"power lunch" starts now welcome, everybody a busy hour ahead. i am tyler mathisen. kelly will join us in a sec. spending up amidst the highest inflation in decades will high prices start to squeeze purchasing power a former industry insider will tell us which retailers may be most at risk and best insulated. the road ahead is filled with inflation. so says the owner of advanced auto parts we ask if his business is turning. and the ceo of qualcomm, diversifying into new markets. one thing he does in spare time to help him achieve his goals. kelly? >> now we have to think about that, tyler. thanks stocks are rising on signs of consumer strength, dow up 200 points, the dow is slightly

underperforming other major averages s&p 500 up, and look at the ev stocks this stock hasn't had a down day since going public last week we talked about it, opened at 106.75 it is well above it now. $163 on the 10% rally, market cap of $139 billion. lucid makes the ev pickup trucks and suvs lucid makes the high end air, carve the year they're telling investors reservations for first vehicles jumped and production plans for the year are on track. today's gain gives it market value of $87 billion just blew past ford's market cap. michael whelan covers the sector, spoke to the lucid ceo last night, joins us now michael, lot more orders than people were expecting i guess.

>> yes, kelly. peter was happy when i talked to him, ceo of lucid. he said the sky is the limit for the valuation of the company and stock. we're seeing a lot of that today. honestly, talked to some investors that think they don't see an end in sight because of the ev hype going on, seems to be endless supply of funding for these companies and startups that are going all electric. >> let's talk about how many cars they can make, michael. it is not about demand for evs that can put up impressive numbers, we should expect demand to be strong how quickly can they make the cars, atwhat profit margin. >> that's a problem since tesla or any other automaker ramping up production is not a simple task. something that ford and gm have been doing a century or more, still have problems with

sometimes. lucid is a little more conservative than some analysts would like honestly. they have a target of 20,000 vehicles next year when you look at the reservations, they're almost about that already, it will be a slow ramp up they plan to produce a lot more toward mid to end of decade, but for now, they're being more conservative than the other companies that went public recently also seeing a lot of spec companies or ev startups having to trim plans back because they weren't able to hit them lucid, peter roll inson want to underpromise, overdeliver. might be seeing more of that coming up. >> underpromise, overdeliver is great but at the same time i get very suspicious when a ceo says pertaining to his or her stock the sky is the limit this could keep going to infinity basically and that seems a little overstated. they've got a 1.3 billion order

book, they say 17,000 reservations. that comes out to about $76,000 a car. and yet in the third quarter of this year, their revenue for this $70 some billion valuation company, revenue was 332,000 lebron james makes that on an off night. >> and tyler, when you look at the companies on paper, compare them to ford or gm, this company lost $1.5 billion through the first three quarters they're planning to spend more as they ramp up production you're looking at a company blew past ford which is making billions upon billions this year, and will be a strong player once they get the f 150 out there. on paper, this doesn't make a lot of sense, a lot of tesla effect, people not wanting to miss out on the opportunity to get in on the ground floor. >> thank you very much appreciate it, michael

we have breaking news on pfizer and its covid antiviral let's get to meg terrell. >> pfizer saying it submitted to the fda for emergency use authorization of the covid antiviral drug now it is a few weeks behind merck whose drug is going in front of the advisory committee november 30th. pfizer's drug in clinical trials was shown to reduce risk of severe covid hospitalization or death by 89% when given to high risk people within three days of covid symptoms starting this fda process, separately, a story from "the washington post" that the u.s. government is likely to announce a 10 million course purchase of this from pfizer sometime this week price could be $500 per cord that follows a large agreement of the merck, 3.1 million courses that the u.s. purchased.

some expectation and hope these drugs can provide the tools to make a huge dent in the pandemic as we have been trying to do so far. >> who would get the drugs, how would theybe distributed, meg? >> well, they were tested in clinical trials in people just at high risk of progressing to severe covid that can be either because of age or underlying health conditions it is likely that will be the population initially for whom the fda indicates these drugs. it is not expected they'll be limited to unvaccinated people, even though that was the population in whom they were tested it is not expected it will be limited to that population the way they would be gotten, you get a covid positive result, a prescription for this pretty quickly, and even potentially being able to take these at home you pick them up at the pharmacy, ship to your house, taking them for a few days, reduce risk of severe disease.

