without seeming like they're going to back the risky behavior that led to this in the first place and same time preserve that stability for the entire market. >> not to mention the local land sales that fed into this we'll see what happens now thanks. >> you got it. >> thank you for watching "power lunch. "closing bell" starts right now. right now. thank you. welcome to "closing bell." i'm sara eisen here at new york stock exchange major averaging trying for a turn around tuesday but given up the big gains. disney especially weighing on the dow with late breaking headlines. >> we are positive as we stand i'm wilfred frost. have a look at what's driving the action the fed meeting. treasury yields a bit higher following the drop as investors await guidance the industrial sector is the beingest decliner.

uber is the big single stock winner of the day after the company raised the outlook for the third quarter. we have 59 minutes left in the session. >> coming up, salesforce ceo will join us from the dreamforce conference in person we'll talk about the future of business and the latest on the acquisition. much more. just a minute we'll speak with investor mark mobius and the fears from china he liked it before. >> but first let's get to the big stories to watch today why mike santelli is tracking the action and julia boorstin is looking at disney. mook, the broader markets up on the s&p. >> yeah. a bit of a tentative bounce. so far preserving yesterday's late-day rally which now the losses a little bit but indecisive today

opening pop, fade. hanging around the flat line also sticking around certain levels, 4370 that was around where a lot of bulls yesterday in the morning hoping we would crack below perceived as being technical support. around the august lows some highs from july it seemed as if it's an area to collect a lot of the clearing buyers and sellers didn't happen that way and we arehovering here we did have some near washout conditions yesterday on a short term bases was one of the first oversold states in the market in a while and again i would say indecisive all we're doing is operating underneath friday's close. pretty much investable stocks. this is a year to date basis been a lost four or five months

for the typical stock. it really is the look of an anxious trading range. eventually this creates dry powder people say a lot of stocks down a lot. we can probably find bargains and swept up in the rallies with a selloff but so far it's a struggle for the typical name. we hear from fedex later take a look at the stock compared to u.p.s. and the dow jones transportation average you see on a one year basis fedex underperforming and as cheap as it's been on a forward pe basis relative to the overall market pretty much ever. it definitely is at a huge discount and a wide discount to u.p.s. does that seem poor numbers priced in or if s the market sniffing out things are worse? we have not seen a huge cut in the current forecast yet we'll see what that stock is

basically built in with this deep underperformance. >> got cheap >> exactly. >> thank you disney shares taking a leg lower. biggest drag on the dow just in the last 45 minutes. julia boorstin with the details on why >> at goldman sachs media conference happening today disney ceo just now sent disney shares tumbling saying while they expect to hit the long term targets for streaming subscriber numbers that groetd will be choppy he said the fiscal fourth quarter paid subscriber numbers will exceed by millions and warning of more noise than wall street expects he noted that there will be delta driven production delays which will result in less new product on the streaming service. he was bullish on other areas on the theme parks saying quote that they like the recovery and noting that bookings at the domestic parks increased from

the fiscal third to fourth quarter and cruise ship bookings have momentum. he also said that they're interested in the opportunity around sports betting so that is an area to watch and the stock down 3.3% on that warning of streaming subscriber choppiness. back to you. >> julia, thank you. one to watch for the rest of the semester and the quarter down 3% stocks more broadly rebounding today following the selloff on the debt crisis. evergrande due to pay out interest on thursday analysts expect the firm to default on that payment. let's bring in mark mobius for an exclusive interview great to see you as always thank you for joining us do you expect them to fe defauln that payment and do you expect

beijing to find an adequate solution to stop things spiraling out of control >> yeah. of course, there's a good possibility of them defaulting but the amounts are not that big. i think roughly $200, $300 billion which shouldn't be a big problem but the back of the whole situation here and they will have a lot of trouble coming up with cash. the property is there. the land is there but the problem is how to liquefy it and you got 120,000 employees to pay. so it's a pretty much of a big mess but they're not the only one there are other property developers overextended themselves, in trouble more importantly the communist party has got the sights on the property developers because they become billionaires and housing is expensive and want the housing prices to come down for

the common people so i think the property developers will be in deep trouble for quite sometime now and of course the bond market is in trouble, as well. >> so, mark, with that political balance in mind, what are the chances that this gets out of hand and beijing fails to help the sector quick enough? >> i don't think they will want to help these guys they're going to first of all force them to sell the holdings. it is amazing to think that evergrande involved in financial products, selling to people who are buying properties and so fort that's crazy i think the government will force them to be selling the products and these businesses, other businesses electric cars. what are they doing in electric cars at the end of the day the banks won't go under as a result of

evergrande or other property developer because the government can step in and they have lots of reserves. i don't see any lehman type event taking place >> are you also down playing the chances to impact chinese gdp? >> oh, it will affect the gdp. there's no question about that don't forget it is not only the property developers but what's going on with alibaba and that whole sector that will affect gdp difficult to say at this stage how much but there will be some effect at the end of the day >> mark, would you advise u.s. equity investors to avoid chinese stocks at the moment during the question marks over the gdp growth and the clampdowns we have seen by beijing on excess in terms of successful capitalism? >> i definitely would not advise

avoiding china i think you have to be in china. the huge market. growing market some of the things the government is doing are beneficial to investors because corporate governance is a heck of a lot better going forward and there are many small and medium-size companies that are going to be benefitting by the movements by the chinese government and stocks coming down like alibaba and might be pickings in that area. you have to look carefully a premps is smaller and medium-sized companies but talking about small and medium in china it is pretty being. these companies are pretty substantial. >> overall, whether it is china or other emerging markets which i know think are poised for outperformance are you concerned at all going into a fed meeting with increasing talk of tapering

back which could hurt emerging markets? >> yeah. i'm not too concerned about that because i think the fed is very careful and very cautious. the fed is quite trance parent in what they want to do and very, very good meaning this people can anticipate and plan ahead. that's number one. number two money supply globally has gone through the roof and very difficult to putt the jack back in the box sort to speak. so the money is going to be there and will be pullbacks but i believe that the markets like india, even china, taiwan, korea, even brazil, these markets will do quite well. >> mark, thank you so much for joining us. >> thank you. still ahead, mark benioff of salesforce will join us for a first on cnbc interview from the dream force conference to talk about how the pandemic shaped

the future of work j&j out with new data of the efficacy of the covid booster shot, how it compares to other vaccines you are watching "closing bell" on cnbc.

