products and 90% will be sourced in the united states people will be able to get it. ten times eastbound baugh. group is at 14 stuff i like it. >> carrie? >> booking holdings is down 20%, people are traveling >> joe >> lam research. >> good stuff. thanks, everybody. love having you here >> what a great show >> fun as always thank you. that is it for us. "the exchange" begins right now. ♪ i'm jon fortt in for kelly evans. here is what is ahead on "the exchange." markets rebounding after yesterday's brief tell pare tantrum but the turbo taper seems to be all systems go, so when do rate hikes begin we will look at the bull and bear cases for stocks as the fed tightens when should you be buying, what should you buy plus, travel restrictions could be tightening, so what does it mean for airlines and other travel stocks? are they worth the worry we will get to that and more, but we begin with dom chu with an update. >> john, i have to tell you the market right now is interesting. yes, it is green across the

screen, 200 point gains for the dow. s&p is up 1% half a percent gains for the nasdaq composite, but we lost some momentum as we hit the midday zone of training. the best performing sector is utilities, so i'm not sure what it says about the strength of a major recovery right here. one of the reasons we are paying close attention is we have seen rates rebound a bit but come off the session highs. as you can see, just a hair below 1.45% for the ten-year treasury note yield. still generally moving lower over the course of the last couple of weeks here and exacerbated by the sell-off we saw basically on black friday. again, a move lower in rates generally speaking we are waiting to see if it breaks out of this range here right now it is moving to the downside of that particular zone another place that saw some real strength earlier in the day that is waning a little bit right now is the energy sector oil prices behind that as well exxonmobil up about 24%. some news about some of their carbon emissions ambitions in

the coming years and what not playing in the headlines today chevron is up a percent. valero energy up 34.5% apa up 1% we will see if it picks up in the afternoon session. john, over to you. >> thank you fed chair powell and fed chair secretary yellen are wrapping up their second day of testimony on capitol hill. steve liesman joins me with the latest steve. >> hey, john yeah, fed chair powell in his day two of testimony maintain his high level of concern over inflation and reiterated the fed will discuss a faster taper timeline at its upcoming meeting in about two weeks he said there's no reason it should be disruptive to markets. >> you can see that the highly accommodative policy that we have, even after the taper is done, there's really -- it is really appropriate that we -- that we taper. as i mentioned yesterday -

>> i agree >> -- in my view it is appropriate we consider at the next meeting tapering faster so that it wraps up a few months earlier. >> a lot more politics today republicans in the hearing working to pin the current inflation on the bide inadministration's spending policies democrats blaming the pandemic and supply shortages for inflation and accused republicans of ignoring strong economic and job growth. powell as he always does agreed with both sides saying growth is side but fiscal policy can play a role along with supply bottlenecks. with the blackout period push, we're not likely to hear from powell until the december 15th press conference, so unless the new virus variant turns out to be alarming the fed looks on track to speed up the taper. >> it is like pin inflation on the donkey, i suppose, where the democrats are concerned. but is there anything that we heard from chair powell today

that put more meat on the bone from what we seem to be hearing in the lane change up to this point? or did the politics get in the way of clarifying any of that? >> no, john, you had politicians, not federal reserve reporters asking the questions of the chairman today. i would have asked him how much would you do in terms of the taper. i think you have to start thinking about maybe doubling it why go up in $5 billion increments if you are going to speed it up, why not speed it up fast he said a couple of months, so maybe $30 billion is the right number from $15 billion, but we didn't hear more meat on the bone around that the next question is i would ask, when are you going to start hiking >> i wish you were asking the question stick around let's bring in bob pisani for more of the market's reaction to powell bob, we are off the highs but the testimony has been going on from chair powell and treasury secretary yellen for quite a while. what to make of it >> you know, i will tell you,

