was elected to the morgan stanley board of directors and seeing that permeation in higher education and professional circles, especially wall street. there will be movement there, for sure. >> let's hope. thank you. dom chu. thank you for watching -- nice to be here >> nice to have you here thank you for watching "power lunch. "closing bell" starts in two seconds. thank you. happy friday welcome to "closing bell." i'm sara eisen here at the new york stock exchange. ma major averages in the green. nasdaq's out performing today. another growth day. >> i'm wilfred frost let's have a look at when's driving the action johnson & johnson is splitting up consumer sentiment falling amid

inflation fears and tech stocks led by outsized gains and tesla pulling back 59 minutes left in the trading week. >> ahead on the show, disney hosting a streaming day following the disappointing numbers. we'll talk about it with kay koplovitz. inflation concerns weigh on consumer sentiment be a rise in prices hitting the luxury side we'll ask ceo marc metrick what he is seeing. >> let's focus on the big stories today. mike santoli is tracking the action and joining us is luis chen from canter fitzgerald. a nice end to a resilient week. >> the market broke stride we broke this streak that we coming into the week eight straight up days and the rest of it

four straight weeks of a 1% gain if this is all it was to cool the market off it is as painless as it could get and barely curled lower from the top end of this path we have been on for six or eight months. up about 25% not including dividends. the record high intraday 4718 a week ago pretty close to that right now so still a decline for the week but yes. you have absorbed that acceleration of the inflation scare and hoopla and big earnings misses. the seasonal tail winds ease back from now until thanksgiving and opportunity for a lull based on the seasonal script we had a little bit of a perk higher on the inflation news and want to point out the u.s. 10-year treasury relative to the german yield

the german yield is minus .3%. this is the same trajectory you see right here it is a global market for yield product even if it is negative yield. institutions just need to buy bonds. not about sitting at home at the table saying do i buy the s&p 500 or buy a 10-year treasury or a german piece of paper? banks have all the reserve requirements and also take a look at this chart how much equity market cap across the world is up recently. more than $120 trillion in equity market cap globally and a huge jump. $30 trillion jump. 40% is in the u.s. what it means is if you think of the world as a global portfolio, the direction of rebalancing is to own some bonds and those bonds -- not growing as fast as equity market cap going up and a many reason that there remains a suppression of yields across the

world in this environment of relatively scarce reliable safe assets. >> if you look for a cautious factor the fact that we did not have a bigger shakeout this week also means that the optimistic s sentiment and positioning didn't pull back. >> not all maybe we won't certainly the ingredients are there. even with the sort of calm down in the index climb yeah maybe we push it into next year and we didn't have much of a correction in attitudes or positioning but a little bit of a softening up of the ground underfoot the market. >> thank you see you soon johnson & johnson moving higher today after announcing plans to split into two public companies. one focusing on the consumer businesses and then the medical device operation the ceo weighing in on why now is the right time for the split. >> our goal is really to create

two global leaders, a pharmaceutical and medical device business that has great potential today and strong pipelines for the future of course, the consumer business with iconic brands and we think will be well positioned to even have better focus around the strategy, the execution. >> let's bring in luis chen from canter fitzgerald with an overweight rating on j&j this makes sense to you? >> yes i think this makes a lot of sense. separating the two businesses at the peak of how they do well after covid is important for the company and right now show accelerated growth with the separation they've got new leadership coming in and a new ceo with chief scientific officer not named yet. so i think it's a more focused company and nimble organization and what the street wants to

see. >> then why is the stock only up 1.3% this is a transformation for a company to have a split like this why such a lackluster reaction >> i think it takes a while to digest what they are doing the plans for consumer are not out there and disclosed yet. they'll disclose in 2022 and i think people are not convinced of the growth of pharma will be bolstered by the separation. double digit growth. consecutively and well above the industry average and appreciated. those are two aspects and another thing is the talc and opium legislation and how that goes with the businesses that are separated think there's some concern about that. >> what is the risk? where could this go wrong? >> i think only go wrong is on the execution part what they're doing is what other companies have done in the space

and others are better separated out but it is a big endeavor the company has been together for a long time and a big organization and could be some risk behind it. >> louise, i have been excited about it i always think j&j should be covered with the brands and feminine - >> becomes your stock in. >> yes some of the analysts should be covering it and wonder if it becomes a target for a p&g or a unilever or stands alone and competes with them. >> we'll see because they haven't given the full plan yet but could be a competitive company and nimble company and if the animal health space and how the spinouts of companies led to a greater investor appreciation a stock out there that is great that pfizer spun out

hopefully that's the same as they become more nimble and focused on consumer products. >> are there other big corporations out there with the chance to spin some of their businesses out like this >> yeah. in my coverage space some companies did that merck. pfizer one of the things that people ask about is the still merck and animal health business that is remaining to be seen. >> louise chen, thank you for joining us. after the break, we'll talk more about the health care space when joined by the ceo flesh off the investor day of becton dickinson. you're watching "closing bell" on cnbc.