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hi, meg. >> hey, wilf this is the only single shot vaccine out there. people were wondering what would happen if you give two shots j&j gave two doses eight weeks ago and protection in the u.s. up to 94%. globally 75% and might have been affected by variants in different countries. in terms of safety the general dose is generally well tolerated and looked at a booster dose at six months and might be more similar to what we start experiencing with doses here in the united states. they found that antibody levels went up 9 to 12 times spacing it out that far versus 4 to 6 times with the booster dose at 2 months we talked with the chief scientific officer about how they're looking at supply in terms of both the booster and the dose, the first doses out to the rest of the world.

>> we are building capacity in the world to deliver more than a billion single dose vaccines to the world in the next 12 to 18 months and making sure that we have the booster shots for everyone that needs it in the world. >> but of course right now this is still a single dose vaccine the company presenting new information on the durability of that effectiveness today saying a real world study showed no reduced effectiveness and saw that some areas with variants might have contributed to declining protection against severe disease and the question about a booster will continue. dr. fauci is suggesting to get answers for both j&j and moderna within two weeks. >> meg, a booster shot in a sort of extended space of time is one

thing but two doses over an 8-week period makes it similar to pfizer and moderna. why wasn't j&j always a double shot vaccine in the first place? >> yeah. it's really good question. they planned it that way because they anticipated that the best vaccine you can have for a pandemic is one to take care of at least protecting people against severe disease with a single dose to distribute it around the world and not have people come back for a second shot and saying that they're still seeing strong protection against severe disease but they tested the boosters and this is the results now. >> thank you we'll see what happens with the decisions. 43 minutes left of trading and climbing back higher on the market dow and 13 back in firm positive territory. every senior citizen or the higher but industrials

the russell 2000 up .6 aiming for a positive close. looks like a final positive hour jim cramer joins and salesforce ceo as the dream force conference gets under way out west we'll talk to the company about integration with slack, what work will look like after the pandemic and much more check out today's top search tickers. we have a clear theme today. 10-year theme on top dow, s&p in the top five along with some big movers like uber up almost 12% and apple which is also coming back a bit today whe . like 2 lines of unlimited for just $27.50 a line. that's our everyday price. plus, our plans always come with unlimited talk, text and data included. so, switch to t-mobile and get 2 lines of unlimited for only $27.50 a line.

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trading. the dow up 76. let's check in on individual market movers. shares of big lots under pressure after a downgrade to neutral from overweight. the firm citing industry wage pressures and ocean freight rates for the move stock is down little more than 5.5% stanley morgan with a note on food stocks. downgrading general mills to underweight saying hostess will benefit from snacking and general mills could see growth trail the peers. and that stock down about .75% already underperformed with the consumer staples. >> we have stabilize with 40 minutes left of the session. steady at about a third of a percent of gains for the s&p 500. draftkings lower after a multi billion dollar wager for a sports betting firm. and we'll discuss the odds of a deal coming through or not

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salesforce dreamforce conference is officially underway up 16% this year been busy integrating slack into the systems after the big

acquisition last year. mark benioff joins us now for a first on cnbc interview with jim cramer over to you. >> okay. so mark, i have enjoyed everything from lionel richie to the interview with the ibm people mercedes benz. we have fedex today after the close and announced a deal with you saying that they're 079 mizing the management fulfillment to faster delivery i thought that's what they were doing before what do they need from you if they're already telling me that they have been doing that? >> jim, we have thousands of people here at dreamforce in san francisco live conference. the first one now in years jim, why are you not here? that is actually the question that is on the table >> i'm not there because i greatly regret that i'm not there and not able to celebrate your birthday this weekend which i feel remiss about and wi hear

people talk about the digital headquarters, heard fedex talk about how much better things will be but i do struggle over understanding where slack fits in because i think slack is integrating everything but there's people that want to own slack and some are on teams and i need you to tell us what you said today at your conference about the integration of slack >> one of the things you asked is every company today wants an amazon prime experience for their customers and when you think about the big customers on the commerce cloud or call the customer 360, the 360-degree view for the customers with sales and service and marketing and commerce, those customers, companies that you follow all want to have an instant delivery of their product and that is why

we're partnering today with federal express. >> i have to tell you a striking interviews i have heard was with with the head of mercedes benz united states and one of the things she said they were a technology company and realize to be a customer company now before them what did they do put out really good cars and hope that people like them or getting comments from people like your mother about how to make a better car? >> you know my mother loves her mercedes and many people know the experience with their mothers and look we have the new mercedes here. it is incredible the electric es class. they have the new electric g wagon and all of their cars are connected now to their customers in a whole new way and that includes being connected to the dealers because they have

dealers. and dealers are small businesses which also have to be connected to the customer and the customers have to be connected in this trinity. that is what we're doing for mercedes and incredible what they have built. everything from the analytics and everything built on slack so this is a powerful customer company like you said. customer first highly collaborative and all customers are able to deeply integrate in a whole new way. >> i thought that ibm, they got to speak a little bit and incredible that they are in every bank you can't trust a company that you don't know it seems like what you are doing is making it so a company like the ibm has a client first they always did and never told the story and somehow you guys tell that story with them. >> you know ibm.

