you are, the more lucrative of a prime broke you are, the easier it is to benefit from this type of unwind not benefit, but stem any kind of potential losses. those who were maybe farther down in the pecking order had to do more to get those fees, had to be a little scrappier, had to maybe take on a bit more risk for a client that they saw as being lucrative. and as a result, this is probably why we are seeing such a difference between, say, goldman sachs and morgan stanley with regard to losses and some of the other banks that have suffered quite substantially as a result of all of this. >> leslie, thank you wilfred, you can just imagine some of the democrats, especially ones who have been critical of the banks in the past, even if the u.s. banks had better risk management skills in this case saying why are the banks taking this kind of risk

and why are these kind of things flying under the radar and getting really hawkish again potentially with regulation maybe of the banks, potentially with family offices and with these kind of derivatives. >> we've seen some comments from the likes of elizabeth warren in the last 24 hours on that front. what i would say, though, on this so far is that if, and it's a big if because i don't think everything has necessarily shaken out yet, we don't see big losses, then you have to say in fact their risk management worked now, maybe they never should have had this client in the first place, particularly if their compliance departments had said we don't think you should take him on a couple of years ago and eventually they did. that's a question to be answered but on the risk management front, if a couple of other banks had big losses by having this client and they didn't, their risk management worked and at the same time, again, a big if this because we can't conclude this for another few weeks or months, but if the rest of the market doesn't collapse,

it's been quite targeted there's one client that's suffering and certain stocks that have fallen a lot but it hasn't affected the s&p 500. we're not talking about, oh, gosh, is this going to bring down the banking sector. >> no, but people do own discovery and viacom. >> of course a lot of placements that were done just days before so there's questions there for sure. we must move on. time for a cnbc news update with rahel solomon. nfl teams have agreed to add a 17th game to the regular season they're also trimming the preseason to just three games. this is the first time that the football season has been lengthened since 1978. as a result the super bowl will be moved back a week further into february. secretary of state antony blinken has skramd trump era policies against human rights. former president donald trump could face questions under

oath about sexual assault allegations against him. and new jersey governor phil murray is expected to sign a bill into law that allows early in-person voting this follows bipartisan and nearly awe h we unanimous approf early voting by kentucky's legislature. get more details tonight on the news with shepard smith. still to come, spotify joining the club how live audio could fit into its strategy just ahead. plus chewy reporting earnings after the bell and it's been a big winner, up 150% from last year's lows we'll break down the results with the company's ceo. here's a check on bonds. the 10-year hit its highest level in 14 months earlier in the session.

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up next, spotify jumps on the hottest new trend in social media. we've got the details on a new acquisition that could position it to be the netflix of audio. the stock is higher today. later we'll get a read on retail with earnings from lululemon, chewy, pbh and blackberry all coming after the bell the dow is down 45 points. 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

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spotify getting in on the live audio trend acquiring clubhouse rival. tell me what spotify is doing in terms of trying to take on clubhouse. >> if i'm an investor i am hosting a good crying session inside clubhouse tonight because we have spotify, the biggest company in internet audio, coming to eat our lunch.

that's really what this is about. spotify has proven it wants to be the netflix of audio and now it's hopping on this next big trend not just in podcasting but all of social media. you have facebook, you have twitter and microsoft thinking about it spotify is getting in early by buying a relatively small company but saying, hey, we're going to do this too and we're going to build it ourselves instead of going out appear buying a billion dollar clubhouse or buying a $10 billion discord. they're going to do it all on their own. on top of that, it gives so much more opportunity to the creators they are trying to attract to their platform for podcasting and giving them the tools they need to do podcasting in the traditional sense or these live audio chats that have become so popular. >> everything you say makes sense, steve my question, and there's obviously no right way to answer this yet, does this really have staying power? is this going to be a big growth area for any of these companies? you can see how it was popular during the pandemic when a lot

of celebrities are stuck at home and everybody is craving human interaction of some kind but it does rest on the star power, the leaders, the artists, the people who you have access to they're going to get back to their bigger, crazy lives at some point, right? >> absolutely. that's where spotify's talent it rye now. they have the obamas, they have bruce springsteen, they have the talent already locked up elon musk might join a clubhouse chat every once in a while, mark zuckerberg, bill gates every once in a while. but spotify's real key weapon is not only are they building out the technology, they are attracting the star creators, the star secelebrities to do ths things solely on their platform. by building this out, it's like an insurance policy. let's say this live audio chat thing doesn't take off after the pandemic let's say it fizzles out

just in case it doesn't take off, they're fine. >> steve, spotify moving up. 2.2% as you speak. thank you, sir, for joining us we appreciate your reporting for more head over to cnbc.com. we're getting some new developments in on the spat between amazon and senator bernie sanders deirdre bosa with more a twitter fight, deirdre >> the twitter fight continues and what a lot of people are calling amazonest confrontational twitter offensive. the company's svp of policy and press, jay carney, responding to a tweet from senator bernie sanders. sanders tweet reads amazon workers in alabama are sick and tired of being treated like robots they are standing up and fighting back and i'm proud to support them carney tweeted in response, with all due respect, senator bernie sanders, you're wrong on this. we treat our employees with dignity and respect. we offer $15 minimum wage, health care, a safe and

inclusive workplace. once again we invite you to take a tour so you can see for yourself again, jay carney asks for sanders to pass a federal minimum $15 wage so, guys, this really echos some of the snarkiness, i guess you could call it, last week that we saw from another amazon executive, dave clark, as well as the official amazon twitter handle of course senator sanders visited that bessimer, alabama, warehouse last week and told workers they know if you succeed here, it will spread all over this country there are about 6,000 workers at that one facility. but guys, the bigger story here is how this movement could spread among other amazon workers around the country and that vote counting got under way today in alabama that's expected to last over the next few days but we're tracking it very closely and we'll bring you any updates and any more twitter battles. >> have we seen any major traction in other locations?