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medical device maker becton dickinson wrapping up the investor day with a focus on smart connected care and growing the product pipeline joining us is the chairman and ceo thomas poleman great to have you with us. tell us what smart connected care why is that more than just a sort of marketingbuzzword? >> sure. today we see an opportunity where ai and robotics has the opportunity to transform health care and so we're doing that for example, automating

microbiology laboratories with robotics today with a tremendous labor shortage of health care workers we see demand for solutions increasing we do it in laboratories allowing ai to read petrie dishes and diagnose patients or connecting medication management systems with again smart devices, utilizing ai to help make medication delivery safer for hospitals. and we are doing that acrossth health care ecosystem including all the way into the home. which we believe the power of smart connected devices can do things like diagnose covid at home and launched a device to do that. >> i want do get to that particular device in a moment but long term what will this do to u.s. overall health care spend and which is high as a percentage of gdp.

will this increase that or deliver efficiencies >> we believe for absolutely that that will help deliver efficiencies we focus on smart connected care which we just talked about enabling the care shift to new care settings which is also a drive towards lower costs moving out of hospitals to lower cost set igs including to the home and then the last one is improves outcomes in chronic disease managementwhich is an area we invest in heavily. majority of costs are spent in managing chronic disease and we believe medical devices have a major role to lower costs there and those three areas is where we can invest and improve costs and outcomes. >> you have been a big player in covid-19 tests, how big a part of the business is it right now

and what kind of pace should investors expect it to grow for you and the industry >> sure. last year we did about 2 billion in covid diagnostics we expect that to drop quite a bit and we report that separately from the base business so the business overall grew high teens last year and excludeing covid grew 8% very strong growth in the core business excludeing covid diagnostics. it is different to predict where the diagnostics go in the years ahead but the areas we invest in is at-home diagnostics you can buy them and test yourself in the home and launched a rapid cold and flu test and as the cold season comes in, flu potentially is

more prevalent that the need to understand do i have the flu or covid or neither is much more concerning question. people wouldn't have tested historically but going forward the question is going to be i hope maybe i have the flu and it is not covid but i really want to have that peace of mind and understand that's a -- something to enable 15 minutes to know the answer to that question. >> i hope it's neither another topic dish. >> that's the best. >> what about rising input costs? how much can you pass on to the consumer >> we're focused -- we serve health care institutions and take the obligation -- >> to the customers ishould say. >> we look at managing the cost structure. we can't escape inflation. we make component which is are

used made of resins and doubled of two years and seen inputt costs go up there and transportation first we have initiatives started to refine the cost structure, supply chain initiatives. seek to offset inflation there are some areas where we have to pass some price through to customers and we have doing that in select instances but as a member of the broader health care ecosystem we try to take every step to prevent passing those on to the customers as part of the partnerships. >> thomas, you have been listening the different business lines for us and talking last block about the j&j split. is that something you think about doing with your own business or do you prefer the keeping the parts together and the economies of scale and the cross pollination that you might have >> we're maybe ahead of the curve and announced a couple

moths ago and spinning the diabetes care business happening in the new year and that will create a large oes pure play diabetes business on the planet delivers insulin to 30 million patients with diabetes around the world making 8 billion insulin delivery devices in that industry every year and has new solutions as the remaining bd is focused on the areas we just discussed. >> thomas, thank you for joining us big day for you. >> thank you for having me thank you. take a look at the market. we are cutting some losses for the week the dow is higher by about 155 points s&p remains higher technology's in the lead warby parker's out with the first results as a public companies and investors appear to like what they see.

we'll break down the numbers next check out the top searched tickers on cnbc.com. rivian on top. the 10-year yield up there and j&j. tesla gives back 3.8% and nvidia's flat. after a downgrade from wedbush we'll be right back.

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welcome back online shopping names jumping today. big gains for shopify, etsy, warby parker up 9% after investors set the sights on the first results since going public courtney >> hi, sara. warby parker's revenue grew 45% from 2019 and the first quarter as a public company and average revenue 14% to 242 bucks however its loss did double.

investors taking it in stride. detailing expenses making up the quarter's loss including with that direct stock listing. stock based compensation they're opening on track to open 35 new stores by year end making 161 total and a productive market for 900 total co-ceo says it continues to target average sales per square foot of $2900. with significant free cash flow generation over time from the physical locations currently stores are responsible for more revenue than e-commerce digital sales are 42% of total compared to 63% last year. we should note gross margin did take a hit as the contact business doubled but 5% of total

revenue. warby uses mainly air freight to transport the glasses and contacts and managed to avoid the port related supply chain issues and rising costs did cut into margins somewhat. >> like jewelry and eyeglasses, you can ship it is a benefit. >> small, high value, light. >> exactly you mentioned the shift of how much of the business is e-commerce and so funny that they say it's an elevated level because everyone else wants to show that the share of e-commerce is growing and i feel like they explain how it is shrinking. >> yeah. i think that's because of course e-commerce is the growth engine and want to focus on the fact that they have thismore profitable way of selling that's growing and for so long so many of us thought that stoefrs must be more expensive than

e-commerce but digging through the numbers expenses are more expensive are harder to anniversary than a physical store and why they provide so much detail with the physical store numbers about the profit ability and cushions the losses. >> thank you so much. disney shares lower today as the company hosts the disney plus day with weak subscriber number just we'll talk to the founder of the usa network about the one factor she thinks wall street is underestimating coming the streaming services as we head to break, a check on bond yields higher 10-year yield around 1.58 and closed yesterday but up on the week but perhaps could have been up more given the inflation data

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near the best levels of the session. s&p 500 up most sectors are higher. communication services and technology leading strength in meta which is facebook netflix. some video game makers industrial, materials, real estate, staples and financials all green. only two sectors down energy and utilities. as a week down on the s&p and materials are by far the biggest

winners. let's check the individual market movers. b riley with a buy rating on caesars saying the digital market share is growing compared to peers the stock off the back of that note is higher by 4% goldman sachs downgrading hewlett-packard. declining in the u.s. i.t. saying dell is better option in the space and down 8% off the back of that jim cramer spoke about hp in the newsletter today time now for a cnbc news update with rahel solomon. hi. >> hi. here's what's happening at this hour high profile attorney ben crump is filing more lawsuits. he says that 90 additional suits are coming on behalf of more than 200 victims. >> i remember seeing people thrown on the ground and i remember making the comment to my best friend i refuse to be at

a place and witness someone die in front of me and me not be able to do anything. >> meantime an attorney for travis scott said he didn't know how serious it was due to the noise and light on stage and scott should not be blamed prematurely. >> it is a shame that there's been so much finger pointing because we need to just lean back a little bit and let the investigators investigate and figure out what happened here. so many people pointing fingers at travis and others without knowing the facts and we need to find the facts and find out what this institutional breakdown was that happened. and ten days after the election republican challenger is conceding to democratic governor in murphy saying it's not close enough for a recount and not seen evidence of widespread fraud you are upd to date.