we have talked about this. they got 30,000 users on salescloud, the namesake product. service cloud. the customer service the marketing. all of those things, analytics with tableau and now also on slack with over 30,000 users and you haven't seen the new salescloud yet because you are not here but it has a slack user interface. we are not going back. that's why we need to slack. >> very good hi, mark it is sara. >> hi, sara. >> good the see you. i was thinking about you recently reading "the wall street journal" incredible pieces on facebook in particular because you came out and first compared that company to a tobacco company and now seems like they have the specific information about how toxicen sta gram is for teenagers and

concealed it and not doing much about it i'm curious your reaction to this and what you think can be done about it. >> we are going through a digital revolution that's why we're at dreamforce part of that revolution is a world of mistrust and misinformation we know that one of the challenges of getting through this pandemic and even in our political process is all of the misinformation out there and cedes mistrust in society and you have to look at that company facebook as a key source of the mistrust in our society we need to be ceding trust into society and be trust blazers that is what we need to be doing and trust first. all of us ask the question is trust the highest value of the company, of ourselves. and in that case that company i think it's clear as day anybody that reads would remember or

"the washington post" piece last night or any pieces or used the service you know that trust is not their highest value. i don't know what is it needs to transform. this is unacceptable >> mark, we know that you delayed the return to the office and i have read comments you made around this and the longer the period of time goes on that you operate the company purely remotely and given the company that you are are you rethinking whether you ever need to go back >> many of our offices are open now which is amazing some offices are closed based on the city guidelines or country guidelines where there might be a lockdown i was in the office last week myself but i can tell you that the key to getting back into the office is safety. safety is the key. it's how we do the conference. it is different than doing the conference when jim was here two years ago

he could walk through the gates. today he would have done testing a week ago, been vaccinated, have to declare the health status and then come in. all of that is connected into the health cloud 2.0 the land yards that every conference attendee has worn here's the qr code but when you buzz in we know that you took a pcr test today and you don't have covid and you're safe to be here testing is the key like michael told us from harvard this is absolutely critical and that's how you get into the office through this exact same identity we also have here the cio of new york city who runs new york city on salesforce's con tack tracing and vaccine management and dream pass technology and that means that you have the ability to know that you're with somebody who's safe and that's the most

important thing right now. >> all we have been seeing is the dancing stuffed animal behind you >> yes the dancing animal has been pcr tested, sara. >> good to know. >> i can give you -- >> want your thoughts on another business in society issue which is what happened in texas and you offering to help pay for employees to relocate worried about rights in health after that abortion law in texas was passed and curious why the silence of corporate america it is hard to find companies weighing in. apple, microsoft, google moved jobs to texas. oracle, tesla, hewlett pack around i could go on and on where are they on this >> i have 75,000 employees at salesforce, and our employees need to know that when there is a governor in a state or a president of a country, however

it plays out who discriminates against the lgbtq community, against genders, against races and happens constantly that they need to know that part of salesforce is we have their back and they know that we're going to pick up the phone and we are going to say it is not okay. number one, you can move out of that state or country and we pay for it and we are going to make sure that we stand for equality. we are going to pick up the phone and talk to that governor and try to negotiate a change in that law just like in indiana for example with mike pence. and also in north carolina and georgia. and the reality is that we're in world where things can split from equality when a bad law is passed and in that case our employees were very upset. we have thousands in texas we said if you're up set we'll

move you out tell us if you want to move and that's what we're doing. >> i want to go back to something sara said before that and that's the single source of trust and facebook i don't want it to be a complete negative i saw a man really just running it out and it was an app and fast and what he thought was necessary. but it wasn't. it was about truth now he came on our show and said i got it wrong i spent time with mark he retrained me. i want you to be able to say it is not like -- it is not in your firm and fabric that you don't have to believe in truth. >> that's true. >> that man changed the company. you can change your company. >> yes in a moment. in a heart beat. in a second. you can change you can transform. you can evolve you can move forward in that case we saw a company that was -- could have been the next facebook. robinhood. he decided not to be

he said that safety and trust would be the highest values of robinhood. and he started to make changes in his company playbook, the company handbook, in his product and the way he trained the employees, in the artificial intelligence and it is impressive what that young man, he is a very young man in the early 30s. he is here at the conference and here it is just company went public we decided to invest in the company because we were impressed with him i met him two ways one i met him because of you, jim. you said this executive needs to hear the message of trust and truth and safety two, happens to be a large customer of ours running the customer service in salesforce and we spent some very high quality time together and very proud of him very proud of that young man and going to be a great executive. look the never easy you know that. but wow. it is impressive what he did

each one of us can take the step forward. >> thank you i'm going to see you later on. i want to thank -- >> jim, you should be here. >> yes, i should have been here! >> you should be with the dancing animals. >> guilty! >> and sara, too and wilfred, also. all of you should be here. >> to qualify to be there, mark -- >> dreamforce. >> i will be one of the dancing animals if necessary. >> you said that urn at one point and like to hear that story. >> i was quite possible. the right size we have to leave it there. thank you so much. >> bye thank you. >> we look forward to the rest of the interview see you next year. mark with jim again for more of that interview which is about to record 6:00 p.m. eastern time with "mad money. time for a news update with rahal solomon. >> hi. here's what's happening at this hour the trump campaign apparently

doubt claims of election fraud made by the president's lawyers and directed at dominion voting systems and software that's according to new court filings reviewed by "the new york times" why the campaign reportedly sought to verify the claims but found no evidence of the fraud allegations. a group of progressive democrats introduced a bill to reimpose a moratorium on evictions. lawmakers say it's necessary to keep people safely housed. a new study from the census bureau suggesting that birthrates make a slight come back in the u.s. march the levels were down and all of 2020 the birthrate sank 4% you're now up to date. back to you. >> rahal, thank you. sources telling cnbc's david