>> there's a lot of talk i mean keep in mind to get to this point the actual union vote in alabama took months some would argue years it requires a lot of organization, a lot of stats to be taken before this there's a lot of chatter certainly, especially in washington, amazon's home state. but nothing in terms of concrete action like we're seeing in alabama right now. >> dee, thank you. when we come back, paypal gets into crypto, amazon gets into chips and arc gets into space. don't miss the race and opportunity in america special tomorrow at 8:00 p.m. eastern time amid the rise in anti-asian violence in the u.s. we'll look at the economic and social challenges facing the asian american community and talk to business leaders about potential ways to move forward we are down a quarter of a percent on the s&p ed how the w . blocking the pd-l1 protein,

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don't get mad. get e*trade and take charge of your finances today. welcome back 11 minutes left in the trading day. we're in the market zone, commercial-free coverage of all the action going into the close. here are jpmorgan private banks ana stacia we're missing the music there. let's get things off with the broader markets. we are down 0.3% on the s&p and the dow. the nasdaq essentially flat. the russell is higher after a big slide yesterday. you can see there the dow got back to essentially flat but has slid again a little bit in the last 20 minutes or so.

it's down about 107 points as we speak. shannon, i'll come to you first. the 10-year spiked to its highest level in about 12 months, 13 months to 1.74. it's at 1.73 at the moment are today's declines relatively reassuring that they're small? >> absolutely. i think we continue to reset our expectations around the 10-year. while we have certainly experienced a meaningful uptick in terms of percentage, we have to remember where we are from a historical perspective and much of the enthusiasm around economic reopening has really been kind of coinciding with this increase in yields. and so while we do expect there to be some pressure over the next several quarters on some of the hottest growth names and those that are overvalued, i think in essence we're looking at modest inflation over the next couple of quarters and continuing to see increased

expectations for economic growth i think we're coming to terms with the sell-offs that we're experiencing the last several weeks were probably unwarranted given the lift that many of these big tech stocks are going to have on this economic growth that we anticipate >> anastacia, how do you deal with those risks, like inflation and higher economic growth what's the strategy right now you're telling clients >> i think shannon is right. broadly speaking the reason markets have not been reacting all that negatively to the fact the 10-year is over 1.7 is there's no new news here we expect rates to go higher generally speaking, equity markets do well in that sort of environment. but i will say as the attention turns to the second quarter of this year, we're looking for inflation to pop pretty meaningfully if the core pc today is 1.5%, we could see a 2.1% this quarter

and 1.8% the following quarter so we're not expecting that trend to persist for years to come, but i think the market's attention will be very much concerned about potential inflation surprises and making sure that we're positioned correctly for those surprises. so as you'll see in the market action today, it's flat but the financials tin to lead on the upside i think that's probably one of the better hedges that we have heading into the environment where inflation and growth may be surprising to the upside. >> let's talk technology wall street is getting more bullish on some big cap tech names, those beaten down ones. stifel upgrading alphabet to buy. morgan stanley favors large cap tech names and named amazon as its best overall pick in the internet space also due to strength in its ad business morgan stanley saying it's bullish on alphabet which it

calls a dark force travel trade. facebook citing growth in its facebook shop's initiative has anything changed about the stories in any of these names, shannon? would you be a buyer on the weakness >> i think these stocks have essentially stalled out for such a long period of time at this point, sara, that we're looking at this from a relative perspective and saying, wow, we've seen such a huge catch-up in some of these cyclical trades we've seep these portfolio managers migrating their portfolio whether it was through trimming some of these names to be candid rather than moving out of them completely in order to fund some of those cyclical trades it just feels right now if you're buying cyclicals because you're expecting this robust economic recovery, why wouldn't you also expect there to be a lift for these big cap tech trades whether we have an economic recession as we saw last year or whether we are anticipating the growth of the consumer and consumer ad spend, the return of

enterprise spend and all of the other things that a company like alphabet has in its arsenal, i can understand why given the relative performance of these names, why we're seeing these upgrades right now. speaking of big tech, amazon may be getting into the chip space and that's pressuring shares of broadcom today josh lipton has that for us. >> amazon is working on a new networking chip. it could power the hardware switches that move data around networks if it works, it could reduce amazon's reliance on broadcom, which is lower here in today's trade. amazon has the scale and size to pull this off but there could be challenges broadcom's tech works well and it's sticky. broadcom, by the way, does not call out amazon as a significant customer big tech companies like amazon are increasingly chip designers themselves because it can translate into lower cost and