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session highs across the board. dow's up more than 215 still down for the week but cutting into the losses as we rally into the close a name not participating is disney it is a biggest drag on the dow again today. it tries to jump start subscriber growth but shares are lower. julia boorstin with more julia? >> for disney plus day the giant

is pulling out all the stops with a discounted entry deal and premiering 25 new pieces of content. two new series and 40 new series and movies coming soon disney plus notably extending the appeal outside of the app with perks at the theme parks such as a 30-minute entry and photo-opes and in terms of product subscribers get free shipping at shop disney. disney is looking to make the subscription more valuable and grow the direct relationships with consumers both on screens and off. guys >> thank you so much thus far not delivering share price improvement this week. let's discuss and bring in kay koplivitz of usa networks. thank you so much for joining

us firstly before getting into today's news were the sub numbers disappointing enough to warrant the share price fall we saw? >> in today's market you find an overreaction to the marketplace so it was a bit of an overreaction was it was a big miss and i think people are looking forward to the numbers they committed to in 2024. 230 million subscribers. that's a big leap. so i think it's a big hill to climb but as you just heard in the disney plus day entry more good product, great product coming from disney i think product that are appealing to adults as well as kids because a lot of disney product itself is appealing to children of all ages and families but needs the

blockbuster movies and series coming for future i think to drive subscriber count. >> what are the biggest risks for the streaming services at disney and elsewhere >> i think there are a couple. one of the things i look at is we talk about disney plus being a monthly cost but the real number is $4.12. so that's an average of what they get per subscriber today. if they do a lot of discount it pulls the number down. the international growth which they're counting on a great deal is for the most part in most countries at less than they get in the u.s. market so what are the subscribers worth? that's a thing to think about entirely every streaming service is going to be challenged by the number

of services in the markt and not just netflix by amazon and apple and not only that but disney warner will come back shortly with perhaps knicks year with really trying to muscle into the marketplace than initially coming out so there's going to be -- it is a challenge, a production cost, the costs driven up by the competition and it will i think provide headwind to subscriber growth which is very important to them. >> so for disney what's always been the edge there is they have had a tremendous ip library. you saw that today with the new releases of marvel and "star wars." how much of an edge do they have because of that or are those

saturated? >> the brilliant thing they did before the pandemic hit is did buy marvel and did get "star wars" and they have all this -- and pixar and a very valuable library of product to bring out and i think they need that they need the tent poles they actually own them and they're marvelous marketers at disney as is pointed out in disney plus days they are terrific brand builders i think they can promote them very well and own them and don't have to rely on buying them from other people however, some of the biggest titles i believe are also going to be seen on netflix for the foreseeable short term future anyway and not exclusive yet to disney. >> for the industry, do you

expect our parent company comcast and others to be active in the consolidation space in the years ahead? >> i think it is different the two you mentioned. you will see more consolidation appetite i think at comcast i think that viacom is a smaller entry into the marketplace cbs/viacom and will be prolific in production. still has a smaller library to promote. there could be consolidation there. >> do you get reminded about the early days of netflix when the stock got dinged with a subscriber missed? was that a huge long term winner or different with disney >> today there's competition in the marketplace and everybody's got their focus on the number,

the number of subscribers and who's winning the race let's all remember that netflix has a great lead on the services out there. they had a disappointment in the subscriber growth numbers just recently, as well, so they also face some headwinds from other streaming services out there i think that some of the things that are disney plus going to kids a competition is not necessarily from the other streaming services but from gaming gaming is very big among youth of all different ages and that's a competition for disney plus. i think there's just one thing i have always focused on and i don't think people do enough in the streaming service wars is that it's so easy to subscribe and unsubscribe. you can go on a service and just a fan of something from "star wars" go on disney plus to watch

it and end it after you have seen it and really interesting that you cannot predict the number of subscribers in and out. you can go in and out by will and not once you're in stay in i think subscribers today, the consumers are facile and move in things. >> really valuable thank you very much. >> you're welcome. >> there's a new "cars" movie because if i have to watch 1, 2 and 3 again i will go crazy. >> a fourth? >> yes with lightning and mator. >> there we go. johnson & johnson announces a split stock. that's all covered in the market zone. plus tech analyst mark mahaney with the top three stock picks in the internet space later on "closing bell."

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to help you find opportunities, 24/7 support when you need answers, plus some of the lowest options in futures contract prices around. get e*trade [ding] and start trading today. welcome back top strategist will give us the big calls on small caps. we have got some under the radar picks coming and talking about the esg take aways for investors as the cop26 summit concludes and the ceo of saks on retail of luxury next hour of "closing bell." first, we are now in the "closing bell" market zone, cnbc senior market commentator mike

santoli is here and guy adame with us. welcome, guy. >> back in the market zone. >> let's kick off -- >> i am so geeked up >> but still lower for the week. on track to snap a five week winning streak guy, i will come to you first of all. impressive to be down a third of a persz on the s&p in light of the challenges and stock declines we have seen? >> absolutely. it is great to be back with you. if you three were an etf that swm etf i would be a buyer i dig you three. the market does what it does this is a theme for quite sometime over the summer i thought late august to trade down on the s&p to 4100 and make a new high. we got to 4270

but here we are. the market learned to deal with a lot of things. 10-year yield approaching 1.6. all the yeo owepolitical stuff the market doesn't seem to care. >> i'm not sure the market cares about inflation. i don't mean that mean actually but got the hottest inflation print in 30 years and looking at the gauges of inflation materials did well this week and crude oil down this week and bitcoin looking at that. >> sure. >> the treasury curve is flattening not steepening. >> i think equity investors outsourced the worry to the bond market and see if that's disturbed. oil will do what it will do. it takes the edge off the inflation concern. one, inflation was not supposed to have really come back down to