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earlier today on cnbc breaking a story that draftkings is making a $20 billion offer for a uk sports betting company and david joins us now with more david, what have you learned >> things are moving quickly this morning to be precise 9:26 we broke the news that draftkings made a roughly $20 billion stock and cash offer to acquire the uk online sports betting company but in the last few moments number of competitors and other news

services citing entain confirming that it is in receipt of a bid worth 2,800 p and does appear a 2,500 p bid was made and similar to what we have been reporting all day. calling it between 25 or so 30% in cash. a good amount of cash included in this very significant premium offer for entain and then the shares trading in london gained about 18%. both as i said i have confirmed an offer was made and until just moments ago neither was confirm details. draftkings trying to expand beyond the u.s. market and to do that they're trying to

use that high multiple currency and looking at it right there. the stock price benefited from the pandemic and people staying home and states that have allowed and legalized online betting and entain is sought after commodity. another deal worth 1383 p. almost doubling in terms of at least the offer for the company in what -- in nine months or so. mgm and entain share an important sports betting partnership here in u.s. while mgm has nothing to do with the bid it made it clear today through the statement on the offer that it does stand ready to try to benefit from a tie-up and the consent is needed. at least that's what mgm says

and will have an important seat at the table should entain engage in significant talks with draftkings and likely seek a greater ownership and control of the partnership, that's what i hear from people familiar with its thinking while draftkings might be willing to engage in that negotiation with mgm, it will still need to get entain to say we're willing to accept whatever the number may be. 2800 perhaps p a very large premium but the key and part will be the performance of draftkings stock price and whether it can maintain at least some level that maintains the overall value. wilf >> david - >> got to do some realtime currency translations. >> i feel like i have more pence. >> i'm sure it does. >> i know we are out of time and

fascinating the value in these uk betting companies three or four years ago facing bankruptcy the value tiny with political clamp down on sports betting with the problems of it and something that's ignored in this industry here in the u.s. and now kind of yule in the crown for u.s. companies trying to expand over here and commanding a massive premium. we have to run but great reporting and all morning. a new deal in the banking space. don't forget to watch or lten is to us live on the go with the cnbc app

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just about nine minutes left in the trading day commercial free coverage of the action going into the close. mike santelli here to break down the crucial moments and capital partner chief investment officer steve weiss back on the show stocks are rebounding following yesterday's selloff and off the highs of the day we had a few attempts as a rebound. this is pathetic. >> hold on we used upturn around tuesday in the last half hour and saw the market to be oversold and rebound potential got most of it i think then and also not taken shape. i understand why on the bullish side credit

markets have not acted up. it doesn't look like a big stress event we preserved this pullback what's the incremental conviction to get excited when you have the fed tomorrow and you have that washington slate and the slowdown story >> steve, you raised cash a few weeks ago ahead of this. why was that are you putting the cash back to work yet or not? >> no, i'm not there are a number of issues in the market and one being the fed. i personally think they announce they're going tomorrow my bigger concern is third quarter earnings where we're used to them being above consensus but pressure is the theme and hurt everybody from c campbell's soup with the steel cans and that stock is decimated. i bought a little more today but that says it all right

there. labor costs that everybody knew and the stock down by 0% i think it is a troubling third quarter report for everybody. not fedex. >> lots of earnings reports might be underwhelming uber rallying today after the company revised the third quarter outlook higher the ceo was on "squak box" this morning. here's what he said about ride volumes. >> volume's for us in the u.s. the best since march so volumes are improving. we'll see pricing to ease up going into the back half of the year and volume will accelerate. >> nice jump in the shares today up 12% a very positive upgrade in terms

of guidance. from lowered expectations. >> yeah. going back to where the stock traded like in early august and had had a bit of a slide into this news. still very range bound you look at doordash and what the market is willing to pay for that maybe it gives additional support to uber seeming aggressive what doordash is trading at uncle unclear. not sure anybody is too excited about that. >> fedex is the big name on today's calendar frank holland is here with a preview. frank? >> fedex up ahead of earnings forecasted to be flat year over year the big thing to watch is the overall margin in 2020, 4.5% and last year higher to 4.5% due to increased rates and increasing rates by 6%

in 2022. shared fallen in last two moths as analysts are concerned about the efficiency of the network due to the shortage of workers looking for 90,000 seasonal workers. 29% increase from 2020 back to you. >> frank, thank you. you said, steve, this is important indication and pressured on costs are you looking for an entry point? >> no. i own it and bought a little more this morning hoping to be a good quarter and the news is out. it is a big quarter for management credibility, as well. i thought last quarter the results were good and management didn't handle the call as well labor is an issue and good luck getting to 90,000 and going back to uber i wouldn't own it here if you get $1,000 bonus for signing on to walmart or target

and you can get health care why would you drive a car and lose money? most drivers don't make money and the same with others in factories. so that's the theme through earnings look i hope fedex beats on their -- i hope the guidance is good. >> mike, want to pivot back to the broader markets. might have a negative close for the dow. s&p fractionally positive. >> i would say disappointing although really much more a push with the rally late yesterday that got us some distance off the lows around 4300 the s&p. we have the fed statement in press conference tomorrow. probably keeping people in neutral corners. obviously we are in this zone here where everyone is sort of looking for others to make the first move and noncommittal in terms of what we are and where we are in this longer term trend

because as i said we gapped down at the open yesterday and until you go back above that you have the burden of proof on the bulls. >> on the internals? >> not bad for much of the day looking at new york stock exchange volume split it was waffling around the flat line and more positive than not you see 1.8 billion on the buy side against 1.5 billion on the new york stock exchange and the nasdaq look at new highs versus new lows yesterday new lows than highs. not big absolute numbers but it's sort of building up in terms of the damage, wear and tear on the average stock is there. so the nasdaq, the recent strong and the stocks obscured the fact of volatility that lost steam. we have a flat index can't be flat for long and

maintain a 25, 26 vix. so you have some downside there although doesn't necessarily mean kind of an all clear with a little bit of stress in the futures. >> feels indecisive. take a look at where we are. negative on the dow. again. doing about 10 points and been positive most of the session you can see swinging back and forth into looks like we are lower. a mixed picture. energy rebounds. health care all higher industrials, communication services and utilities are the worst. industrials down have been negative all day tech comeback is kind of mixed why tesla and apple coming back in a bigger way than amazon which is lower on the day. so not much of a relief rally after a very strong selloff yesterday. looks like we are going with a

decline for the s&p 500. just barely. pretty much unchanged. nasdaq stays positive. [ inaudible welcome to the "closing bell." i'm wilfred frost with sara eisen and mike santelli. there's the dow for you closing down by about 50 points essentially a session low. and the high of the session up 343 for the dow and much fourther from the highs than the lows s&p dipped into the red at the close. the nasdaq held on to a .2% gain investors are set for a trio of

bick earnings reports. coming up any minute now from fedex, adobe and stitch fix and will break down the results as soon as they are released. steve weiss is still with us and from t. row price. m you're mentioning the fed and treading water what do you think the market rea reaction would be with that hawkish tone from the fed to suggest tapering and a fraction more hawkish than expected >> i think powell did a good job last meeting and since with other officials to separate tapering from a tightening that's the way the market has behaved as if we want the tapering and not true rate hikes soon after that. that's a test tomorrow to see if we buy into that remember, too, we also get the dot plot tomorrow and the committee members' outlooks.