>> wouldn't be through the hospital, through the health care provider and presumably through the neighborhood pharmacy thank you. appreciate it. now to a key pillar of the economy, the consumer. americans spent big last month despite rising prices, maybe partly because of them retail sales were up 1.7%. gasoline, department stores, sporting goods, all showing strong gains why not with gasoline, the price up near $5 a gallon in california there's a big risk beneath the surface before the holidays. terry lundgren, former ceo and chairman of macy's here to tell us what he is seeing terry, you divide the retail landscape into the haves and have nots. some of the big companies include the likes of walmart, home depot, macy's, your alma-mater, along with a couple others like glory that have niches which companies are not going to be able to prosper in this time

of supply chain trouble and inflation rising >> that's a good question, tyler. i strongly believe when you have an opportunity like this where you have momentum, and clearly there is momentum at the retail counter, you need to put the accelerate down and invest in growth opportunities for your company. so the companies that have not got a strong balance sheet, those companies that recently have gone through bankruptcy, there's been several in the last year, they're going to have a tough time playing offense, they're going to have a tough time doing anything other than meeting their debt requirement i put those guys in a different category, you suggest the have nots, walmart, target, home depot, macy's that have a strong balance sheet will go aggressively after more market share. >> you're too much of a gentleman to mention the names of jcpenney, i will, neiman and others that went through

bankruptcy what are you hearing about patterns of shopping that people are doing? are they buying earlier because they fear they're not going to get what they want as supply chain interruptions disrupt spending >> here's my own experience of decades of experience of when the consumer buys earlier due to supply shortages tyler, they do do that it is good for the early business what most consumers don't understand, they'll spend late when they spend early, they think they've got it, think we nailed the whole holiday shopping niche they almost always come back, do another group of buying purchases toward the end it's a double dip, which is only good news for retailers in those categories. >> that's wise i'm seeing signs of that

personally you mention your decades of experience how would you categorize inflation we're going through today with previous episodes the country faced. >> i've said on this program in the past that moderate inflation is actually good for many parts of the retail industry because prices have been held down so long, for so many years because whenever there's an opportunity to source product elsewhere, we moved production from china to indonesia or vietnam or wherever the appropriate place was, tooled up, have the work force skilled to requirements of the product. we're always able to keep products down. we have basically saw no inflation in apparel the last ten years, as an example a moderate inflation actually consumers will pay for moderate increases, particularly if you talk about a $50 dress going to

52 or $53. they're not going to balk at that having said that, there are categories that are significantly, i think the housing market comes to mind, prices of lumber, appliances and the like are skyrocketing. i do believe that will correct itself over time, but i think the supply and demand will come in balance quicker in other categories. >> who's the hot new retailer this season? >> it is a small company, but they recently have gotten big support from i think private equity and retail biergs they see the product is different, it is differentiated, fits a casual life-style, high quality, upscale, great fabrication. i think they have a good run in front of them. the answer is yeah, they have very few retail stores, it has

been an online play that now opened retail stores went to the first retail store a couple of weeks ago in san diego, california and was impressed with not only the product and service and the whole experience. >> i haven't been to one of the stores seen them ubiquitously on the internet and social media feeds. >> etsy is interesting, too. i think they're coming into their own now. they offer unique product offerings, particularly for holidays we're all looking how to give a gift that's memorable, different. i like them as a smaller up and coming company as well. >> all right, terry. i'll get you something from there. >> coming up, the ceo of advance auto parts warns of inflation ahead. how will the company handle the growing challenge. and the race for quantum supremacy, stakes are high for a startup that went public in october. we have a rare look inside the company.