trend by now the forecast for cpi on wednesday was 5.8% came in at 6.2 the core is 4.3. came in at 4.6 hot but not blindsided so to me that's a reason why and then the bond market making the peace with the numbers thinking maybe it's transitory or maybe if central banks have to move it pulls inflation lower. to me that released some of the big growth stocks and the ones leading today are all down a bit from the highs apple, meta, amazon, mastercard, visa down from the highs and feeling like buying a dip but the overall market barely got down at all. >> jrohnson & johnson getting a pop after announcing a split meg? >> j&j is going to separate out

the consumer health care business, a $15 billion business with some of the most iconic brands it will keep the pharmaceuticals and medical devices business which is a $77 billion business. ceo alan gorski said the pandemic had something to do with it. >> the pandemic and covid-19 particularly as we have seen on the farm spharmaceutical side shift significantly in the opportunity that that could create for both the device and farm suit call business and the very nature of consumer demands, how they shop and thinking about the products they want that also we really played into this verall decision. >> so really pointing out the pandemic throwing into relief the differences in those businesses j&j had been up almost 4% this

week and now 1.2% on that. they expect to complete it within two years guys >> thank you very much the market reaction is not super enthusiastic the analysts seem to like the move what are you hearing >> there is absolute logic to it the market seems to like having concentrated plays on different areas. neither -- the consumer business i don't think it dazzles anybody but steady the thing to keep in mind with j&j the index funds by far a big holder 3% yield been in the dow forever. you don't necessarily know if they love it a reason spinoffs do well is because they lack an audience and you have the index funds to sell and not an immediate fix. that says all of a sudden we get fa faster growth but it is not an overnight thing.

>> is it a sign of late stage bull market type action? >> it is a characteristic of bull markets going for a while if you didn't have the valuation come up by now you look for ways to engineer the way out of it. >> guy, do you buy this ahead of the split? >> i think so. listen you don't remember this. a lot of people don't. "fast money" was a segment on an existing show and june 27, '06, pfizer announced they sold the consumer business to j&j and glaxo was bidding for it that was going to be the deal of the century. do i buy it? absolutely j&j, not an expensive stock given the market multiple where it probably should be and i think probably doing this

because these companies independently can be a bit more nimble running themselves by themselves opposed to the umbrella and the fact it's $179 stock in mid august i think. >> i thought you were going to say "fast money" spun off into a show and then the valuation has really -- is that what you meant? >> i teed you up for that, dude. we were spun off the spinoff happened got a show i believe in september of '06 did it for a week and almost 15 years later. >> cnbc conglomerate. >> back into the market zone as if we poached you out of the spinoff. something like that happening here >> i love it. >> doesn't really matter energy is worst sector today posting the third weekly loss in a row and oil's pain is not a

gain for ev ds tesla extended the losses today. musk sold more than $600 million worth of shares yesterday on top of the $5 billion sold this week and loerds tourn motors getting crushed on the bright side, ev space rivian continuing to climb higher since ipo on wednesday up 5% today we picked out the negatives like tesla and why it is soft otherwise ev had a great week. >> the ceo leaning on the stock every day and doesn't want to do it in one bite and a seller in the market and the fact that rivian is out there and lucid at $70 billion and the ev trade is getting more names in it and you can spread the betts around and i think people see if you go back two or three years when

tesla in 2019 was a $70 billion market cap making 350,000 cars a year and wish you bought it then now over $1 trillion and trying it with rivian not made a car sale yet. you're overpaying because there's a scarcity of ways to exploit the trend. >> $110 billion market cap up the third day in a row and no sales yet. does it make sense to you? >> pre-sales. >> fomo? the environment and a problem? >> yeah. i think mike hit the nail on the head there's a scarcity factor. people figure i missed the boat maybe on tesla and won't this time and people understand there's volatility in the name along the way. i wouldn't be surprised to see it trade back down high 80s, low 90s but that's the natural of the beast. i think mike is spot on.

the scarcity factor, this is a growth area that people don't want to miss but in the early tesla days that stock is volatile volatile here, as well when i thought that tesla would take out the $1,000 level i didn't think it would be 1240 and do think we will revisit that $900 level the prior all-time high back in february not an indictment on tesla but the way i think the stocks trade. >> let's hit the semicon dducto. toyota will make up for shortages and noting that factories in japan returning to normal meantime wedbush downgrading nvidia to neutral on valuation concerns this is creating chatter nvidia call is controversial interesting that the stock is flat had another leg run-up on top of

the moon shot action what do you make of the call >> as much as i like to crush them on the call, the earlier price target $220. this was a $220 stock a month ago. and this move high every, rallied 50 something percent in a little over a month. the call somewhat timely. i think they report on the 17th. don't @ me if i'm wrong. in some ways i like it i understand that they have raised the price target to $300. i would have liked to see them be more aggressive on the price target to 275 but that's splitting hairs so i see what they're doing and might see more analysts do it in earnings next week. >> it's been okay. take a look. 50-50 up/down volume improved with the afternoon.