that's the source of the mixed signals or confusion so i obviously don't think that the market is eager to hear a more hawkish than expected message but i think it's eye of the beholder no matter what happens. >> when's the last time he was more hawkish than expected >> last time late 2018. >> steve, if you look since the last fed meeting inflation has eased. the delta variant has spread and weighed on economic activity and data we had this scare over a chinese $300 billion default and not saying necessarily has systemic impact on the u.s. economy but this is all out there. do you think he'll announce a taper tomorrow >> i do. i do i think the longer you go without announcing it they risk to lose credibility. i expect them to go on this date and probably next month.

the only impact to the economy from china is not because of them going bankrupt. e evergrande it will hurt commodities and inflation is coming down but i still think they go -- it is a mistake if they don't. i don't know how the market reacts there's a poll three quarters don't expect them to go so the market could knee jerk down and usually temporary and then back to business as usual. >> sebastian, underweight or overweight equities? have you used this pullback to top up any positions >> we are slightly underweight about 1% down from the strategic weights. we are looking at big risks. valuations at an extreme on an absolute basis 99th percentile and relative to rate close to the bottom percentile and you have to deal with this difference in absolute

and relative valuation we look at sentiment sentiment remains high despite the recent pullbacks, especially on the institutional investor side. that's the second big risk to monitor and third liquidity. that's receding. on the discussion about the fed i would just say it's not a given that beginning rate hikes is bad for risk assets i just look at data going back to 1979. we had eight beginning of rate hikes plus a taper why that is nine data points and look at stock returns 12 months fwfr beginning of the rate hikes and 12 moths after the beginning of the rate hikes is 18 observations stocks made money. 17 times out of 18 for a remarkable 15% average return and the whole narrative is worried about rate hikes but the fed doesn't start in recessions and not in recessions stocks

tend to do well so that's why we're not that overweight but just slightly on the key macro risks. valuation, sentiment, receiving liquidity. >> what are you seeing in the sentiment surveys? >> mixed i think the surveys have come in down beat relative to where they were before. positioning though which is where the money actually is probably still elevated so i think that's the deciistinction make short material bets laid you've seen more down side hedges bought and not extreme and bottoming but i think returning from complacency is concern. >> steve -- are you attracted to step back into names there with the big declines or not?

>> i'm short been short will stay short. in my hedge fund we sued companies from china in the caymans because they ripped off shareholders they have variable interest entities and those structures are illegal in china they do indirectly what they can't do directly. it is irresponsible for any portfolio manager to own chinese stocks period end of story s i will stay short. it is ridiculous to have any valuation parameters why there is no valuation parameter. so i don't know if that was strong enough for you. >> we got the message. are you an irresponsible portfolio manager that steve is talking about? >> i think it can invest responsibly but active management you don't want to buy the index. you have to know what you're doing as an investor looking for returns for your clients and look we are looking at evergrande as

a micro risk the size of the loans is .15% of the loans so it is not a systemic risk per se and looking at the asset class it is relatively cheap so there are opportunities to lean in but again my point would be carefully with active management steve raises a good question is this a regime shift it comes and goes and now with the credit impulse receding you can pers expect them to reverse that but is this a regime shift is this different from the prior regulatory cycles? that's an important question that we are assessing right now. >> let's get to the fedex

numbers. >> not trying to pick a fight here - >> let's go to fedex frank holland? >> fedex shares down 2% after a small beat on revenue and a miss on eps and the quarterly results the ceo spelled out the issue first quarter operating results negatively affected year over year increase to costs and impacted variability resulting in network inefficiency and purchase transportation is how they run the ground network. smith went on to say it's offset by freight yields. down about 2.5% after a beat on rev knew but a miss on ep s. higher labor costs were the cause that results in network

inefficiencies. >> down with the tougher setup let's bring in donald broughton. good surprises there the expectations not great but looks like that miss on earnings on the higher costs is hurting. >> a little bit in the aftermarket trading. this is -- we have talked about this quarter after quarter year after year it reports when no one else reports and the stock's down 20% from where it was just 2 months ago so to a great extent the expectations that they see cross head winds on labor is built boo the stock's valuation already. >> are they feeling it worse than u.p.s. is feeling it? what explains that valuation gap? >> i don't think there's that much of a gap. remember that u.p.s. is unions and the increases coming to

u.p.s. as they renegotiate union contracts may be quite a tidal wave versus fedex in the market, open market every day negotiating for labor costs. but ask any business that's trying to grow true of our firm and everybody in every business. we are all looking for additional people. >> what's your take as to whether these rising costs will one day be a benefit for them? if they were slightly less aggressive rising costs is it something to capitalize on >> i think they can find the labor. they invested billions in equipment and technology that allow them to move more packages faster with less labor that's what the investment in the sorting hubs and every part of the infrastructure is about for now years.