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it is facing new head winds. those shares are a little lower today. here to discuss, tom greco how are you feeling inflation, is it in the goods you buy for manufacturers and resell, are you not able to pass on price increases, is it from labor? where is it coming from. >> good afternoon, tyler great to be back on. it is really across the board. we have commodity inflation on products we sell you're seeing wage inflation in stores and distribution centers. obviously in the traffic and freight line great news is we have been able to deal with that. once again, expanded margins significantly, gross margins by 240 basis points in the third quarter. and we have been pretty successful offsetting

inflationary trends with internal initiatives which we're excited about. >> i was going to ask, what are the internal initiatives, how do you expand margins if costs for content is rising and shipping >> we have a pretty unique situation here at advanced there's a couple of things first of all, in terms of our own brand or private label, we have been very successful making transitions. we acquired the die hard brand about a year and a half ago. it has been incredibly successful for us. we have been able to reduce discounts in the battery category because of die hard, and more recently, expanding car quest brand into a couple of key categories such as steering and suspension and engine management, and very focused making sure we have high quality product coming in, so our customers like the quality of

product, oem quality we are able to expand margins. some inflation we are offsetting is unique to us, based on our own internal initiatives. >> tom, the market seems to be giving a vote of confidence to evs being the future of transportation, some leading automakers are trying to get parts down to 100 from a thousand for a nice vehicle. 90% of cars are going to create big demand for advanced auto tell me how you think the business willie v evolve as ev k up steam. >> this is an exciting time to be in the sector a lot of activity and technology changes thathappened over the years and this is another one. we intend to fully adapt to the ch change over time we have a brand called die hard that can play a role a lot of things on an electric

vehicle that sell, all have brakes, wipers, need to be washed we will be evolving, repositioning the company to take advantage of this trend we have the scale to do that >> what is growing faster for you now. the do it yourself person who is doing upgrades to the car at home or the professional segment which i guess probably took a bit of a dip during the pandemic and has come back. >> that's exactly right. the professional segment is growing faster we did expect that this year as people start to get back to work driving their children back to school, people are getting on airplanes. >> doing all three of those. >> exactly the more that happens, the more you're going to see that professional segment grow. tends to be the higher income segment of our society

gradually that's coming back differentially in different parts of the country, but it is coming back. i have to say we have been pleased with resiliency. there are some behaviors that stuck longer than we may have expected people detailing their own car people that bought a car because they're fearful of mass transit. the difficulty in getting new vehicles helped our business as you mentioned in terms of aging the fleet. it is just a robust time for the industry and they're growing. >> thank you, tom. appreciate it. hope to have you back next time. >> thank you very much. >> thank you. still ahead, a game of quantum leapfrog countries and companies racing for the powerful quantum computers. one is going toe to toe with china in the process we'll discuss.

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welcome back i am rahel solomon here's your cnbc update. a key senate democrat calling for firing of the federal prisons director following associated press report that found that the agency failed to suspend numerous prison workers who were arrested for crimes the ap found more than 100 bureau of prison employees have been arrested, convicted, sentenced for crimes since beginning of 2019. a coast guard helicopter rescuing six adults and four children in northwest washington state. little if any rain expected today. many remain without power. in spain, celebrations of international flamingo day the backdrop for one of the performances, united nations started to commemorate flamingo day in 2010, but the dance traces roots back to 16th

century. >> i studied abroad there. >> i did not. >> thank you very much, rahel. beautiful to see. meanwhile, going inside the race for quantum supremacy companies and countries trying to develop the first computer to make the current ones objects looet. imq is the first startup to hit the markets. eamon javers has more. >> they raised more than $600 million in the ipo peter chapman showed some of the cutting edge computers they're working on. >> this is one of the quantum kpiers. >> this here >> yes. >> prefer you didn't running jobs for customers

>> those current customers include amazon, google, goldman, sachs, use it to develop quantum algorithms to model financial risk they'll be able to do amazing things, including within ten years being able to break most encryption used around the world today. >> everything that is protected today uses an encryption that quantum should be able to break. we already know theal go rhythm how to do it we're just waiting for the computer to get to be fast enough to be able to break it. >> and he also explained the engine powering the company's machines >> there's a set of atoms that levitate in a vacuum chamber, and the computers out back have 11 atoms we use them as cube its to similar what a bit is in a classical computer at about 120 cubits, one of

these devices will be able to consider the same number of possible states as there is atoms in the known universe. >> experts say quantum computers will ultimately run simulations for drug discovery, model climate change, solve logistics problems peter chapman told me that will spark a revolution in productive that will dwarf what we've seen so far, and could lead to profound change. computers could think better than human beings and contribute to end of work as we know it not everyone in space agrees with that, but people here are thinking very big. >> amazing stuff thank you very much. don't touch the computer >> that's right. never touch the computer. ahead on "power lunch," trading the evs we showed you the runup in the stocks earlier this hour. later, trading nation team will tell you if they're worth buying at these levels. another week, another working

lunch. jon fortt has an interview with another cheo ba wh that and more.