slight edge to advancing take a look at the travel and leisure related. downhill 4% this week. since the end of october it is up and little bit parody more or less with social media really weighing on the sector. volatility index calmed down 16 now mini scare with the inflation. sara >> one minute into the close s&p up looking at session highs still a decline on the week. looking at what is working today communication services best sector utilities and energy are a bit weaker as far as the news flow nothing may jor. we did get the university of

michigan sentiment number. that did not derail stocks very much as far as the action the dollar is weak every today. treasury yields are firmer there's the bell all four major averages in the green for the day. the dow up half a percent. and the nasdaq up a full percent. still there's down for the week. ♪ welcome to the "closing bell." i'm wilfred frost with sara eisen and mike santoli small caps have been lagging mega caps for several years but an analyst thinks they could outperform consumer sentiment hitting a 10-year low. marc metrick whether that's a major red flag guy adame still with us. mike, amazing run into the close

today, way to finish off the week but a great resilience. >> some of that is kind of helpful rotation on display here with big potholes. we came into the week market overbought on the hot streak three ways to go sharp pullback you can accelerate higher with a melt-up scenario or you can chop around and go sideways that's the third option is sort of where we have come in and the just right way we haven't reset anything in terms of valuations. seasonal trends are still strong although they do kind of get more mixed for a week or two. >> talk about the economic data today, guy, how that fact ors into everything. record americans are quitting the jobs and job openings near

all-time highs above 10 million and sentiment took a big hit university of moyof michigan sh it fell. what does that add up to >> doesn't add up at all the consumer sentiment i think inflation is a buzzword in financial tv and across the united states. at dinner tables it is clearly permeated main street and probably rightly so people basically fleeing the job in record numbers. i don't know what that's a function of. i think it's a function of everything we talk about the fact that crypto is exploding and basically the stock market is a place where people have done really well there's a component of that, why do i need the 9:00 to 5:00 when i can play at the casino table i think that is going on

i think inflation is a concern you know where i stand i am no fan of the federal reserve and created a huge problem that they can't extricate themselves from. how do i rationalize those things you just mentioned? i don't. through the prism of the market the market doesn't seem to care. >> mike, if inflation did trig every yields to rise more meanfullily and stay there could that hurt the market have the yields pulled back too much >> yes it's been a kind of a moving correlation. it's not all meant one thing when yields go up or down. it's about the velocity and the reasons. we were under 1% more than a year ago in the 10-year yield. up to 1.7. didn't kill the bull market. back down to 120 and then 1.6. managing to digest it.

blasting out of the rate sure but as it stands right now negative real yields negative real corporate yields you know you have essentially inflation is exceeding high yield debt yields at the moment and no threat to actual business or economic activity at these levels. >> if you look at the stock market it is a good inflation hedge up 25% this year >> this year, yes why absolutely. >> run upp on the concerns and cutting cost, pass it on. >> sure. >> if we get consumer sentiment readings like this and see that in spending that's a different story. >> it is it would be an interesting test whether it's a leading indicator of behavior. a lot of analysis of the number today seems like a sign of

partisa partisan differences and so it's almost as if that's not really reflecting the people that have plentiful job opportunities and more savings than in many years. >> let's hit the small caps. russell 2000 index lagging this week but it is outperforming in november up nearly 5%. there's a call on where the group could be heading long term let's bring in jill carrie hall. what is your call on the russell 2000 >> thank you for having me back. we are bullish on the small cap segment of the market with a more cautious view on the s&p 500. one of the things that we look at is valuation and valuation doesn't tend to tell you a lot about what's going to happen near term but we found that where multiples are today can tell you about what happens to returns over the next ten year just if you are a long term

investor the multiples that stocks are trading at today are telling you that the s&p 500 could see negative analyzed price returns over the next ten 0 years and why dividends are so important today but for small caps trading at a big relative discount to large caps right now there our models suggest to see high single digit returns for the next decade after underperformance that they lag the market from 2013 to 2020 and can last a decade so this could be a good longer term period for smaller stocks. >> are they a good inflation protection hedge >> so historically small caps have generally tended to do well they did well in the late '60s environment of inflation

this time around if inflation gets really high you have tended to see a more detrimental effect on multiples but we have been in an environment for a long time of low growth, low wages, a lot of big mega cap tech and other areas doing well now we see the reverse of that there's been a reverse on small business wages and pricing power why so we do think the more domestically operated companies are in a goods position right now. small caps continue to surprise to the upside and the supply chain is something that they have been mentioning on earnings calls, something that's really ticked up a lot and we were seeing more mentions for small than large year over year of pricing on earnings calls.

>> guy small caps for the long term on the valuation gap, do you like that >> absolutely. i watch the network from time to time liz young is talking about this. stephanie link is talking about this laurie last night. we play a game the most important chart, we did it a couple months ago iwm was trading sideways since february we finally broken out. stephanie will say that since 1930-ish small caps outperformed in the environment of right now so absolutely on board with this call. >> jill, thank you so much we appreciate it. >> thank you for having me. >> guy, we have got your final trade idea for the day why what are you going for? >> yeah. you do, studly that's alcoa and talking about the materialstocks for a while

running the business much better than even five years ago balance sheet in good order. levered to aluminum. the prices sold off recently goldman sachs put it on the conviction buy list why not buying the names on valuation but you talk about a reflation trade and reopening trade and everything is lining up for alcoa. sold off recently. back on the horse. had a good day today i think trading to the $63 level that goldman sachs just put out, wilf. >> a vintage call there. mike, materials were the best performing group in the market today up 2.5%. is that a place to look if we get inflation reads like this? >> got the cyclical aspect to it yes and no if you look at chemicals they have been actually having a hard time one of the drivers of the --

fertilize every stocks and one place or another that'sworking and did see iron ore prices crashed. i think you have to be careful because inflation is high we should play high inflation here on out you don't want to extrapolate the last number. >> guy, so good to have you! have a great weekend. >> totally dig you guys. totally dig you guys >> we love having you. up next, marc mahaney with the three under the radar tech stocks to pay attention and saks ceo on why luxury retail is recovering faster. we're back in two minutes.