better performance back to you all. anastacia, do you like the chip stocks and is this a threat to them? >> i definitely like the chip stocks the reality is there's not enough supply to go around we are in a situation of supply shortages. we know semi conductor companies are shipping 10 to 30% below demand estimates so i think it makes sense that more and more are getting into the production i don't think this hurts the semi conductor space i don't think it hurts the company specifically i do think that as a constructive environment for semi conductors the rest of the year, we are still expecting a 15% to 20% upside in terms of revisions in semi conductors you've got demand that's accelerating in data centers and electric vehicles and supply that's constrained you could see the average selling prices move higher er a result we're pivoting out of the travel

trades but semi conductors is still a reopening and better part of the business cycle trade so i would stick with it. >> we've got a market flash on illumina. >> well, the stock is down after the federal trade commission said it would challenge the acquisition of grail, a company that works on technology to detect cancer early. the ftc saying it's challenging this because it thinks the merger would harm competition in the u.s. market for life-saving multi cancer early detection tests. illumina down 6.67% on this news the company saying it will defend the acquisition of grai because they strongly believe it's in the best interests of patients guys, this is not the first time in history illumina has been challenged by the ftc. they abandoned an acquisition of pacific biosciences last year.

they're thelargest maker of genome sequencing equipment and machines so it's a tough space. there are concerns about a stronger ftc challenging a lot of these acquisitions. guys, back over to you. >> meg, thank you. paypal is now allowing customers to pay for purchases with cryptocurrency. >> sara, the digital payments company will allow u.s. customers who own bitcoin, ether, or bitcoin cash to use that to make purchases at millions of affiliated online merchants. it comes on the heels of visa launching a pilot program to settle transactions used a dollar backed stable coin. just days ago elon musk announcing customers can buy a tesla car with bitcoin it's becoming a bit more mainstream in steps to widen its appeal we're seeing about it coin trade higher by 2%, just around $59,000. guys. >> amazing seema, thank you shannon, i mean a few years

ago, this story would have been unbelievable bitcoin continues to grow. and grow in adoption and obviously if paypal is doing this for its clients, they want to be able to use it in transactions that was always the knock against bitcoin that that couldn't be possible >> absolutely. there's really been no justification to hold it as a currency because you're not able to purchase anything in the real world with it. i think what this is showing is the importance of third-party payment providers. we've seen the dislocation of paypal, of square away from major center banks so i think at this point banks are going to have to scramble in some ways to catch up with this trend. i also think what it's going to result in is more regulation i think as anything becomes mainstream as cryptocurrencies are becoming right now, i think there is going to be a call for protection and regulation from the users of those currencies.

perhaps not from the forerunners of what they were trying to do with crypto like elon musk but at this juncture it's worth paying attention to. we talk about disruption, we talk about the impact of technology on our lives. the reason this couldn't be done several years ago, you just didn't have the breadth of people utilizing payment providers. now everybody is using this on a day-to-day basis so i think it makes a lot of sense to sit up and take notice. >> we've got just about a minute 4r left of trading. the dow is now trading near session lows, down more than 144. it was down 170 just a moment ago. there you can see a little spill action we've been lower all day long. what's leading us down unh is the biggest lag on the dow. amgen has taken 37 points off the dow. goldman sachs, home depot and

caterpillar are the win ners so far on the dow we've still got groups like financials, consumer discretionary and industrials higher, but groups like consumer staples, utilities and technology, they're all down more than 1% so is health care weighing on the overall market russell 2000 does rebound from a sharp drop still lower for the week, up 1.66%. dow closing down about 85 points so coming off the lows there it's just a pretty crazy volatile last few minutes of trading, wilfred. >> yeah, volatile last hour. we so nearly went positive with the dow at the top of the show i'm wilfred frost along with sara eisen the dow down near 100 at the close. nasdaq down 0.1. the russell the outperformer up 1.7 but is the worst performer this week after a big gut check

yesterday. consumer staples the worth per perform, down over 1%. ole down 2%, gold down 2% and the dollar is up 0.4 the 10-year closed at 1.727. investors are awaiting results from lululemon, blackberry and chewy. plus chewy's ceo will break down his numbers and how it's impact his bottom line ahead of his company's earnings call between the numbers crossing anastacia and shannon are still with us. very good afternoon. anastacia, i'll come to you first of all and i'll touch on one of those factors i just mentioned of gold down, oil down you mentioned inflation fears. what is the best hedge to that is it in fact equities or some

of those other assets? >> i think definitely equities has to be top of the list but it depends on what kind of equities energy and financials are the two sectors that stand out to us that do have the higher correlation with real rights rising and also inflation expectations rising. that's the environment we're heading in in q2 we'll of more talk about the infrastructure stimulus. maybe it will be funded, maybe it won't be funded so that will push real rates higher inflation is likely to spike to 2.1% so financials and energy is where you look to hedge some of those inflation fears but i wouldn't overlook the oil market itself we had a bit of a pullback in the oil market but if we are at $60 or so on wti or brent, this is sort of the sweet spot for the oil markets. we do expect the demand to increase, the supply, the u.s. producers have been pretty disciplined on supply and that's incentivizing opec not to raise