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session. let's get you caught up on the markets. stocks, bonds, commodities, pricing power is all the rage. start with bob pi sani >> the consumer is looking great. corporations are able to pass on higher costs, great retail numbers, great numbers from walmart, great numbers from home depot. look at the strong earnings here, how it is effecting consumer discretionaries etsy, new high lowes. ulta, a new high for them. tractor supply, a diverse group of consumer discretionary stocks, all consumer names despite worries about inflation, big multinational industrials reported great earnings and profit margins, remain strong passing on higher costs. industrial names, dover, eaton, illinois, tool works, big names like johnson controls, new 52 week highs travel stocks can't decide where

to go. the pandemic is over or not. rally in early november, straight down for a week and a half finally s&p poised for a new closing high we're going to beat that as of now. >> thank you so much let's get to the bond market rick santelli is tracking the action quite a day in bonds, the dollar, trying to make sense of it all >> yes and it is kind of a slow move in progress actually. we are definitely on the verge of a breakout, but it is certainly happening in slow mo you look at one month of tens, we did a u-turn in the last couple weeks we are now on pace, close at 1.63 yield or higher, going back to 25th of october you look at what was discussed through the day and with you

earlier, it continues to widen this is an important chart there's a one month chart. you can see how much distance between the yields has separated. right now, it is widest in seven months finally the dollar highest close since july go a year further back, you can see it is well below precovid levels >> thank you so much, rick santelli take a look at the energy markets, closing for the day investors are flocking into the sector pippa stevens has more. >> hey, kelly. oil prices surged and investors are indeed taking note wti is currently unchanged 80.85. both contracts have pulled back from multi year highs from october. u.s. oil is still up nearly 70% for the year according to new data from bank

of america, americans are piling into energy stocks at a record rate last week, highest since bank of america began tracking data in 2008 important to note that investors see this as a stock specific industry money actually came out of energy etfs, but that was more than offset by in flows for individual equities. >> interesting stock picking thanks. my next guest expects inflation to go higher before it normalizes and is focused on areas of the market with durable pricing power to maintain profit margins and deal with inflationary pressure. greg, good to have you is energy in your portfolio? >> yeah. look, i think energy is one of the most obvious areas as commodity prices rise, particularly going into heating months in the northern hemisphere that all gets passed on. up and down the chain, whether it is the producers or infrastructure, that is all

passed on at the utility level and to the consumer. that's one of the more obvious places people are seeking safety i think inflationary pressures continue. >> that said, the names you highlight here are often individual names in given sectors you think are particularly well poised give us a couple of examples if you want to start with software, talk about fedex, ups. you have some financials as well >> i'm trying to hit this from different angles that are not as obvious as the energy trade. software has historically had durable pricing power, both from perspective of hard costs required, upgrading, buying hardware and software and soft costs of taking time and man hours to implement, train, get the work force up to speed on software you look for names that have dominance in the field, unique intellectual property, continued to show us growth.

adobe is one of the names, outside of microsoft, no company that size growing that fast with those type of margins. they showed us 46% some of the unique intellectual property we talked about in creative document and experience cloud, and buying back shares. i expect that to continue to work microsoft is in a land of its own, showing us 45% margins. expect to see margin pressure. google has given 1500 basis points of margin expansion since second quarter, 32% last quarter. when you talk about pricing power, what we're really talking about in this environment is ability to maintain margins. the market will be focused where we are seeing market degradation. >> let's back up for a second, talk about where you think inflation is going because you have been in the camp saying janet yellen said 3% this

summer, you were saying more like 6 where do you think we'll be middle of next year? >> right i don't enjoy being right on this forecast. i was certainly not in august when i called for 6% cpi this year, and 5% pc this year, see if we get that later in the month. 5% cpi all the drivers are still in place. we still see shutdowns and disruptions at the manufacturing level, in some part due to low vaccination rates at some of the manufacturing companies like vietnam and indonesia. still see capacity constraints in terms of shipping with the corresponding elevated price rising we still see when they get to shore, supply constraints in terms of trucking, warehousing, in terms of containers all of this will continue to drive pricing. on the other side, the jobs