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some big moves in smaller cap internet stocks this week including recent ipos. joining us now marc mahaney of evercore and author of "nothing but net. great to have you with us as always and good to dive today in on the top smaller picks and let's start with stitch fix. >> okay. yeah it is nice to get beyond -- thank you for the plug on the book and nice to get beyond the mega cap names and a series of the mid small caps less than 5 billion and 10 billion i think there's interesting names in there stitch fix at the top of the list this stock traded down aggressively year to date. there's enormous amount of skepticism on the name that also said we think it's a good business model. trading at roughly one times sales and a nice product development catalyst in that

they have rolled out direct buy functionality. the ability to do on demand shopping with stitch fix opposed to the core subscription business and why we like the story. >> price target on theupside >> 68 bublgs, almost a double from why today that sounds super aggressive but looking at the names with small caps you can see very quick reratings and deratings and volatility in the small cap names and they're a small cap for a reason the market opportunities aren't as big management teams aren't as well tested but can be great opportunities. a lot of risk but great opportunities in the names. >> we want do get to the others but first with elizabeth spalding on the show all the time why do you think there's skepticism around the stock and the story? does the market have trouble with subscription services >> they have about 4 million

active customers so there's a debate about just how on stensible it is we have had a lot of management change here and then third there's broad competition with a purchasing apparel online and different ways to do it. is this mass market? too niche of a service for about two years there you had deceleration of new customers coming on and bears said that tells you how limited the tam is if that changes there's a lot of upside to this stock. >> let's get on to the next pick, marc, which is pubmatic. i had to look up this company. i was disappointed it's not an

automated process to pick which pub to go to but i'll let you tell everyone. >> i'll step back on you i like the pub idea. we are going through a sea change here in terms of advertising in part because of the privacy changes that were put on the industry both on marketers and on the advertising platforms by apple's privacy changes. there's two stocks i find interesting off this theme one is integral ad sciences and the other one is pubmattic the market as a whole, they're all looking for a better marketing sluice than they were used to. and so pubmatic is a nice play

you get high margins one other company that does give you that is trade desk you got the two smaller assets with 1 to 3 billion in market cap and investors should look at both names. >> wanted to hit zip recruiter we had the ceo on yesterday. benefiting from record number of job openings and job quitings. and workers having the upper hand looking for something new what is the thesis there >> there's a new expression i learned from ian the great resignation and other people used that term but yeah we see massive changes in the job market it is a pitch, zip recruiter pitch. i have a buy rating on this stock. $50 price target this is a new asset in the public markets but been around as an asset for ten years.

i love the founder led companies. ian is a visionary and all about tweaking to make the service more useful for employers and ploems and the business models is showing nice growth and sustainable 25% maybe revenue grower in a large category that looks like it's taking share it's an online solution for recruiters and job seekers. >> a final question up the scale. what did you make of the disney plus subscriber numbers this week as it relates to netflix? >> i guess content really matters and disney needs its "squid game. i don't think they go to that category but content creation, subscription businesses are lumpy and disney's results can be lumpy up and lumpy down

i think disney made the right move to pivot into streaming this is not a perfect up and to the right path my guess is it's a false selloff and both have to produce good content. the advantages of netflix is that the content slate is super strong for q4 and in the first half of '22. if i'm right about that the netflix stock will continue to ramp higher. >> marc, great to see you as always thank you. >> thank you up next, a look at whether discount retailers can be big winners on wall street plus how a high stakes virtual meeting between president biden and china's president xi on monday could hit your investments. we're back in a couple

welcome back market flash on dollar tree. courtney >> hi there. yeah according to "wall street journal," mantle ridge has built a $1.8 billion stake in dollar tree and the activist investor is hoping that the retailer can look into reinvigorating the family dollar strategy and take a look at the pricing strategy

dollar tree has already said that it is looking to expand those price points and move some of them above dollar something that many investors have been urging it to consider for sometime if this $1.8 billion stake is accurate it made it a 5% owner why actually talking about the discounters we see a decent amount of anction there in general in the market right now. when current inflation is factored into wages, wages actually real hourly wages declined more than 1% and that's sending consumers discount shopping spending in the discount sector is up and accelerating

so if you couple that transaction data with store, in-store traffic data, that shows shopper traffic up 21% at home goods compared to october 2019 16.5% for target and merely 5.5% for walmart and walmart and target among the big players able to leverage the scale to get inventory in a way that keeps costs in check in today's environment with the supply chain and with inflation the off price players taking ad of the inventory dislocations we have had buying goods at attractive prices so putting together and investors buy into the discount space. dollar tree shares up 16% before the news though even at we mentioned

cannot escape inflation entirely exploring raising the prices above a dollar five below shares up and target shares higher by 13% and before we hear details from the company's earnings result just sara >> interesting trend makes sense. thank you. we'll continue the consumer conversation with marc metrick and impacting luxury retailers mike taking a closer look at johnson & johnson's valuation announcing a split into two separate companies ok, let's talk about those changes to your financial plan. bill, mary? hey... it's our former broker carl.

carl, say hi to nina, our schwab financial consultant. hm... i know how difficult these calls can be. not with schwab. nina made it easier to set up our financial plan. we can check in on it anytime. it changes when our goals change. planning can't be that easy. actually, it can be, carl. look forward to planning with schwab. schwab! ♪♪

time now for a cnbc news update with seema mody hi. >> hi. blue origin said it is devastated by the death of a passenger who went into space with william shatner he was killed on thursday on a small plane that killed in new

jersey he said the experience of being in the capsule strengthened the conviction that space travel should be accessible. about a half hour ago word that steve bannon is indicted for contempt of congress refusing to comply with the subpoena and then the lawyer has said that trump told ex-aides not to testify citing executive privilege. former coach jon gruden is suing commissioner goodell accused of a campaign to destroy gruden's career with the release of damaging emails the nfl says it is meritless. fans of britney spears are gathering in los angeles that could end heifer conservatorship of 14 years. tonight at 7:00 p.m., scott cohn will be live with what the judge

decides next back to you. >> thank you. let's get to mike now for a closer look at j&j mike >> yeah. now j&j's executing this proposing split into two companies from a position somewhat of weakness the stock lagged and the sectors in which it plays. s&p 500 here over the last year up 32% this is the farmpharmaceuticalsp and consumer staples is going to end up in the consumer staples area and depressed clearly defensive sectors is not in favor so that's not much of a surprise what they hope to do is get better valuations for the component pieces take a look at how they're valued j&j traded at a discount to the s&p and closer to big pharma than to consumer staples which retains the valuation premium.

