coal there's export restrictions in china. supply chain issues. that's adding to the increase and weighing on food prices which has hit a 10-year high but overall this could continue into the following year with these trends especially nat gas. >> it's all connecting energy to food and all connected. >> thank you for watching "power lunch." >> stay tuned. "closing bell" starts right now. ♪ welcome to "closing bell." i'm courtney reagan in for sara eisen. we head boo the final hour of trade. >> i'm jon fortt wilfred frost will join us in a moment let's look at what's driving the action uk confirming a person infected

with the omicron variant died. it's spreading at a phenomenal rate energy is among the worst performing some of the meme stocks are hit particularly hard. amc and gamestop down sharply. 59 minutes left to go in the session. court? >> it's going to be a big show, jon. in a moment an exclusive interview. wilfred will join us with ceo games gorman we don't hear from him that often. >> bob pisani is tracking the moves at the new york stock exchange josh lipton at the nasdaq. bob, what are you looking at >> jon, again we are dependent on omicron headlines and take a look at the dow decliners all

cyclical stocks dependent on the economy. see weakness in financials like american express and goldman sachs and a spattering of consumer names disney affected by omicron headlines. energy is a proxy for global travel essentially and growth. oil down a bit today chevron and the dow down in terms of new highs, we have several new highs in the dow it's defensive names like pfizer and united health. coca-cola and mcdonald's at new highs but these are smaller parts of the overall economy a group that's really struggled is travel names. they were clobbered in november. on delta concerns went straight down in november and clobbered

on the omicron headlines you can see most of the big travel names down. >> tesla and ship stocks are under pressure let's get to josh lipton with more. >> start with apple actually so close to hitting that remarkable milestone 3 trillion in market value. low right now but the stock hit a new all-time high today and jpmorgan says apple is a top pick for 2022. you mentioned tesla. that stock down on track for the worst month since march 2020 still up 40% continuing question mark for investors, impact of the omicron variant. vaccine makers are higher today. on the other hand airlines lower today like united and american

lower in the past three months and nvidia on pace for the worst month since may 2019 pull back the chart. up 120%. amd on pace for a worst month since october 2018 still up more than 40% in 2021 back the you all. >> thank you financials a worst performing sector today let's send it to wilfred frost with chairman and ceo mr. gorman. >> we are at morgan stanley headquarters with james gorman thank you so much for having us. great to be with you but particularly in person. >> great to be back. i think the last time i did a live interview you with you right before covid hit. >> we hope it's not a bad omen and will get to e-trade an ento in the office and out of the office a bit later if we can

despite today we are so close to record highs does the outlook justify being at record highs? >> i think that's a surprise if you have global economic growth corporations are growing. their profits are improving and same p multiple every day market should close at a record high but within this market there are extraordinary moves and that's the real risk at this point. >> is a there a difference we question is it running too much is there a point in the last decade becauserates are about to rise? >> it surprises me how the market factors in the reality. rates will rise with absolute certainty and i think we'll talk

about probably sooner than most people with that will come more pressure on the economy and growth, credit and therefore more pressure on equities. that's a given that readjustment not necessarily a bad thing. >> some areas of the market you think is more than facing a small correction which areas? crypto, spac >> if you look at it, just where there have been the obvious excesses, new companies at 30, 40, 50 times rev knew. pac exploes. bitcoin worth 60,000 the rate of change with the reddit stocks you are seeing sort of moments of where you look at it saying does that make sense

the aggregate market is not crazy. >> do you have any personal exposure as they pull back like crypto >> i'm very sket conservative. i never invested in crypto no i'm obviously given the job pretty conservative. >> just morgan stanley stock. >> outperformed some of those. >> it's been a strong performer. congratulations on that. let's talk about the rate outlook. last time you were on and ahead of the curve for the fed to play catch up do they have to play catch up? expectations have come in. >> let's set the table we have economic growth and synchronized growth. every region is having growth why normally one is counter

balancing another. we have record low interest rates in every country in the world and record fiscal stimulus in most countries in the world ordinarily you don't need stimulus if you have got strong growth you don't have low interest rates with strong growth i felt the federal reserve would be better to store away the rate increases when the downturn comes. at the moment zero interest rates we have no ammunition. we are ten rate increases from normal if i were the fed i would move earlier, store away ammunition and accept the reality this is before the inflation discussion i guess the fmoc meeting is i think this wednesday i would be very surprised if there are more dots to talk about rate increases next year.