the bottom line is you have a company doing more volume, in every single business that they compete in they're doing more volume in every single part, geography around the world that they operate in, more volume in every single industry they serve and getting paid more for each package and more volume and paid more alodng the way you have hiccups in delivers that service but that said that provides you the luxury of being able to over time grow earnings as you find enough people to get the job done. >> you're a buyer on the dip just to be clear >> absolutely, absolutely. we are at or near historical lows on -- pick a metric on valuation and when you're growing, when you're selling more at higher prices i trust the management team to figure

out how to turn that into earnings over time. >> good to have you on the fedex quarter down after hours stitch fix results are out sharply higher courtney >> hi there. taking a look at the top line and bottom line things look pretty good. reporting a quarterly profit of 19 cents the street was looking for a 13-cent loss revenues also beat but not by that much when you compare it to that bottom line beat with stitch fix coming in at 571 million why the street looking for 548 million. however the first quarter revenue guidance is a bit lower than expectations with a range of 560 to 575 million compared to consensus of 588 million. growth is also below expectations but still it seems investors hang the hat on the bottom line

beat with shares up more than 14% and active clients up 18 prts but we need a deeper explanation on really the impetus for that bottom line beat there business the revenue beat doesn't seem to cover that. >> absolutely. a surprise profit and much bigger one thank you. don't miss an exclusive interview with the ceo of stitch fix tomorrow "closing bell. looking forward to that. >> very much so. another earnings release crossing adobe. josh lipton? >> results here eps of $3.11 versus expectations of $3.01 revenue 3.49 billion for q4 guidance $3.18 versus expectations of $3.08. revenue slightly ahead

digital media and recurring revenue. creative 9.78 billion. document cloud 9.79 billion. stock was up 30% this year right around the all time highs and given that back here in the afterhours back to you. >> thank you be sure to catch adobe ceo tonight on "mad money" 6:00 p.m. eastern time pivoting back to the broader markets, steve, i feel like you were bearish with 5% or so from the all-time highs do you think we get down from 10% or more or not >> i think it's possible rather than looking at sentiment, what i have been looking at is the liquidity and buying on the dips and retail just hasn't been there despite what you hear from google and the other big tech companies. people are going back to work. you have had the excess employment benefits roll off

that safety net that buy the dip mentality as we see today isn't as reliable as it was and need to see the market consolidate a bit. keep in mind as with fedex there are a lot of stocks that have gone down way more than 5% i can show a few in my portfolio. look at commodity stocks they continue to trend down and i don't see a big disaster out there. markets go up. you don't have to look at numbers for the 9 or 18 incidents that the gentleman is looking at over the long term focus on that. >> steve, thank you. sebastian, thank you up next on the show, citigroup's global head of commodity research will be here after lowering the global oil demand estimate. later former australian kevin

rudd on whether he thinks the economy could be hit by the china fallout fes.ar we are back in two minutes on "closing bell. we see increased efficiency connected to more comfortable homes. emerson's energy star™ certified sensi™ smart thermostat uses geofencing to simplify

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a new samsung phone or upgrade your existing phone. learn more at your local xfinity store today. oil around $70 a barrel after yesterday's selloff. let's bring in global head of commodities research for citigroup. ed, great to see you and interesting that you have just done that lowering the oil demand forecast. meanwhile at the same time natural gas prices of course soaring across europe. how do you balance out the competing factors? >> natural gas is overwhelmingly a power generating fuel and oil is overwhelmingly a transportation fuel so their competition is limited although there is comp tegs, particularly in the winter fueled market. we have some liquids of demand, propan in particular, a winter

fuel in japan but the gas market as it enters the winter is seeing low inventories in the u.s. with a lack of drilling on the natural gas side and extremely low inventories in europe because of a lack of delivery and a lack of alternative supply so the marks are really poised globally for a phenomenal supply shock on the upside, a spike of considerab considerable magnitude but the oil market is not affected by it and has its own supply and demand balances and there the inventory levels that grew over the course of the pandemic is about a billion barrels extra. seeing the inventories depleetded but still larger than they were before and it is just not like the gas market. >> how's the oil demand market changing given the worries of

china and delta variant? >> reduced the outlook demand for the year because of the hurricane season in the united states and yes there's a bit on the part of china but the chinese issue is complicated sentiment is down and bearish as a result of what we look at in deman in china and we have a government that didn't like $78 oil, that did what it could to combat that. and it did it in multiple ways and one thing is to release oil from the strategic stocks as it has done for other metals from strategic stocks to stop what they consider to be excesses prices on the oil side they have control mechanisms they stopped the refiners from importing by not giving import licenses to import crude oil and no export licenses to export petroleum products so there's

market manipulation there. we think the market is stronger than sentiment indicates and all in all what we have done is looked at the inventory picture of the world and before we did the revisions on demand and supply we had a draw in the last quarter of half a million barrels of oil a day and now a projection of higher at million six and think there's room for prices to continue to rise into and through the fourth quarter and the first quarter, as well >> ed, just very quickly, gold good couple of days. your view there? >> our view is that it's on a slow decline we saw a massive change the end of 2020, a period of time that began with massive inflows into gold etfs and physical gold and now equally massive outflows

from gold partly because of an expectation of rates going up and the u.s. dollar has gone up and investors not seen the need to hold gold and have seen on the horizon ways of earning interest that would provide for a better return than holding gold we look at gold slowly eroding this year and bearish on gold for next year thinking the likelihood of a rate increase from the fed is going to be pretty good. >> ed morse, thank you for joining us. >> thank you take care. shares of lemonade down more than 40% this year plus the company's ceo will join us next on the stock's declean and whether the new pet insurance offering will help turn things and. wall street is weighing on conflict of interests of fed officials.