think about how much things have changed in the last week, john a week ago the biggest concern of the markets was a modest outbreak of delta around the world and would it get worse now we are fighting a two-front war essentially with omicron which we didn't hear of a week ago and the federal reserve which flipped on the transitory theme. that's a problem for the market. the bulls are still very aggressive the bulls are arguing it is likely the whole omicron thing will blend into the delta wave maybe, but they believe the fed is going to keep up modestly raising rates in 2022. it is unlikely there will be a sudden fast track. the consumer is going to remain strong that's probably likely true. the big debate is whether margins will remain up there 13.5% is the record margin this year the bulls are arguing it will stay up there because they will still have pricing power the bear case is, you know, omicron is a lot worse, it could lead to a wave of lockdowns, but most of the bears have focused on the fed because the fed raising rates quicker than the market anticipated is the

historic killer of bull markets. that every trader knows about and believes in. if that's the case, tech stocks are overpriced right now and have to be sold off. so where are you on the interest rate scenario? where are you on how aggressive the federal reserve is going to be, and that's the big debate right now. >> bob, what's your sense of how the market has digested the omicron news since friday, when there seemed to be this kind of reaction to it zoom shot up i think it was well above 200 a share, up above even 225 but since then, it has mostly come back down that's kind of a pandemic play example. but, meanwhile, things have been moving around some so has there been some, i guess, rationalization or is this still knee jerk, just from different hammers to the knee? >> no, still completely knee jerk because we don't know how to value tech stocks right now i hate to keep coming back to that, but, remember, the answer -- through all of this

covid mess, the answer to every confusion on covid, covid, delta, omicron, the answer has always been tech wins no matter what happens if it gets better or worse, tech always wins. even now with the second wave of delta we were dealing with, weeks before buy tech, europe was notably weaker outside of that cyclical stocks have been in a slow descent for weeks now many hit highs earlier in the year, so buy tech. all of a sudden if you get notably higher interest rates than anticipated, you can't keep buying tech. it is too expensive and historically that won't work that's why the market is in a bit of a mess right now, it can't quite decide much will depend on whether the market believes that powell is going to actually be more aggressive raising rates or even whether the ten-year will move up at all. a lot of people were saying the ten-year telling us this isn't going to happen, that a lot of the concerns are overblown on inflation. >> speaking of inflation, steve, a question for you on that,

particularly the word transitory i thought i heard powell say something that implied that it is not that his feelings about inflation have changed that much it is that people read the word transitory differently, so they might not understand exactly what he means. so that's part of the reason for retiring the word. >> yeah. >> what can you tell me about that >> yeah, i mean a fed official will use that kind of rhetoric when it helps him and it stopped helping him, it stopped explaining anything about fed policy, it stopped being true so he cast it off i want to get back to something that bob was saying. i think every investor needs to step back and think about the portfolio and the investment choices in a fed that is at least normalizing. i don't know that the fed is going to have to ratchet up rates and really stamp down the economy in order to get control of inflation, but the idea that the investment prospect is going to be one of zero interest rates forever or even for a year is

probably not right sometime in the next year the fed is going to start to raise rates, and i believe attempt to normalize policy, whatever that means. you got to think about what is normal, how fast the fed goes, how far it goes, and what is the underlying value of stocks bob put up that chart showing that margins were 12% to 13% earnings go up pretty much all the time, but high margins don't stay there all the time. that's something that needs to be also discussed. if workers get higher wages, that cuts into margins unclear to me companies can protect those sort of high margins all of the time, so things are going to change in the next year and i think people need to think about that, especially when it comes to those assets more on the periphery that have seen very high valuations. >> bob, when was normal? >> i'm sorry >> when was normal, right? >> oh, my gosh it was before 2009, i can tell you that i mean, look, one of the things that as a stock market reporter i have had to deal with is the

roll of liquidity in helping the stock market i'm an old school guy, a fundamental guy. stocks are determined by dividends, future dividend streams, future earnings stream, and a speculative element. we call it the market multiple, how much you are willing to pay for a dollar of earnings beyond that there's a whole new school that developed since 2009 to study liquidity liquidity is how much money is there out there, and the federal reserve has been pumping money for the last 12 or 13 years into the economy, much found its way into the stock market. so everybody, bulls and bears agree, the market is higher because of the fed's liquidity how much higher would it be if the fed hadn't done anything we don't know, but it is definitely higher because of that so we're trying to address what does all of this liquidity mean and what does withdrawal of liquidity mean >> right >> that's why the market freaks out. we don't have an answer. we don't have a historical precedence for this liquidity tidal wave the fed has been engaged in >> yeah, it has been a long