production all that much so i think oil, energy, financial shares are all things that you want to have in this portfolio as we head into the next quarter. >> commodities got hit across the board today. sri, everybody wants to know your prediction for the 10-year yield. do you expect rates to rise and derail some of what we've seen in terms of the stock market gains? >> yes, and yes, sara. i switched my view on bond yields on january 1st after having been a bond bull for 40 years saying that the georgia election results essentially meant all branches of government would be in democratic hands the difference would go out of control and the ease would go up i was looking at 1.50 as my target, that has come and gone i made 1.75 my target and we have exceeded that during the day today. i am looking at 2% the major reason for looking for yields to rise, sara, is the

fact that you have a $3 trillion infrastructure program president biden will outline in pittsburgh tomorrow and there is not going to be enough tax increases to finance it you and wilf had a great discussion with marc short in the past hour and i believe that the republicans are not going to support it, which in turn means the deficit will increase, the borrowing will increase and that is a major reason for looking for yields to rise even further than they have so far. >> shannon, do you get worried at any point that things are just too stretched, the risks we're not focusing on enough, whether it's the archegos story where someone can have so much leverage and see it evaporate or an etf buying its own etf? >> i think they bear worth

mentioning what they do is they color our expectations for these bouts of volatility throughout the rest of the year. so while we're certainly constructive on the equity markets based on that foundation of economic growth that we talked about earlier, we do think there are going to be these blips. we saw it with gamestop. we saw it with the trading on friday we do think there are excesses just from the liquidity that's been put in the market, the continued low rates. the cost of capital is very low. so are there potential pockets of excess? are there mini bubbles amongst what could be a long standing full rally that we're setting up for? absolutely i think if we do get into the summer, wilf, i think we'll look at these periods where there might be a sigh, there might be some plateauing of the gains that we experienced and there may be a pullback in some of these names that have done really well to date because we're not sure of what the next step of good news would be then we have on the horizon

taxes. they're going up, right? we're anticipating that. and so i do think that we're getting a bit stretched. i don't think we'll start to feel a lot of that across the board until later this year, but there will be these periods of volatility and investors should really keep their eye on the prize that we are likely entering into a longer term bull market >> we've got lululemon earnings out. it looks like a beat let's go to courtney reagan for the numbers. courtney. >> hi there, sara. yes, you're right, it is a beat on both the top and bottom line for lululemon's fourth quarter, with revenues representing growth of 21% in north america, up 47% internationally total comps up 21% direct-to-consumer so that's mostly your online sales, up 94% stores, down 28% so direct-to-consumer is now 52% of sales, at least for this past year that's up from 29% the year prior to the financed.

gross margin increased operating margin did decrease. you can see shares here are slightly positive and now they're slightly negative in reaction when you look at the guidance for the first quarter, the eps range is above what analysts had been expecting however, the full year eps raining is below what analysts were expecting, while the revenue number is actually above. so a bit of a mixed bag when it comes to the guidance, particularly for that full year. this quarter that just passed was a strong one and shares are now up 1.5%. sara, back over to you. >> yeah, comps of more than 20%, 21% is a hard thing in retail these days courtney reagan, thank you very much shannon, this is a stock that got sucked into the pullback whether it was a stay-at-home winner last year or just a better performer and operator through the crisis is this a buying opportunity

based on these strong numbers, or not >> i think it might be i think there's part of this if there was a little bit of a pullback, this was a momentum play, a stay-at-home play. prior to the pandemic we were looking at this as an in-store story. now with the growth that they have had in e-commerce and looking over the course of the next couple of years with a re-engaged consumer, despite the higher price point for lulu's products, i do think there's an opportunity here, especially if you're trying to differentiate within specialty retail, i think there's a different experience a lot sit in shopping centers rather than a traditional mall i've missed on this previously but this is looking pretty compelling with the numbers that were just reported. >> sri kumar, i wanted to pivot back reading some of your notes, i wasn't sure whether you thought

there were further ramifications to come or more episodes like that that might be coming later this year? >> it is the latter. i think what you have today is a sudden surge in interest rate with the 10-year yield having close to doubled within the last three months that was unexpected for most of the market and with all the leverage that has taken place in the market, i expect there will be more cases similar to archegos. they were the first to happen, there will be a lot more the comparison, what happened in 1994 february of that year there was an unexpected increase in the federal funds rate by chairman alan greenspan which the markets did not anticipate that in turn led to the mexican peso devaluation because it was a highly leveraged borrowing country. it led to the russian debt

default of 1997. and then you had 1998 long-term capital management had closed its doors as a major hedge fund had to be bailed out so the federal funds rate doubled from 3% to 6% in one year, wilf we are seeing something similar happen to the 10-year yield. the markets control it, so i think that there are going to be more of these incidents in the quarters to come. >> but this time the fed says it will give us a lot of warning. they're not just going to surprise raised rates. are you saying it's still similar to '94 in terms of the chain reaction this could set off? >> it is similar, sara, in this sense. it is different in that the fed controls the short-term rate and the movements in the short-term rate were what affected all the