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insurance company lemonade rolling out a preventive care package for docks and cats covering microchipping and vaccinations after the company announced plans to enter the car

insurance market shares up more than 8% today and the stock down more than 60% from the peak. joining us is ceo daniel she riber. i don't know that we have anything like the pet policy that you offer with the options on the market. talk us through why and what it will cost you. >> so great to be with you again. so actually today is our fifth anniversary since we launched lemonade at all. five years ago the first time to buy a lemonade policy and in the last year or slightly more than a year we shifted from ohm owners insurance to pet insurance and life insurance and we are going to be launching car insurance soon transformative for the business and transforms the economics, the intentions and we have seen accelerating growth and spending

by customers at lemonade so a lot of those dynamics look good and we understand why things like pet insurance can really impact all the economics of our business. >> but specifically, you're covering spaying and neutering, vaccines, some interesting health initiatives for pets. what do you hear from the customers? how being of a market do you think this is? >> it's massively unpenetrated in the united states 1% of pet owners in america have insurance. elsewhere in places like the uk or continental europe it is often 60% so we think the mark is fast growing and modest and actually lemonade is quickly within a year becoming a substantial player in this market and as you know covid really driven pet ownership up a

great deal and keater og the customers and the needs that they experience and growing pet is an example of that from being renters to homeowners and car insurance to be a growing with the customers and pet insurance is a way to do that. >> growing fast as you outlined and added so many new offerings in the last year or so but on auto insurance what the reasons are behind the delay and if there is a definitive date when you can launch it. >> absolutely. no delay we are on course and in line with the expectations and with what we have communicated to the market everything is going very much in line with what we hoped. we don't announce date in general but in particular since we are dependent on approvals our regulators don't like us to

preannounce dates they didn't approve and we hope you can launch car insurance fairly quickly. >> i wonder if another weight on the stock lately has been just competition. every day you see a new startup in the insurance tech world raising money, going public why it is so crowded and then you hear about the -- we have a friend whose small insurance company bought and a ton of m&a deals and the smaller insurance side of things how do you respond to the competition? >> our competition isn't really any of that. we have grown fast, at a rate of 150% but it is really not the other startups to compete with but the start farms, the farmers, state and farm in them and that's really what our focus

on as fast as we have grown over five years we could grow 100 fold more and be half the size of state farm so eyes on that prize, that is the competition, that is the market that we look to disrupt. >> you mentioned as the birthday of the company and congratulations on that point but five years, given when you ipoed that felt older than i expected so how many more years do you have of rapid growth versus plateauing out do you think? >> i think we are in an industry as close to unlimited as one can be privileged to work in so $5 trillion, $6 trillion worldwide. we could multiply ourselves 100 fold and be a medium-sized insurance company. we have many years of rapid

growth ahead of us we have been growing five to ten times faster than insurance companies usually do usa 5 took 47 years to hit that same milestone and compared to insurance companies grower 5, 10x faster but looking at amazon and see how long it took to get to a million paying customers we are outpacing the stalwarts so we love the pace of the growth and intend to do effect in the power to keep it up and not seeing any ceilings to rapid growth on the horizon. >> thank you for joining us on this milestone ceo of lemonade. >> thank you. we are getting breaking news on an airline anti-trust lawsuit? phil >> as expected this is reported earlier today and it is floating around and now we have it. justice department along with

six states are suing american airlines and jet blue seeking to halt or dissolve their northeast alliance what is the northeast alliance it is a cochaired agreement between american and jetblue in effect in january with the blessing of the d.o.t. at the time to coordinate the schedules and services to a certain extent with the three new york metropolitan airports, laguardia, jfk and newark, as well as boston logan the doj said it is not good for competition and said everything from they would not be as competitive, more competitive if not working together and that ultimately this hurts the services being offered to consumers. both american and jetblue knew this was coming and blasting the doj and the lawsuit saying we have added 58 flights because of

the northeast alliance service to 58 cities i should point out. and they believe that this has been good for competition. remains to be seen whether or not they fight this out in court or reach a settlement and in a briefing a doj representative said if we go to court we want to make sure that whatever is agreed to is good for the consumer because this alliance in the eyes of the doj is not good for competition or the consumer back to you. >> we're looking at a small reaction to the share prices >> right. >> maybe because people expect them to push back on the lawsuit successfully but was this hugely significant to their bottom line earnings when announced or not really most of the business from direct bookings from people on their own flights opposed to the co-chairs. >> they don't break the earnings down by region and not like you can say if you didn't have this

alliance how much can it assist the earnings i have not seen the math done. perhaps an analyst crumpled the numbers. they were pursuing this for sometime they believe this makes them stronger in the northeast and jetblue out of boston and already strong there the point of the doj is jetblue with a track record of fighting other airlines by not partnering to them and because they partner with american they believe they won't be as disruptive and grow as quickly as they could if they were completely separate and not part of an alliance. >> got it. thank you. up next, chipotle is betting big on brisket with the new menu item in an unusual way another check on the afterhours

movers fedex adding to the losses on an earnings miss. revenue came in in line or better adobe down stitch fix soaring surprise profit of 19 cents. better margins we'll be right back.

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it is time now for a cnbc news update with shep smith. >> from the news on cnbc, president biden making his first speech to the u.n. general assembly today as commander in chief. he pledged to take stronger action on the pandemic and climate change and be a global leader on many challenges facing the planet. >> we're back at the table in international forums, especially the united nations to focus attention and to spur global action on shared challenges. >> the speech at the united nations comes at a time when relations are strained with some

of america's closest allies including partners after the chaotic withdrawal from afghanistan. johnson & johnson reports a booster shot for the one dose vaccine increased protection to 94% against moderate the severe covid cases in the united states that's compared to 70% projection from just the one dose this booster given about two morvets after the initial shot in the trials j&j said the data is not per reviewed. the gabby petito case, yesterday local police in florida called off the search for the missing boyfriend in a nature reserve there they said they exhausted all avenues. but today they were right back at it looking again for brian laundrie, police say he left his family home in north port, florida, last tuesday and not seen since this as a coroner in wyoming is set to perform an autopsy on the

remains found sunday the fbi said those remains are consistent with the description of gabby petito. tonight live in wyoming at the scene where the remains were discovered and will take you on the search area in the 25,000-acre nature reserve on florida 7:00 p.m back to you. >> shep, thank you so much chipotle is debuting smoked brisket on the menu today. kate rogers has the details for us. >> well today it is 24 million more reward customers can access it the product in the works for some two years and tested this year chief marketing officer told me that chipotle stage gate testing determines the items to work

well. >> we'll get consumer feedback along the path and getting finance feedback and operations feedback because a great idea that can't be executed well at the restaurant is a really bad idea. >> the item is a limited supply offer that he says should last through november or december and the company uses meat without antibiotics or hormones and making the supply khan more challenging. back over to you. >> kate, thank you so much look forward to that item. very much so. up next, a look at a group of stocks oswhe valuation hitting extreme levels despite the market pullback. re you wante that all behind? yeah. stay restless with the rx. crafted by lexus. experience amazing at your lexus dealer.