time i guess we're about to find out. steve, bob, thank you. now, my next guests say don't fear a faster taper as it doesn't necessarily mean the fed is going to be less accommodative. joining me nowwith how to play it are mark avalone and mary ann montagne welcome to both of you mark, accommodative in what way? >> well, a taper -- they're withdrawing this huge stimulus, the bond buying program, but it is a long way off from raising rates. global rates are nowhere near positive in many developed countries. global growth is going to struggle with the same issues that they faced pre-covid. europe hasn't solved their problem, the excessive regulation, the aging populations. japan, the same problems over there. i think we're getting ahead of ourselves by thinking that the global economy is going to be roaring. we don't operate in a vacuum, so

i think we will finish the taper and then there will be a pause before there's any fed action. i think the bond market is telling us that, and i think that's another reason why tech stocks have done well. >> mary ann, i wondered, kind of piggy backing off the last conversation that steve and bob and i were just having, things are so far from normal, especially with the amount of volume that retail investors have in this market, the amount of options trading, the amount of trading on margin, that as things -- as conditions change, i'm not sure how volatile the market is going to be in response to that what do you think? >> well, first of all, there's no such thing as normal. i have been around a long time, and there's always excesses here and excesses there and we are just noting some of them, as you said, john what i think is that with that -- and i agree with mark. there's not a decision to raise rates, but given the spectrum and of their covid mutation,

investors have been moving to quality across the board you know, that's driving up the price of bonds and driving down yields on the benchmark ten-year at least we think the trading in the last few days may be part of year-end window dressing as losses were taken in small cap software stocks particularly. and in the movement toward quality, i think what most people don't realize is that apple, which this morning i heard compared to a bond for some odd reason, with its 30-multiple on next year's earnings and slowing growth next year, what people don't realize is it is not a larger percentage of the s&p than the staple sector, the energy sector, real estate and utility sectors that's way beyond normal that's way out there but, you know, there's caveats to everything, including the fed's decision about the omicron variant and treatments too in the coming days.

so we still believe the health of the economy depends on the health of the population >> well, you said apple, so maybe the other side of that, mark, i think you like it, right? >> well, we do i think there is such a thing as an entry point and maybe not chasing after it, especially after it ran up so much this week but certainly apple is generational my kid doesn't know anyone who doesn't have an apple, and i think that's replayed throughout the country. there's going to be generations upon generations of people expanding into the apple ecosystem. they're buying accessories the apple tv is going to be one of the winners in streaming, so it is a question of what price you want to get in, and we think streaming is going to be a big driver in the future that's one area that we think will be strong whether there's a covid melt-up again or even if we have more of a reopening. we think that's going to be the delivery system. apple's poised in so many areas to benefit

>> mearianne, you said apple is safe you like gold. is that for the traditional safety reasons >> yes, it is -- and its inflation expectations are moving higher for longer it historically served as a store of wealth in an inflationary environment we don't have that history in any other asset class, and in a highly volatile market it is a safe harbor. that's what we've been seeing for the last three weeks it could continue through year-end, so i do think gold is a good place to be >> all right i guess gold is still gold, even if to some people apple is like a bond can't figure that one out. mark, mariann, thank you >> thanks, john. still ahead, chip stocks have tripled since their march 2020 lows. several names are coming off their best months in years so is there still room to run or are the semis set for a pull

back plus, we will speak with the ceo of ibm's red hat unit about the state of software and what is next for the cloud. as we head to break, here is a look at the s&p sector heat map. ten of the eleven sectors are in the green with utilities leading the way. "the exchange" is back after this this is "the exchange" on cnbc