defaults and problems of 1994 through 1998 the difference today is that the fed is promising only to keep the short-term interest rate unchanged. they cannot make you a promise about the 10-year or 30-year yield which is set in the market well, unless they come in and do yield curve control and i have examined that as well, the last time it was tried was 60, 70 years ago from 1942 to 1951 and it was not a success by any means. so they can try to keep it down. the only way they can try to bring the 10-year yield at a certain level. but the 10-year even at 2% will be unsustainable and the markets will not trust the fed that is when everything falls apart. >> that is a pretty doomsday scenario you're pointing there,

sri. we've got to leave the conversation there we've got earnings to get to thank you all for joining us it's good to have all of you here. when we come back, much more on lululemon's report. the stock is trading higher after hours. we'll be joined by an analyst who thinks the stock has 40% higher to go from here now it's lower plus online pet retailer chewy shares are up more than 100% over the last year coming up the company's ceo will be here to break down the latest results. plus, we will discuss the outlook for video games and e-sports with the pridesent of activision blizzard. we're back in just 90 seconds.

chewy results are out. let's get to kate rogers with the numbers. >> a much better than expected q4 for chewy a surprise profit of 5 cents pe share. revenues coming in at 2.46 billion. the stock up over 100% in the last year. the company says it has 19.2 million active customers $372 net sales per active customer the ceo also noting obviously 2020 incredibly challenging and unpredictable but the company was able to increase its customer base 43% year over

year that stock is rising in the after hours trading here back over to you. >> a lot of people adopting pets and shopping online. kate rogers, thank you. don't miss our first on cnbc interview with the chewy ceo. lululemon, shares moving back and forth around the flat line after just reporting earnings for more on the numbers, let's bring in dana telsee it looked like a pretty strong beat on sales, earnings and even future sales what's the hesitation right now with lulu? usually it gets a very warm reception from the street. >> overall you look at the annual guidance. it was slightly lower than what the street had said. they typically guide always a little lower for the year and typically met and beat i thought it was a strong fourth quarter. i think the outlook was good i think the first quarter outlook is good. the sweat life that lulu is

known for, they keep gaining share. don't forget, this year they'll have mirror in a whole bunch of their stores that should continue to drive it too. >> is this a reopening play or stay-at-home play or it doesn't matter >> it's a market share play. when you have what's going on with the outdoors and with active, that's not just one and done, it continues the expansion that they have with men's, with digital, with international, that certainly is powerful you look at their balance sheet. think of what they're doing with ad add-ons. the mirror opportunity they have adds new consumers and drives existing consumers let's not forget that footwear is coming out later in '21 into '22. >> is that the value of the acquisition is a customer acquisition tool as opposed to

being a great money spinner itself in its own right? it's kind of a busy marketplace now, that at-homeworkout portals. >> it is what it also does is give you subscription revenues so annuity revenue down the line. i think all of these at-home fitness equipment items, i think it's part of the consumer's lifestyle. while you may have people going back to classes at some point, you're still going to get them doing the convenience of it in their own homes. when you think about the apparel lulu offers, there's a stickiness to it >> so talk us through the valuation here, dana, because the stock has cooled off from the highs. it's been dragged into the sell-off we've seen in a lot of the winning names but still always kmabds a very high evaluation. >> always commands a high valuation. in january coming in at the hig end of the expectations, not

enough for the bogeys for the buy side i think you could have a new path upward. we've seen this trade 35, 40 times. frankly with the new tam they have with equipment and apparel and other product categories, i think they're going to be able to maintain that multiple on higher earnings as they go let's watch international too. they just hired a new executive from adidas who started in october. as that reopens, as china grows, that's a benefit for lulu. >> is it your top pick in this space or do you prefer others? >> i like the lulu story i think both lulu and peloton can win. i don't think it's either/or between lulu and peloton i think it can do both. >> who are they taking share from, dana i talk to nike and adidas and they all say they're taking share. >> what has lost in terms of apparel in the past year, it's been fashionable apparel and social dressing apparel.

let's keep in mind what lulu has done with their on the movement collection for travel and commute and office when we all go back to the office, i think they're basically widening the scope. it's not just for activities of doing, it's for activities of socializing too. so i think they have taken some of the social occasion apparel and made it more everyday apparel and that's where they're taking the share f from. >> the other number i wanted to pull out of this report is they have grown their direct-to-consumer business to half of sales, a little more than that, from 30% or so where it was a year ago. where does that put them against some of the other competitors in the industry >> makes it a little higher. when you think of last quarter, around 43% of their sales came from online so it keeps increasing i think the 50% number is definitely a big number out there. we've seen from some of the retailers in general it's reached around 44% so on average 50 is higher than

the general apparel market. >> dana, thanks for joining us good to see you. >> thank you very much for having me. shares of chewy rallying after an unexpected profit up next, the company's ceo joins us to discuss those numbers and whether rising commodity costs will weigh on future growth. plus find out hackers are laundering money stolen from the government all right that's a fifth-floor problem...