report we got last week highlights even wage inflation we should continue to see pressure there at the end of the day, we add more jobs, significantly more jobs than adding willing workers. at this point we have around 3 million more jobs than people looking for them that will continue to create pressure that is the stickiest of all the inflation. i expect it to continue well into 2022. >> you've given names to play. thanks for the time. appreciate it. coming up, we talked earlier about the stock battle brewing in the ev sector can this massive rally continue. if so, what name comes out on top. trading nation team will give yothr ayu eipls.

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electric vehicle stocks are on fire. s lucid hit 17,000, up from 13,000 in the third quarter rivian continues to climb higher, up 100% from the ipo tesla shares are rebounding, one day after president biden signed the infrastructure bill that allocates billions to the ev space. let's bring in the trading nation team. todd gordon, john pe treaty. you look at the three names, you could argue tesla is down in recent weeks because the ceo has been selling stock, but most proven business model of the three. >> you're absolutely right you look at the report from lucid, they brought on 4 billion on the balance sheet, it looks good a lot of attention focused on the electric power train they have a little bit of an advantage towards tesla there. these ev stocks are making crypto look boring

$70,000 cars it is a different market compared to tesla. $88 billion market cap 10% market cap of tesla, and only delivered 500 cars. this isn't tesla tesla delivered 600,000 cars this year. plus when you own tesla, you have so much more exposure to different industries insurance, energy storage, and spacex the autonomous vehicle will be one connected to the internet. i think tesla is the winner. crazy valuation now. >> clearly a lot of excitement around the space, more money flowing into the ev companies. at the same time, curious where you think investors should be putting money and how long the trade can last you know what, i don't think we have john. let me turn that question back to todd. how long can this trade last

>> specifically on the evs or within tesla >> within evs. >> i think there's just way too much hype going on in the ev space. people saw the amazing runup that tesla had, and they're thinking it carries through to other cars that are a fraction of production. i can't stress enough, did you see the news recently where the charging stations of tesla are now wired up with their spacex, with elon's spacex internet conversation this is the very first step of connecting the global fleet which eventually leads to this network. the other industries elon is moving into are not like these this is cryptoesque for me >> for more, head to the website or follow us on twitter at trading nation tune in tonight, the ceo will sit down with jim cramer,

6:00 p.m. eastern. tyler, back to you after a quick break. join us for a virtual working lunch. jon fortt sitting down with qualcomm ceo, dipping into the chip shortage and more that after this break. now the latest from tradingnation.cnbc.com and a word from our sponsor.

welcome back, everybody. time now for working lunch qualcomm became a chip giant in the cell phone era, it patented 3g and 4g technology, power efficient chips enabled new world mobile devices now that the phone market has matured, the ceo is outlining the next leg of growth at an investor day in new york city, and that's where we hook up with

jon fortt. hi, jon. >> hey, tyler. he took over as ceo in july. big part of the reason he got the job, 17 years at qualcomm, he fought to bring the company to new markets, new customers. what you may not know, he can literally fight. younger days, did competitive arm wrestling, studying traditional japanese karate, now working on his black belt. >> especially with the traditional japanese karate, when you are in the dojo, you disconnect from everything from the outside. and it is a great opportunity to clear your mind, clear your thoughts, you know, talking about it is that one hour that i'm not preoccupied with supply chain, how good the product road map is, and it keeps me balanced it's also a great humbling

experience as well as you go through all the things that you learn in martial arts those things have been extremely helpful for me, you know, in my career >> now, here's where he is directing the fight at qualcomm today. opportunities fight at qualcomm. opport opportunities smart phones why peloton bikes and amazon's robots part of the internet things with qualcomm technology in them. partnership with walmart are a third and the devices like these connect to the cloud they need horsepower to drive decisions. >> retail is one of our fastest growing revenue streams. we have been actively working with walmart we are proud of the partnership and the opportunities across a