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ma ♪ welcome back a hand full of chip makers including lam research and nxp hitting record highs today. with competition in the space heating up, can these rallies continue christina partsinevelos joins us with more. >> the rally is continuing, as you mentioned, although parts are expected to be in short supply until well into next year it remains consistent with chips makers such as nvidia and intel. also accelerated by the pandemic, so that's driving prices higher for these stocks semiconductor etfs posting their

best monthly gains in a year qualcomm has seen the best month since april 2019 amd, best since july 2020. nvidia posting the best month since may 2017 intel, which i want to focus on, is relatively flat for the month, is just $5 billion in market cap away from being eclipsed by amd in total size. so as the shortage persists, demand and competition keeps ramping up, companies are stepping in to produce their own custom chips to fill the gaps. for example, amazon web services, the latest to announce on tuesday, two new custom computing chips seen as future alternatives to both intel and nvidia here is the aws ceo, jon, who i know you spoke to earlier on cnbc on why their chips are competitive. >> it is really important and material advances in price performance, and customers just keep demanding more and more and

more >> and demand that the united states wants to accommodate. the chips act could authorize $52 billion in subsidies for domestic semiconductors manufacturing, but it is still sitting in the house after passing the senate in june it is up to capitol hill to see if production will ramp up and help fill the shortages. jon. >> a lot at stake there, christina. thanks with more companies moving chip production or at least chip design in-house, a new report from b of a securities points out why u.s. firms will make up 60% of global chip revenues. production capacity dropped from 37% in 1990 to just 13% in 2020. so as the u.s. ramps up production, which companies will be the winners let's bring in vivek aria, senior semiconductors analyst with b of a securities great to have you. i wonder, it is interesting here you have global foundries in the mix, which is not on the latest technologies process

you have intel which wants to be on the latest process technologies and you have a huge divergence in valuations where amd is just now within spitting distance of intel, whereas a little bit ago it was just crossing $100 a share. now it is over $150. where do you place your bets here >> thank you, jon. thanks for having me like you said, a lot of cross current and i think the big picture view is that over the last 30 years the semiconductor industry has essentially created these centers of excellence. you have a lot of the advance chip design being done in u.s. and europe you have a lot of the consumables, a lot of the raw materials in japan you have the advanced logic fabs in taiwan, and you have a lot of memory production led by the koreans. that structure has been very profitable and optimal for the semiconductor industry but as you pointed out in the segment before, what we're seeing is a combination of supply disruptions, the correlated disruptions, and on top of it the longer term issue

around geopolitics where every country in the world wants to be self-sufficient in the production of semiconductors >> right >> so how does this play out i think this plays out in the lagging edge over the next year or two where there is a lot more capacity, that companies such as texas instruments, microchip, global foundries you mentioned are putting on but then the leading edge sidle probably take a number of years, anywhere between three to five years in terms of different countries being self-sufficient. and in our view, the most important beneficiaries of this trend will be the semi cap equipment makers such as applied materials, lam research and others >> yeah, and i guess i'm not sure if it is in your coverage universe but axml might fall in there. between say design, packaging, process technology and equipment, what do you think will be most strategic in semiconductors overall say over the next three to five years

so if investors see that they think a company has a particular advantage in one of those areas, that's where they should lean. >> sure, jon i think from our perspective the three big trends in semis are cloud, cars and capex. so those are the three cs in semis. in cloud it is essentially companies serving the cloud makers, serving the new metaverse trend. those are the nvidia, the amd, the marvell, the broadcoms of the world. on the cap side,, that includes lam materials, applied research and tara dine. it will take a combination they're creating a deeper relationship they're really extending what it means for semiconductor companies to be more productive in this new cloud computing era. on the other side you also need the back end to come in and make sure that those products are designed and delivered with a

great deal of skill and reliability. >> so it is -- >> i think it is a complementary approach >> what in a way though is a fair price to pay for a hot product? by product i mean stock in this case i look at, say, qualcomm, amd, nvidia all of them doing extraordinarily well but all of them perhaps ebxpensive dependig on how well you think they can do from here how do you judge what is a good price? >> sure. so the first thing i think we have seen in technology stocks is that what really drives them is the size of the opportunity and the company's competitive position and its execution and if you look over the next five or ten years, i think there is a lot more of the workloads that are moving to cloud, and that requires very advanced level of scale, ip, worksing with the software ecosystem that in my view very few companies are able to achieve that someone like nvidia is absolutely on the forefront of that but in addition to what is happening in the cloud and the