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check out shares of chewy. the online pet retailer popping right now on the back of a blowout quarter, up 9.4% after hours. joining us now is chewy ceo, sumit singh. thanks for joining us again on "closing bell. a surprise profit, more than 50% revenue growth give us some color on what's behind those numbers. >> it's nice to be here, sara. you know, the results are in my opinion a direct result of the journey that we've been talking about. you know, we've been positive all the way through this year and this quarter was no different. if you break down the quarter, we saw, you know, a lot of structural sustainable makeshift

happen between our consumerables into brands and health care that drove tremendous upgrowth. there is profit taking going on or that we realized due to the strong pricing position in the marketplace right now. you know, the promotional environment was generally a bit muted. but even if you subtract that, we had a pretty solid, positive quarter on a sales basis it's our first $2 billion quarter in the history of the company and something we're tremendously proud of. >> so the question is now the staying power. it looks like you are giving a forecast what are you seeing now in just recent weeks and as more people get vaccinated and economies start to open up more. are you seeing any changes in trends or spending >> yeah, sara, you know what, the dynamics off this past year

and our performance have provided us an advanced look into chewy's future and we believe the future is bright and the momentum is sustainable on the back of tremendous market opportunity that's come in across a secular shift that's happening towards e-commerce channels, which we believe is largely durable and permanent. in addition to that, all of our efforts that in the past i've talked about, our focus on growing health care, on growing proprietary brands, adding more and more active customers to our platform i mean we serve over 19 million active customers at this point if you notice, those customers on a year-over-year basis are spending more with us. so in 2020 these cohorts spent 12% more on an average than their predecessor cohorts. we're bullish on these trends so we believe there should be sustainable power moving forward here. >> do you think work from home and the events of the last 12 months have driven more pet sales or purchases, and also

driven premiumization in terms of what people spend on their pets and could, therefore, those two trends go away in the next year or so >> it certainly has, wilfred, but not to the extent of higher pets in households that statistic is what's driving more if you look at it if you look at pets per household or household owning pets, we'll come at it the same way, this year, last year saw roughly a 5.6%, 5.7% increase in pets per household and that bucks the last five years of 0.6%. you combine that with the fact that there is just this kind of massive secular shift happening towards the channel that it's easy to procure without making a run to the store what we will continue to see is customers remaining engaged, particularly those kind of new puppies and kittens that came into the household when you look at us, we saw a

35% increase in the number of pet profiles created for puppies. that's great because that puppy, that chewy puppy will grow up next year and eat more food, shred more toys and have more health care needs. that's why we believe these trends are sustainable and why we're in a really good position to capitalize on them. >> morgan stanley recently put out a note saying as a subsector of pet, animal health is set to surpass the food and treats section soon is that something you're seeing? and how are you positioned to that relative to some of your competitors? >> yeah. you may recall i have been bullish on pet health care from the beginning. pet health care today is a $35 billion industry and when you look at prescription in the middle of that, that's about $10 billion growing at 10% which up until last year was roughly five times the rate what food and supplies was growing at if you put that pet health care,

overall accessibility and affordability is somewhat compromised given that a third of the pet parents don't take their pets to the veterinarians or don't do so on a regular frequency, it opens up the space even wider and provides the opportunity for us to step into the middle of that and understand what customers' needs are, what veterinarians and other partners needs might be and create an ecosystem that connects them. so we're tremendously excited within our work within health care and the fusture potential o what we might be able to do. >> do you see more food price inflation than expected? >> i think food price inflation in pet, generally prices right now are a little bit higher in retail and online but that's driven likely by some supply shortages going on in the industry that should abate over the next few quarters we haven't really seen any impact to momentum or demand

given that inflation because we've always believed that this category isn't really discretionary and in that way it's resilient to either recession or to inflation. >> maybe not, but sumit, what about does your dog really need a baby yoda toy? i know this quarter you launched the new disney collection for pets, star wars and everything else how much of a sales driver is that, and what can we expect in terms of more collaborations like that as long as people are shelling out more money for their pet? >> well, it would appear so because baby yoda and toys from the disney collection have been flying off our shelves the engagement has been really high it just goes back to what we've always believed, which is pets are treated as family members. you know, when you're dealing with microand macroeconomic trends, you don't put family in the middle of that and make decisions. so from that stand point our

collaboration with disney is very exciting to us so we're proud of that. two, it goes to underscore the importance of pets as a part of the family >> sumit, thanks for joining us. good to see you. >> it's my pleasure. thank you. pvh numbers are out. courtney reagan has those for us hey, court. >> hi there, wilf. this is the results for the fourth quarter for pvh it is a 38 cents adjusted loss analysts were expecting a loss of 34 cents. however, we are not sure that this is comparable because of a tax decision made overseas, but it is a loss regardless. revenues also coming up a little bit light versus wall street expectations coming in at 2.09 billion compared to 2.116 billion. when you're looking at the first quarter guidance, the company is forecasting between 80 and 83 cents and a stronger revenue guidance than the street was

expecting. full-year earnings guidance is at $6. also unclear if this is going to be comparable to what the street is looking for revenue guidance for the full year is projected to grow between 22% and 24% and the street was looking for growth of 24% there. digital up 57% then if you're looking at the directly operated digital channels, those were stronger, up 68% inventory down 12% and i think it's important to point out that the company is talking about reducing its workforce in certain international markets and reducing its real estate footprint including reductions in office space and select store closures this appears to be new the company had previously talked about similar actions in north america, but now this is discussions in the international markets in which it operates pvh shares are down about 1.5% after hours. sara and wilf, back over to you. >> courtney, thank you

courtney reagan. coming up, the president of activision blizzard on whether video game demand could press pause as the economy continues to reopen. plus walgreens has been the biggest winner in the dow so far this year. coming up, we preview the company's earnings that's all coming up on "closing bell."