roughly the market trades for mainly because of big names like p&g and walmart that retain the premium valuations one reason that j&j thinks is a good idea is pharma business is probably faster growing and medical devices in there and trade way up here around 28, 30 times forward earnings and mixed together why they feel this one plus one potentially equals more than two in this instance. >> which we can understand but in the same way that analysis could have been applied to yield, a better multiple and i guess it doesn't have the same aspect that ge had of this is a conglomerate that's not worked and black marks against its name in the management and the splitting up to trigger or cat liz a totally fresh view on it and might not apply to j&j. >> it is unclear

you have to say that the market tends not to fully assign the component valuations to a piece where there's offsetting with different investor constituent sys. so it is going to be a question why what's the business look like of debt load, dividend policy this is why i believe they feel like there's not a lot of downside to doing this split >> mike, great stuff thank you so much up next, a guest from new york life and will clifford the big red dog get kids back into theaters twaes at stake for the hollywood opening weekend for that film and others, next

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the united nations climate change conference cop26 wrapping up in glascow. world leaders making big pledges to curb greenhouse gas emissions and cut methane emissions and end deforestation. joining us is the ceo of new york life investment welcome back it is great to see you. >> thank you it is great to be here. >> so i'm not sure the leaders reached a final agreement in the ending moments of cop26 but ultimately what have the few weeks and the pledges meant for

investors? >> from an investor perspective there were really two key developments that i'm very excited about. the first is that the investment community, the finance sector a part of the summit and the conversation because ultimately in order to fund the energy transition investments will be required and the second great development was that there was an international standards developed, a group that is going to be focused on ensuring that companies around the world will deliver consistent closure their carbon footprint, the sources of energy, how they manage to get to an energy transition and allow asset managers like new york life investments to create high quality portfolios, compare a company against another and really focus in on those companies that are advancing those causes that investors care about like climate action and seeing us get to net zero.

>> that's what i was going to ask you, which is the etfs how do you select who makes the cut, who goes into it? a there's criticism of greenwashing, false promises hard to compare the targets against other targets. how do you whitt l it down in these categories >> absolutely. data is key to this. we need companies to disclose things, the information that we need to be able to select them when i think about a series of iq dual impact etfs what we have done is partnered with leading nonprofit organizations like the national wildlife association to deliver climate action etfs and one i'm excited about is our iq and gender quality one developed with girls who code and they're focused on gender diversity in

the technology this is around u.s. companies that are really focused on achieving gender balance at every level in the organization. take a ge. 50% of their board of directors is women we want companies focused on good policies like friendly leave and here you have spotify, a leading company in that area offering 26 weeks of leave so these are the companies we want in the portfolios that we know are focused on these matters that really matter to investors at the end of the day. >> do all companies need to be net zero or very green or environmentally friendly or is it all right to hold an exxon or a shell or an airline or whatever it might be if they're happy for the portfolio not to be fully invested in esg-type funds? >> as an asset manager we are a

fiduciary and need to accommodate whatever the objectives that investors have for those that don't want to think about those that are focused under a clean energy, they can go ahead and invest what we have is a whole spectrum if you think about the sustainability space all the way to exclusion might be those investors who just do not want certain companies in the portfolios. to those that are focused on those companies that are starting in one place and really focusing on getting better all the way to impact which is where our iq etfs fall into place making affirmative pushes in that certain direction. >> when we last spoke it was at delivering alpha in september. the conference i remember a big theme that you liked is infrastructure plays. now we did get the infrastructure bill passed and i wonder if we have seen the move in those alternative stocks or if you see this trend continuing

and if so how to play it. >> i see just the beginning of a tremendous durable theme, both on the fixed income side of infrastructure as well as public listed infrastructure which by the way is trading at a 25% discount to the private markets. if you first start off on the municipal side with the bill act to pass 550 billion is going to states and municipalities. they will be able to multiply that capital by matching it themselves and introducing leverage through issuances whether it's tax exempt or taxable why there will be a supply that's a welcome event for investors looking for incremental yield and diversity and these themes are going to play out for a long time,

improvement in essential infrastructure, renewable energy investments, improving did digital infrastructure with power grids and cell towers so we think this will allow investors to have a long duration asset, good income and even correlation to inflation and participate in this energy transition we're first starting to talk about. >> thank you so much for joining us. >> my pleasure why thank you. next a read on luxury retail with the ceo of saks plus hollywood is hoping for a lee red carpet weekend with the reasof "clifford." we'll preview what to expect next