data centers, kind of the main part of the network, you also have companies coming up on the edge as more intelligence spreads to the edge like the ones you mentioned in terms of valuation, the other point i would make is if you look at the index right now it is basically trading in line with the broader s&p 500, but the companies here are extremely profitable we're talking about profitability levels that are two to three times what you would see from other industrial companies, and that's why we think some of these valuations are justifiable since these companies are providing access to some of the most important long-term trends in the market >> okay. certainly keep an eye on that. vivek arya, thank you. >> thank you before we go, we mentioned amd. jim cramer writing in his newsletter today that his charitable trust is selling 50 shares, solely for portfolio management purposes. he says he remains bullish on the company in the long term and

that amd has stood out as one of the better relative performers during the market volatility for more of jim's insights sign up for the cnbc investing club newsletter by pointing your phone's capra at the kbrks r c q code on the screen still ahead, it has been a turbulent week for airlines 'they deal with the new covid variant. as we head to break, let's do show and tell. that's where we show you the chart and tell you the story robinhood is on pace for the 11th day of losses in the past 12, down 30% in that time. cathie wood joined sara eisen for a cnbc pro talk this morning where she explained why she is still bullish on the name. for that full interview head over to cnbc.com/pro here is a sneak peek of what she said >> at the end of the day we do think the stock is settling down it has the best user interface out there for retail investors

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♪ welcome back to "the exchange." markets losing steam with the dow off session lows of 119 points today's gains still not enough to completely offset yesterday's losses, but here are some of the movers this hour the retail etf xrt is lower today, down 3% since monday, putting it on pace for the third straight week of losses. that's its longest losing streak since march 2020

crispy cream is down 7% after goldman downgraded the name from neutral to sell and set a price target of $14 a share. the firm said it will struggle to deal with inflation as labor, delivery and ingredient costs continue to rise the stock is down 36% since going public in july and never surpassed the first day closing price of $21 a share now to rahel solomon for an update hi, jon. a fourth student has died from the shooting at a michigan high school on tuesday. seven other victims were seriously injured and hospitalized including a 14-year-old girl who remains on a ventilator after surgery the 15-year-old suspect still has not discussed the incident with police. on the news, how prosecutors may charge the suspect and the latest details on how the shootings unfolded that's tonight at 7:00 eastern president biden assuring americans shelves will be stocked and efforts to end supply chain bottlenecks are working. >> we're heading into a holiday

season in very strong shape. it is not because of luck. we averted potential crisis by figuring out what needed to get fixed and then we brought people together to do the hard work of fixing it. >> and the house freedom caucus wants senate republicans to block efforts to keep the federal government from running out of money the group said republicans should oppose a continuing resolution to fund the government unless president biden ends federal vaccine mandates you're up to date. back to you. >> rahel, thank you. a news alert in the sports and gambling space contessa brewer , could las vegas be picking oakland's pocket again >> reporter: well, guess what, jon. the news that we have comes from the oakland a's president who told "the "las vegas review journal"" they had picked a site for pa potential ballpark for the a's to move. they've already received the blessing from the mlb to consider the move to las vegas, and now i'm hearing from several

sources here on the ground at the spc sports betting conference in new jersey that the site is likely bally's tropicana. so tropicana is the casino on the strip, and bally's is the owner of that. glpi owns the lands underneath it but there's a lot of land available, certainly enough for a professional baseball stadium to go on to the tropicana site i'm also hearing that under consideration has been the golf course at wynn resorts and also a lot that cesar's has, although i've heard definitively cesar's is no longer in the running as a potential baseball site. what stands in way of actually getting the bid done first, a bid on the tropicana would have to be accepted by bally's. secondly, they would have to figure out what that public/private financing plan looks like that's a very important piece for mlb. don't forget that the public/private financing has already happened for allegiant stadium where the raiders play

and also for the new convention center there so definitely hurdles to get over before the a's make the move to las vegas, but it looks like the favored site for now is bally's tropicana. >> all right >> jon >> first the raiders and then the a's. contessa, thank you. coming up, airlines lower once again today with the travel rule book on testing and tracing involving should you stay clear of this space or buy the dip that is next