number of areas. how we think about labels with electronic shelf labels. the cameras in the store the checkout, self checkout. points of sale it is going very fast. and it's part of that 700 billion overall industrial opportunity of the edge which is really driven by digital sales. >> he grew up in brazil. played soccer. controlled intensity is how hi'd describe him but don't let the smooth taste fool you. he is arguing for qualcomm's place at the center of a boom driven by ai a ten street appears to be buying it. stock is up more than 6% with the nasdaq up fractionally all-time highs for qualcomm. >> feels like a couple years

ago, the narrative is simpler around smartphones and then had that falling out with am l how much is happening behind the scenes to make it feel like the smartphone isn't even in the conversation >> the narrative a couple years is like qualcomm's dead. right? >> yeah. >> apple was against them, not paying them for the licensing. had issues with huawei but qualcomm believed all the way through that their r&d with patented technologies to win out and trying to tell this story of expansion beyond the smartphone and then the smartphone booming and nobody's paying attention to that but focusing on the phone itself similar to apple where a couple years back they started to talk more about services. over time that's a story that the street is willing to embrace. when phones are making that much money the street will focus on

phones but now beyond phones with the partnerships of bmw and others that he is talking about. >> it is paying off handsomely thank you. >> have you been a karate guy? >> no. i threw a punch in my whole life and broke my hand doing it. >> not one of these guys. >> a lover not a fighter. >> college athletes capitalize off the fame for the first time but are they prepared to manage this much new income sharon epperson takes a look ♪♪ in boxing or any other business, one day, you're gonna take a hit you didn't see coming.

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college athletes can now capitalize off their fame but how have do the students know about managing money sharon epperson talks with a few athletes on the quest for financial success. >> college athletes like basketball forward alley yeah boston can prosper from the name, image and likeness it's a way for them to earn income. >> put in a lot of work helping the school so i think it's great to make something off of it now. >> reporter: one of the top players in the college boston says she started receiving messages from companies asking her to represent their products. >> someone asked me about doing a promotion for the new chicken

sandwich. >> reporter: she hired an agent to negotiate the deals including with be jangles. >> hosted an instagram reel and on the. >> reporter: several teammates have signed sponsorship said the head coach and hall of fame. >> we have 16 players. it is probably more than half with some of them have luke rative deals or just being influencers. >> reporter: as more deals come into play it's time for college athletes to create a financial game plan. >> i need all those college athletes about to make the checks and about to make that money to understand how your money works and put a budget in place so you're not caught without the money to pay that tax bill. >> reporter: penn state offensive linebacker turns to family. >> my parents are doing a good job to help me manage the deals

i get. >> reporter: the sponsors are a car dealer and apparel store and is earnings go to the long term goals. >> i see myself, you know, in the next few years starting to invest a lot. >> reporter: university of georgia track & field star turned influencer matthew boling has tens of millions of views. with over a million viewers he grabbed the attention of taco bell. >> it is fun to be a part of it and eat tacos. >> reporter: he says his first deal has been a game changer do you feel like you are already a ceo of your business >> been really careful about my brand. i feel like the ceo. >> some students are eager to take courses and some colleges and universities have partnered with outside firms to offer financial education sessions to help students and families create a financial playbook.

kelly? >> incredible. this many people are already involved and students have been excited to get the money now that the flood gates opened? >> you know, what's really interesting is they're strategic about it many look at the long-term game. they want to be professional athletes and build a brand over time and careful and selective in terms of the deals and the ones they say yes to. >> it is interesting to see how the quote influencers which is my great ambition in life is to be one but that's another subject, how social -- if you create a brand on social media, product companies will find you there. and they will then rope you -- not rope you in but atraktd you to pushing the products and isn't this how it starts >> a lot of it starts and that's why you see athletes in sports not men's basketball and football getting big deals, too,

because they have great following. >> you have the following. i go on the peloton wthey're bi players on instagram and promote products, food and beauty products thank you. >> you are selling yourself short. you have the og influencer you are on tv before social media existed. >> that's right. cable before cable was cool. thanks for watching. "closing bell" now. welcome to "closing bell." i'm wilfred frost at the new york stock exchange. the consumer in focus today as strong retail sales boost sentiment. major averages higher heading into the final hour of trade i'm morgan brennan in for sara eisen. retail sales rose 1.7% in october topping estimates. home depot and walmart topped estimates before the bell on the