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the investment management business of prudential. averages closed unchanged after the big selloff yesterday. now a look at the market valuing stocks that are most core lated to bond prices mike >> yeah. they do well and valuations go up and bond yeels low. low duration stocks. the market treats them as a steady cash flow stream and you see never been more expensive relative to the overall market at least in 30 years of course this is microsoft, amazon, netflix and others look at the companies that are growth this is the mgk. vanguard mega growth etf it suggests that perhaps the

index is vulnerable to a sharp rise in bond yields if we ever get that or rising inflation expectation just a flag out there in terms of where the index is gaining its strength and support in the past couple of years. >> mike, thank you so much. china's evergrande crisis front and center how could it impact the global economy as a whole former australia prime minister kevin rudd joins us next

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that's because you all have the same internet. xfinity xfi. so powerful, it keeps one-upping itself. can your internet do that? the fed decision due out tomorrow afternoon and the fed survey shedding new light on what people think about officials buying the same assets that the fed is also buying. steve has the results 0 of that for us >> yeah. buying and holding a sizable majority of respondents weighing in on the recent controversy saying the transactions reflect a conflict of interest and should not be allowed. the largest majority a full 81% say fed officials should be barred from buying, selling and owning the same assets that the fed is buying as part of the monetary policy. regarding the specific tradings

reported on in the past week of cnbc and others 69% see it as a conflict of interest for fed officials. and 66% say they should be prohibited from owning individual stocks altogether while the bonds holds coming under fire and he bought them before the fed started to buy them they were convinced that the chances for renomination is 91% saying he will get another turn at the chair. that's up from 71% for his part chair powell drecked sta of to take a fresh look at the ethics rules around financial holdings and activities by senior fed officials. that according to a statement that came out last week. >> steve, thank you. up next, former australian prime minister rudd on the outlook for the global economy amid new risks from china.

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the gabby petito case. plus how some states are rationing covid treatment. china developer is expected to default on an interest

payment later this week. with more on how the crisis could impact the global economy. let's bring in prime minister kevin rudd good to see you again. economically speaking, how serious is this in the chai nece -- chinese sector is? >> it's a significant challenge for the chinese leadership he has long described himself as having three issues, and this is one of them. evergr evergrande, the magnitude of its assets, but also the stage of the rest of the property market within china itself. the chines

to repeat mistakes of the wholesale sector back in 2015 and 2016 which created a bubble back then. they don't want to repeat that error again. >> pivoting to the latest security deal between australia, the uk and u.s., i wonder how long that sort of deal has been something that australia would have loved to have made and why do you think it happened all of it sudden? >> i think there are a range of views in australia on this question i am in australia at the moment. this is a major step in terms of moving nuclear power submarines. as yet we have not fully tested whether there is across the board bipartisan consensus on every element, also, more

broadly, the impact on the operational independence much the royal australian navy or will it become the united states navy in the asian pacific. this deal announced, the secrecy with the french who are understandably agrieved as how it has been handled. but also, with the inld indonesian foreign minister, but a question on the peace and stability as well. >> my question was your expertise on china i know you have been interpreting what president xi is after, crown jewels, like alibaba, the education sector

and now potentially letting one of the biggest property developers fail. what are they up to? >> you are right to point out there has been a flurry of economic decisions in recent times going back to the opposition to alibaba last year. it has been a hectic 12 months in "the wall street journal" it was along these lines, from my analysis there seem to be two or three driving factors. one is ideology. xi want to brings out greater quality, he is less supportive of the billionaire class and on top of that, the sector has a more decisive play in the future than the private future.

also demographic and increasing capital incomes of every chinese family so they have more kids. and another element which is fear and anxiety and conclusion about decoupling from the united states which brings about a whole new set of meshes in terms of economic reliance on evergrande it's an enduring sense about financial stability long-term, how this has recently burnt china in recent economic history. >> kevin rudd appreciate your insight. former prime minister of australia. tomorrow will be a big day because of the fed meeting every word will be parsed from powell will he preannounce a paper in

announce how will the market react after a bumpy few days >> forecast for what rates might do, fed funds rates hasn't responded from the economic data or this market turmoil i guess the feeling is this doesn't necessarily change the overall feel you wonder if it removes a little bit of urgency to get on with things. he has to, as always, characterize the weight of the committee's opinion on this to some degree because it is a press conference >> as to the market levels, how do we frame today's flat return after the day before >> it's not 100% encouraging because you had the market with one of its biggest dips of the year and you didn't have buying,

except for one burst at the opening of the market. i think it's contingent on what the specific reaction is to the fed. i think the fed holds the market in place it is not that it wants to hear one thing over another and there will be reaction to that until we know that's on the table, we are going to wait in terms of what we are going to do >> i think it's fascinating from kevin rudd are we on watch for missed bond payments fore evergrande? >> i think that was handicapped. you are not seeing credit markets ruffled in a big way you do finally have a business day, i believe, in china on wednesday. >> right, holiday. >> if there was going to be an

official government response or reaction, it might come then at this point i feel as if we discounted what we know and we are not seeing necessarily the ripple effects of it >> we will keep an eye on the china market more broadly as it reopens. we are out of time here on "closing bell. we look forward to that fed press conference tomorrow on the show >> live, we are looking at new york city times square this is "fast money. tonight we are tracking the after hours action of fedex. shares are later and earnings are about to kickoff plus, streaming lower, new numbers around disney plus later, uber kicks into overdrive. the stock rallying over