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calhope offers free covid-19 emotional support. call 833-317-4673, or live chat at calhope.org today. ♪ it's been a wild week for the travel sector thanks to the uncertainty over the omicron variant. cdc is now ordering u.s. airlines to disclose passengers who have been to south africa. delta, united and american down double digits for the week the biden administration considering additional covid testing requirements for air travelers entering the country given the headwinds, should you

sit this trade out joining me now steve grasso, grass owe c eshs o and cnbc contributor. i'm guessing based on the names i see here that domestic names might be the way to go given the covid situation you think? >> yes, john i think that that's probably -- the way i played this is the same way that i played the original pandemic, where if you looked at what was going to really get hit hard, it was going to be international travel so the way i thought about that back in 2020 was what is going to come on or come back online quicker. for me it was the domestic airlines now if you look at it the same way, european, international travel is probably going to be a little bit slower to come back online, and if people want to go on vacation, where are they going to go? they're probably going to stay at home in the united states just onerous as far as

restrictions i think that the ones that are going to benefit will be your spirit airlines, the jetblues of the world, and to a lesser extent luv. >> yeah, why to a lesser extent? i was wondering why i didn't see southwest in there why not? >> because you have -- you have a little bit of the south american and caribbean travel in there, which is a larger piece than the other ones that i would start off with jetblue has expanded obviously out of the continental united states as well, but it is known to be more of a domestic it is associated with being more domestic than that >> how sensitive are these even domestic names going to be to energy prices and to headlines around the holidays about how much travel people are doing for christmas and maybe even domestically looking for warm wea weather climes during that period and after >> yeah, i think you are going to have to say -- first of all,

as a professional trader for just about 30 years, you have to realize that the market really is a forward-looking mechanism so a lot of this is already in the stock price. so the way i look at these prices of these stocks and the drawdowns that we've seen recently, jon, is that if you go back to 2020, those lows that we saw in late april of 2020 and then the peaks that we saw just about a year later in all of these airlines, the retracements or the backing of up stock price is either at the 50% level or more so you are getting an incredible discount on a lot of these names. everything that you just mentioned is already, quote, unquote, in the name in a lot of these discounts that we've seen recently so if you look at the international travelers or whether it is american or whether it is delta, delta had a huge amount carved out because you're assuming that corporate

travel is never coming back. >> right >> we know that's not the case we know there's a couple of headwinds that you just stated that are right in front of us. i just think that if you have the stomach to sit and hold a position in these international travelers and the domestic airlines, i think you will be rewarded handsomely if you can extend your position >> everybody likes an airline discount steve grasso, thank you. coming up with the deadline fast approaching, the race to avoid a government shutdown just got more contentious we will tell you why next.

♪ welcome back now that turkey day is over, it is time to play chicken. with just two days until friday's deadline, republicans are now publicly threatening to force a government shutdown if democrats don't give into their demand regarding vaccine mandates

ylan mui has been following that fight and joins me with the latest >> reporter: jon, it is a very different place than where we were 24 hours ago when both sides sounded confident they could reach a deal before friday at midnight. now that optimism is waning as conservatives warn they're willing to derail this entire process to protest the president's vaccine mandates in a letter out today, the house freedom caucus urged the use of all procedural tools to deny timely passage of a continuing resolution unless it prohibits funding for vaccine mandates and enforcements that means the government could risk winding up in a weekend shutdown that democrats say would only backfire on republicans. >> they think somehow creating chaos, which they're masters of, will hurt president biden. it is not going to work. we're prepared to act. >> reporter: the other problem is republicans and democrats still have not agreed for how