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>> hello, everyone let's start in california where los angeles and orange county can reopen more businesses and allow higher capacity limits at others this after state officials said that progress against the coronavirus was sufficient to ease restrictions. in colorado, law enforcement officials there leading a procession to say good-bye to officer eric talley. he was one of ten people who died in that mass shooting at a supermarket in boulder his public funeral drew hundreds who paid their respects. president biden has signed into law an extension of the paycheck protection program. this just a day before it was set to expire. the program will now be in effect through the end of may. ♪ and this is all for hailey forsner getting the royal treatment for her 110th birthday, including bagpipes and a parade we also received 110 bottles of coca-cola because apparently that's been her favorite beverage since she was 4 years old. she's been celebrating

apparently for an entire weekend, which i don't know about you, but that sounds like a party to you. >> and well deserved at 110. very nice indeed 110 cokes. that will give you some energy. >> she and warren buffett are on the same diet exactly. >> mcdonald's breakfast too. rahel, thank you activision blizzard recently laying off some workers. up next, the company's president on whether those businesses will be able to make a significant bounce-back post pandemic. we're back in a couple of minutes. 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,

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activision blizzard among those leading the pack rallying pie more than 60% since the lows of last march. the company seeing strong user growth in its latest earnings report and announcing a new cfo this week. as more states begin to reopen, can activision keep its momentum going? joining us with more, the president and coo, daniel alegre thanks for joining us. >> thank you for having me, wilfred. >> why don't we start with the small bit of negative news

relative to an otherwise stellar period which is the live events struggling i guess understandably what is your outlook there and when or if it might bounce back significantly? >> well, obviously the pandemic has had impact on live events, particularly in city live events the e-sports industry and e-sports business is incredibly dynamic. just like the movie and entertainment industries, it had to adapt to the new reality. we remain absolutely focused on providing the best entertainment in the circumstances where we have so we are incredibly committed to e-sports. what we're doing now is we're focusing more on a digital distribution of the e-sports and also having fewer but bigger events as the pandemic evolves but we'll see as cities start opening up more and more, this will continue to shift but what's important is just to ensure that we provide the best

level of entertainment for our players, our viewers, because that's what they're looking for. >> do you think that could be permanent, fewer events, bigger events >> well, we'll see how things evolve obviously the vaccines are rolling out at a very quick pace it's unclear how the in city events will evolve but one thing that is very clear is that because people have been staying at home more, they have gotten much more used to entertainment delivered digitally. and as a result they're staying connected and they're watching it, so the events that we've had recently, just like we had the call of duty finals last year, it had tremendous viewership because we had people all around the world actually viewing the games and being connected digitally. so either way we just want to make sure we provide that level of entertainment and accessibility wherever they may be. >> daniel, overall what are you

seeing in terms of user engagement and just trends right now, growth now versus where we were almost a year ago and this pandemic really started and the lockdown happened and everyone was at home and your stock was taking off obviously as your business was is it different? >> well, as you can expect when the pandemic started, we had not only existing players play more often, but we also saw new players come onto our games. it also coincided with us investing very heavily on mobile and creating mobile games, just like we are going to be launching the diablo mobile game so we are ensuring that they are on pc, console and mobile. that usage was very strong as we've been tracking where countries have emerged from the

lockdowns, we operate in 190 countries, we saw that engagement remains very, very strong what people really care about is if you create a compelling entertainment option for them that is deeply immersive and now even more social, that players will continue to stay very engaged with games that's definitely the case with our games. >> will mobile usage relative to other platforms pick up more as we reopen? >> well, mobile in general obviously gives players the capability to play wherever they may go it's incredibly important in countries like southeast asia or africa where people may not have pcs and consoles so the way we look at it is a franchise is not really living up to its full franchise potential if it doesn't have mobile as an opportunity and as an access point. and for us whether someone is going to be playing at home or when they're on the run and leaving the house, it's just important for them to be able to

access the games via mobile phones and it means for us that we can go from our 400 million user base that we reach every month to our aspiration of hitting more than a billion players. and we can do that by continuing investment in our games, but also ensuring that they're available across all the platforms. >> there's news every day on gamestop, daniel, so i have to ask you about it we've all been glued to the story. the stock rose only 7.25% today. the news was that they hired a former amazon executive as a chief growth officer as someone with a front row seat here that deals with this company, do you think that they can pull off -- even if it's not up to the expectations that the market is pricing in at this point, do you think that they're pulling off a real turn-around of the company and can be an online player? >> well, honestly i don't have enough visibility into the intrinsics of their business and what's going on there. we work with retailers around the world that are distributing our games, so we do work with

gamestop but unfortunately you'd have to ask them as to what's really happening in there what's important for us is we just want to make sure that our games are available whether it's on retail and digital and be where the prayerlayers want to . >> daniel, thanks for joining us. >> thank you. not only are criminals stealing identities to get covid loans, they're also opening online investment accounts in victims' names it's part of what authorities say is a money lndinauerg operation. our exclusive report, steal and conceal, is next (upbeat music) get the food you love with perks from- - [crowd] grubhub. diane retired and opened that pottery studio. how did you come up with all these backstories? - grub what you love. i got help from a pro. my financial professional explained to me all the ways nationwide can help protect financial futures in peytonville. nationwide can help the greens get lifetime income because their son kyle is moving back home