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no doubt we are all going to be paying more for consumer product why is that's part of it we are seeing unchecked inflation. the headline today was the worst inflation in the last 30 years i've been in this business for 25 years i have never seen inflation like we are seeing right now. >> that was edgewell personal care ceo on the show yesterday

telling us how rising inflation impacts his company. consumer sentiment today fell to a 10-year low for november due to concerns over inflation for more on how concerns impact the luxury retail market bring in marc metrick for a "closing bell" interview. welcome. >> thank you for having me. >> what are you seeing right now in luxury e-commerce sales >> it is booming we have seen the last 90 days, 120 days for saks up north of 2019 we are seeing explosive growth. >> are the customers not as sensitive to price increases and the inflation that we see broadly in this space? >> look. i think this is -- you have to unpact the inflation two ways why it is the price of our goods. thinking about labor and raw materials they don't weigh in as heavily and not seeing too much

inflationary price pressure affecting there. on the other side is consumer sentiment and clearly is something to watch carefully but we believe that the customer, optimistic the consumer will be here for holiday in a big way. >> i wonder short term whether reopening of international travel this past week made a big difference or if the shift online meant that's less relevant. >> no. everyone is excited to see the tourism come back. it is early days something that i think folks are getting back here for the first time in a few years. seeing family. but we are expecting to see excitement in the store just already in florida and regions like that there's been response and then we are expecting new york to believe behind and will be good. >> are you getting the sense that this is pent-up demand for going out, all part of the reopening and the vaccines and

the treatments and really starting to filter through into the economy and might not be long lasting or something to last for a few years here? >> thinking about luxury online especially we are at the end of the beginning sort to speak from what's happening online and the addressable market here is something that's just going to rip so i see room for growth and no i do not see it slowing down. >> as we approach christmas and the holidays are you confident that everyone will get the gifts and the orders on time are we past the worse of that in that regard? >> we have done everything we can do we have spun up actually two additional fulfillment centers we had one why plus the 41 stores that fill for saks. we have worked with the third party carriers to get the most capacity from them and then honestly count on the consumer

to shop earlier and if i may we put out what we call the saks poll survey and can tell they have said about 60% of consumers will start shopping for holiday in october or before thanksgiving with 30% before november 1. lots of earlier shopping and then changed the cutoff dates. we have to buy from saks two days earlier to ensure you get the packages in time to be under the tree and working with consumers and third party carriers. >> we have been talking about splits today on the network after the j&j news we oo eve seen it from ibm and ge you were early on the trend to separate from the online business i'm just wondering how it is going.

it was mainly financial decision but what has it allowed you to do >> i don't think it was a financial decision but a decision aimed to get the business to set up the right way to focus on the consumer the best way we can. as i have said the online business is firing really well and looking at market share, too i'm winning that one on there. 70% growth versus 2019 the stores themselves on the same period against 2019 up 20%. okay thinking about the ecosystem and how it works with the consumer, the consumer is feeling and saks is separate, the stores and online, the skconsumer doesn't e the difference. >> talking to the bankers? >> i want the investors to buy the combat boots at saks. >> no comment on the ipo plans

>> no. it is the holidays now >> what categories are working best >> it is obviously right now starting to get into the gift giving mode. elevated casual. people wanted do get out of the sweats and not -- be comfortable. seeing elevated college. people want to get out of the sweats and get dressed up, but they want to be comfortable. people are getting dressed up, going to events and weddings and the staples of handbags, accessories, footwear. they haven't slowed down all around the house pretty strong >> mark, thank you for joining us >> thanks for having me. >> when we come back, everything you need to know about president inden's virtual summit with

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investors are set for a couple of potential market moving stories a big meeting monday for president biden. and what to expect from this weekend's box office openings. >> president xi and president biden will be meeting. they will look to erect guardrails around the relationship to responsibly manage the competition without confrontation. there has been progress on climate and trade talks. but escalating tensions will challenge the conversation specifically around taiwan, technology companies and human

rights we also expect a conversation about the beijing winter olympics now less than three months away. >> my question is could we have ever expected this to take place in person? should we disappointed it is not. how often do world leaders just talk on the phone and have virtual meetings anyway? >> certainly there is demand from both countries for constituents and citizens to see their leaders appearing as they talk there are five hours the two leaders have spent on the phone since biden was inaugurated. but this is different than the meeting with president putin president xi has not left china since the pandemic having him fly somewhere else

around the world to attend one of these events, that wasn't one of the cards in the prior administration there was always a discussion about whether and when he would come to the u.s. and they said that would be part of at the visit which never came to fruition. >> it was mentioned president biden is set to sign the infrastructure bill monday we will be joined by suzanne and how she was instrumental in betting things into that bill. and big red dog, it is hoped that will get people back in movie theaters >> paramount's big red dog

opened already and has taken in $5.6 million it will be if kids get their first vaccine shots or if they are more comfortable watching at home and netflix is releasing a movie with ryan reynolds and dwayne "the rock" johnson having so much premium content at home raises the bar to get people back out to theaters again. >> julia, thank you very much. the red dog show has a great cast i hope he is not watching because i am more likely to see "red nose" than "the red dog

show." >> is there a brand recognition in your household for clifford >> not anymore >> a 60-year-old ip. it will be interesting >> parents will take their kids. it brings back childhood memory. very high marks for the movie. >> i think they are in the mode of more is better when it comes to taylor swift. >> perfection. >> what are you watching next week in terms of the market? >> we were able to say people love this thing too much i think they moderated a little bit. i don't know if there is an edge, some indications from retail coming in, sales. i think we are in an okay macroposition, but it's interesting that we are going to keep talking about inflation not

just as what did it mean for interest rates and the fed, but what does it mean for consumers' mood i think that's one of the pressure points on attitudes if not spending >> you look and it's 95. it was only a couple years ago we were above 100. >> 2020. >> but it's not like it's unheard of that it could continue this run. >> we were above 100 shortly after the covid crash and a couple years before that it's a fair point. what is interesting about the dollar is its influence on stocks has never been consistent it's not like it's always good if the dollar is going down or up in a given moment >> also, how fast it is going up and how big the size of the moves are. >> and against what other currencies and finally, more earnings --

massive factor this season with individual stock moves in both directions >> has been very pronounced. investors keeping stocks on a short leash going into next year pretty remarkable that the overall market has been able to absorb that i long with the exuberance >> the worst performing stock this week? >> tesla >> 15.5% lower that's going to do it for us "fast money" begins right now. >> live from the nasdaq market from times square, this is "fast money. i'm melissa lee. tonight break out your credit cards, we are going on a shopping spree and names to keep on your shopping list. johnson & johnson is