long any stop gap measures should last, whether it should go into late january or into february the house was supposed to vote on that funding measure today, but, jon, right now it is literally a question mark on the official schedule. back over to you >> ylan, what happens if they don't reach a deal and what are some of the politics behind this move are vaccine mandates so unpopular with the republican base even if a deal is done, the fact that they pit up this resistance will be beneficial? >> reporter: yes so the reality is that eventually lawmakers will fund the government there are enough votes to pass this continuing resolution the question is how long does it take them in order to do that, and they might miss the friday deadline this is causing a little bit of a rift within the republican party, because some republicans, even those who are against the vaccine mandates, saythis is not the right way to draw attention to this issue at a time when we're, you know, battling new variants. do you really want to even flirt

with a government shutdown, even if it is just a short one? so republicans are debating amongst themselves the best way to go about criticizing this policy that many of them don't agree with >> well, we'll see what the polling says about the popularity of the policies, and oftentimes that has an impact on at least how long these things take ylan, thank you. up next, despite shares of ibm falling nearly 12% since the acquisition of red hat, the deal has proven to be a multi-billion dollar boost to ibm's overall business we will talk to the red hat ceo about that and the future of cld mpinne ooucoutg xtn "the exchange." we will be right back.

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c ♪ welcome back i want to get a check on the market here. you can see the nasdaq has turned negative. the dow is heading toward the flat line. s&p, which had been higher by well over a percent, is now just fractionally higher. this after reports that there may be the first case of the covid variant, the omicron variant in california. we will have more on that as we get it, but the major indices reacting negatively to that, as they have since friday when news of the variant first emerged and

began to hit markets meanwhile, it has been more than two years since ibm brought cloud company red hat for $34 billion, the largest software acquisition at the time. since then red hat has driven nearly billion in business for ibm. enterprise software has become even more important since covid. what is next for the software companies behind the technology. joining me, red hat's ceo, paul cormier. i like to call this cloud week aws reinvent is happening right now. not only hybrid, but multicloud have become increasingly important trends in the space. red hat has been there longer than anybody, one could argue. how is the affecting the requests that you are getting from customers >> i mean, you know, it really is everything we hear about from

customers. you know, one of the things -- we've seen this coming for a long time because open source software and linux is really the heart behind all cloud computing. open source development has been the model where innovation's really grown over the last 10, 15, 20 years, especially in the infrastructure space in the ente enterprise essentially open source development has become mainstream, and linus has become mainstream so this is what our customers are starting to look at for their future we hear these things from them every day. that's what we are addressing. >> some months ago i remember talked to the ibm ceo about how ibm is looking to serve customers however they want to be served even if it means not necessarily getting the sale for a different ibm division aws is coming after main frames

this week trying to get people to migrate at reinvent how much is red hat able to serve the type of customer that's maybe even moving off of other ibm technology >> whether it is mainframe or other technologies that are in the current data center, i mean, we are talking here about a shift over time. i mean, cloud computing has been around for 14 years? something like that. maybe a little longer. and early on, when we talked cloud a lot of people were saying we are going -- every application is going to the cloud tomorrow that really -- once they got into that and looked at that, that's really kind of impra impractical. what cios are doing today they are looking at what their overall architecture is locking lining and where applications need to sit, some will sit on premises, others in one cloud,

still others in different clouds that's what we have been blowing out in the last eight years in architecture most of it is built around linux and open source. and we have been helping our customers get on that technology for over 20 years now. >> a really important trend, especially as businesses consumers rely more on technology during these times. paul, thank you. paul cormier, ceo of red hat. now more on the first case of the omicron variant identified here in the u.s meg tirrell joins me now meg, what do we know about this case is it in fact a case in california >> yes, john, the cdc is confirming the first case the omicron variant here in the united states. they are noting that california and san francisco departments of public health have confirmed this recent case of covid wassed cause the variant. they note the person was a traveler who returned from south

africa on november 22an. they say the person was fully vaccinated and had mild symptoms that are improving the person is self quarantining and has been since testing positive cdc also adds, all close contacts have been contacted -- >> i have got to interrupt you the presser -- the white house presser on this is beginning we want to get to that. >> cdc have confirmed that a recent case of covid-19 among an individual in california was caused by the omicron variant. genomic sequencing was conducted a the university of california at san francisco, and the sequence was confirmed at the cdc as being cryst with the omicron variant. i know there are a lot of questions. here's what we know right now. the individual was a traveler who returned from south africa on november the 22nd, and tested positive on november the 29th. the individual is self quarantining, and all close contacts have been contacted and all contacts thus far have