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there's a new wrinkle on an old scam with criminals defrauding the government of millions of dollars and finding a surprising way to multiply their stolen cash. cnbc's latest investigative piece, steal and conceal, shows these criminals are now using stolen i.d.s to get pandemic relief money from the government and then using those same i.d.s to open online investment accounts >> to me it looks like they're trying to money launder scammed money. using my name to do that. >> the crime began last summer someone told mark hy berg's identity and failed bogus paperwork to get a pandemic disaster loan from the small business administration. then they opened an account under his name and opened another account with the stock trading platform robinhood call it steal and conceal. authorities say they're seeing

more criminalscommitting this type of double decker fraud. first, they steal the money from the government programs and then they pump it into the investment accounts to hide the source of the funds and maybe even plus up their gains. ultimately they hope to turn it into hard-to-trace cash. but authorities say the victims are left with a huge headache. >> and that's exactly what i'm trying to find out is what are they doing with these funds, what financial transactions are occurring under my name, under my social security number. it's been a pretty big ordeal. >> a law enforcement source tells cnbc at least four investment platforms, robinhood, td ameritrade and others are being targeted by criminals. the money is coming from the paycheck protection program and the economic disaster program. roy dotson won't discuss specific companies but tells cnbc more than $100 million has been funneled into investment accounts, and he says the platforms are making it harder for law enforcement to trace the

funds. financial crime expert explains the massive scale of the pandemic relief funding has created a frenzy of fraud. >> i would call it the financial crime bonanza act of 2021, because it presents organized criminals and even run-of-the-mil it presents criminals with a golden opportunity to rip off millions and millions of dollars, enrich themselves, rather than that money going to the purposes that congress lays out. >> reporter: detective pena of the coral springs police department in south florida led the investigation into mark's case and is part of a federal antifraud task force he explains a new breed of criminals is simply doing what comes naturally. a lot of people doing these frauds are younger, he tells us. platforms like robinhood are easier to push money in and out. for mark, the worry is what other frauds are going on in his name

>> i've worked my whole life, 31 years for the same company i have boys, i have family, i want their names to be intact as well >> we reached out to all four investment platforms all say they have tough antifraud protocols for verifying information and they confirm that they've been working with law enforcement to combat what appears to be an industry-wide problem. e*trade did not respond to our calls and emails and at chase, where a fraudster did open an account, the bank there says it flagged that as fraud and blocked the transfer of the funds over to robinhood >> i was just going to ask if robin hood and some of these newer retail trading platforms that target younger people are more vulnerable to this kind of fraud because they don't have the same regulations and haven't had the same background and depth of experience as some of the big banks, is that why it's showing up here? >> reporter: i think you're putting your finger on it exactly. it's a regulatory issue and an

experiential issue law enforcement says they want to keep that communication channel open back and forth between the platforms and themselves and they want the platforms to be able to do a little bit more in terms of know your customer. those are the requirements that are on the banks to really pay attention to who it is who is taking these accounts, who is opening these accounts and then flagging any potential signs of wrongdoing because that number that the secret service gave us of $100 million, that's a lot of money, sara. >> quickly, he said that the substantive of this criminal act, a massive headache he was left with, but presumably no financial liability, it's a lot of work to unwind it but he doesn't have to pay any money. >> reporter: i don't think that's the case. more concerning, as you heard in the piece, is the unknown, he doesn't know what else is out there being done in his name, and that gives you a panicky

feeling, as an individual customer, you don't know what else is happening in your name out there and you don't know what else you'll be on the hook for. the time and effort it takes to clean one of these up, even if you're not in the end responsible financially for the losses, the headache and the hassle factor and the amount of time you spend on hold and on calls, it can be an enormous problem. >> eamon, thanks so much coming up, what investors need to be watching for and a preview of tomorrow's market day. this is how you become the best!

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up next, what investor should expect from walgreens tomorrow, the earnings with ceo roz brewer that's next. don't like surprises? [ watch vibrates ] proactive notifications from fidelity

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tomorrow walgreens will report its first earnings with roz brewer at the helm bertha coombs has more hi, bertha >> the consensus is $1.11 earning per share. after the mild cold and flu season, partly offset by the vaccine rollout, but ceo roz brewer's debut is the real focus of the earnings call just a couple of weeks on the job. it's investors' first chance to really hear the former starbucks exec talk about her vision for transforming walgreens omni channel retail and digital

health strategy. it will be the get to know you quarter, guys. >> bertha, thank you the stock is up 33%, best performer on the dow bertha coombs. we'll look for president biden to announce his new infrastructure package and importantly, how they're going to pay for it, whether that includes higher taxes. >> we certainly are. we were down a third of a percent. "fast money" starts now. i'm melissa lee and this is "fast money. guy adami, tim seymour lululemon is lower, we'll bring you all the headlines straight ahead. plus new details on president biden's massive infrastructure plan. the expected price tag, $2.25 trillion