tested negative. the individual was fully vaccinated and experienced mild symptoms, which are improving at this point so this is the first confirmed case of covid-19 caused by the omicron variant detected in the united states. as all of you know -- of course we have been discussing this we knew it was just a matter of time before the first case of omicron would be detected in the united states. as you know and we know, i have been saying it, my colleagues on the medical team and others have been saying it we know when we need to do to protect people get vaccinated if you are not already vaccinated get boosted if you have been vaccinated longer than six months ago with an mrna. and two months if you had j&j. and keep masking in indoor

settings et cetera. yes? >> i am going to call on people. go ahead. >> should the american people change anything they do in their day day life >> that's a good yes, an obvious question if you look at the things that we have been recommending, they are just the same. we want the keep doing that and make sure we pay close attention to in a. >> are there other case that the cdc is investigating as potential omicron variants in the u.s. right now >> to my knowledge at this point, no. >> what should we take away from the fact that this person symptoms appear to be mild at this point have all the other travelers on the plane been contacted >> this is what we call in medicine an n equals 1, which means you can't take anything from a single patient. it is good that this patient had mild symptoms and the symptoms appear to be improving as we said, there is a lot of

information that is now evolving out of countries like south africa that have a much larger number of individuals not only who are confirmed but individuals who are probables, which means they are going to have a lot of experience, which we will benefit from here as the weeks go by. some of you heard me say that in a matter of two weeks or two and a half, three weeks we will know a lot about transmissibility, about whether or not it essentially eludes some of the protection from thing like monoclonal antibodies, whether or not the disease itself, in general s going to be severe, and what is the difference in an individual who has been vaccinated versus not vaccinated, boostered, versus not boosters we are going to get that information. i appreciate your question about one individual but we are going to get a lot more information. >> you said this person had been fully vaccinated had they had a booster shot yet?

>> to my knowledge, no >> and the cdc is considering having stricter testing requirements to get into the united states a 24-window before taking off, but also is considering having a period of retesting once you get back to the united states. would that have helped in this case if that was already in place? >> i am not so sure because this person did what we hope others would do they got off, as soon as they became symptomatic they went and got tested and it was positive >> clearly this is something affecting the united states. >> it is obviously all things being considered and under discussion i don't think i can make a same about when and if that's going to happen. >> dr. fauci, in addition to any new testing requirements, what with new requirements for self quarantining for travelers, which in this case might have made a difference if he was quarantining for seven to 14 days. >> the recommendation is that

people, individuals, would self quarantine if they are not vaccinated and would also get tested within a period of three days that's a recommendation root now. >> reqcan you high pressure us understand why the travel ban is effective right now for those particular eight countries, especially when omicron has been detected in other cups, including here in the u.s. >> if you go back and look at when we first found out about the cases that were emerging in south africa, one no feels -- i certainly don't -- that a travel ban is going to prevent people when are infected from coming into the united states but we needed to buy some time to be able to prepare, understand what's going on, what is the nature this infection, what is the nature of the transmissibility and we wanted to make sure that we didn't all of a sudden say it's like anything else, don't worry about it, and then all of a sudden something unfolds in front of you that you are really not prepared for so we look at this as a temporary measure. >> thank you

dr. fauci, do you support a vaccine requirement for domestic flights? the president was asked about this earlier this week and said that had not yet been recommended to him you are his chief medical adviser. do you think that's something that the country should adopt. >> i wouldn't say that should be a requirement. i have been saying all along we have 60 million people in this country who are eligible to be vaccinated who are not let's get them vaccinated. let's get the people who are vaccinated boosted, let's get the children vaccinated. that's where we want to go in terms of a requirement. >> this is one of the ways that -- the osha mandate had held up in court this would be a way -- >> that's a possibility. but for the people listening to this, we have got to talk about why it is important get vaccinated i think what's happening now is another example of why it is important for people to get vaccinated who have not been vaccinated also boosting. boosting i