>> could it derail the economy or confident that there's support oberto economy overall >> i don't think so. this is what you need. if you have too much liquidity and too many deals and too much growth happens under false p pretenses. we need money to believe stable. i don't think the economy will be derailed. the market mayf have a setback but that's okay. >> lots of spots on the fed to be filled. white house saying they'll try to make an announcement before christmas. do you think that banks will get a lot more of the tightening regular lags over the next five years. >> there's a bit of a myth somehow we have gone through a massive deregulation i was there at the beginning

with the first tests put in place and there was an increase in the level of regulation and xhal to hold in this country dramatically from 2008 and '09 through to about 2016, '17 there have been some modest changes from 40 to 100, we probably bag at 92, 90 modest adjustments to the way the volker rule was applied. do i think the banks need more capital? absolutely not they're functioning very well and you might hurt growth and the economy. right now i think are there are going to be more adjustments i'm sure there will be a redo on a global basis, internationally and with the fed, i would be absolutely surprised if that happened. >> the outlook on the economy is

constructive can next year repeat that? >> it's hard to know we budgeted -- we didn't budget what we delivered this year. we have had through i went to talk about this year in a moment but 2018, '19 and '20 each record and we are ahead of 2020 pace and heading for a fourth consecutive record revenues to $60 billion on track for this year. and net income of 12, 13, 14 an extraordinary run here and definitely helped by what's going on in the broader economy and driven by the business model choices so i next year the business model choices sustain us how the broad every economy plays out and how the markets play out will be driven by that

and less clear and i think a great year next year >> you had to justify the price to pay and said you got to pay a full price since then the price of asset management assets gone up further. how do you think about the deals now and would you add more or has the price gone too high now? >> we spent between e-trade and eato 234 advance $21 billion about 13 and 78. something like that. the market cap since we did those deals, since we closed the market cap gone up by about 100 billion. there are a lot of people at the time that tell you that should buy the company and pay a billion dollars less i said i agree

unfortunately the seller wanted the extra billion dollars. you have a choice. pay it and get the company don't pay it and get nothing we will own this e-trade has been around for decades. eaton is around 94 years we'll own it for the next 94 years. you have got to focus on what makes sense. the worry that of that precision can't tell me what we paid for it and you don't get stuffer done we made the call we are pleased with it. >> a couple more calls to materialize next year or two >> we are a growing global business and not compulsionively inquisitive. we're using the capital for that for the shareholders and build

the business and we are not out there we must do a deal attitude. >> do you expect retail investor participation to fall? does that hurt morgan stanley's results overall? >> it doesn't. the retail activity within e-trade is not a major economic driver for this firm it is a major economic driver for is the options type business the deposits we have about 330, 340 billion of transactions. right now it held up i'm astonished that's fine. you make no money on the transactions that's not the economic driver. >> want to talk about operating in china do you do business in china proudly or begrudgingly? >> not begrudgingly.

we are proud of the business we have to supporter global corporations of china and corporations for decades now and hundreds of employees there. we have taken full control of the joint venture and of the asset management venture fundamentally we don't try to front run u.s. policy. we are a u.s. company and follow u.s. company. >> i totally get that. i do wonder if the temperature change jd the white house saying it is not sending officials to the olympics and due to the genocide and crimes against humanity genocide confirmed by the white house. does that not make you rethink if you want to make money there? >> that's strong language. genocide we're guided by u.s. policy. i won't determine which countries we do or do not

business in. last time i checked the biggest trading companies are u.s. and china with each other and seem like there's business done at the government level we'll stand by policy and run the business in china as we always have. >> have you seen everyone that you wanted to come back to the office come back to the office >> it varies so much around the world. if you look in india i think 5% of the employees are back. in new york city the building here today running about 65% 95% vaccinated on any given day 65 of 95 are in the office you can't come in if you are not vaccinated we are in a transition period still. i was wrong on this. i think we'll be in it through

most of next year. everybody's finding the way and then has the omicron variant we'll have others an unrun out of letters and it's continuing to be an issue i pray and hope everybody gets vaccinated and the booster shot. that's the defense. >> you made strong comments in the summer and one implied people would not paid as much not in the office in new york. given as you said another 18 months is that view on hold? >> what i said was if you think you can move and everybody moves to a low cost part of the country and chooses when the teams are working in new york that creates issues but the employees haven't reacted that way. fundamentally they tried to do the right thing. on any given day 65 of 95% in

this building in new york. you go to the trading floors you find hundreds of people doing the job and not been an issue. >> in terms of capital lots of excess capital is the prempbt shifts? >> we doubled the dividend we pay $2.85 a share and buying back stock 100 million shares a year and the cost comes down. but think of the 2.80 post-crisis 5 crepts from 20 cents to $2.80 doubled in the last year of sli we'll look every year but i expect growth. we have excess capital buy back stock when it makes sense. we have been doing for that year

and will continue to do that you look at investing in the business, the people if there's sensible deals to be done you do it you toggle between all four and said i wanted this company to reflect the yield stock type capability that the wealth and assess businesses bring. we pay out 5 billion in dividend now. a show of confidence in the business model. >> i wanted to finish touching on the leadership. you updated us on that earlier in the year and thought three to five more years for yourself has it shifted in your mind what the factor will be on that timeline is it no longer a question of morgan stanley needs me day-to-day and more of a question of when i know the next person is and will be ready?

>> succession is a hardest thing as a ceo and a board and a board decision ultimately. there are a number of things that go into it. evidence of the strategy is working. i love doing the job but thirdly what's the right thing for the organization to carry it forward for next ten and 20 years the people on the operating commit tee is four people on since the beginning of the year. all under the age of 45. that's setting up this company ten for 15 years and executives named that could take over for me i believe in succession and planning i'm proud of the team we have. we have fantastic executives. >> always a pleasure to catch up great to do it in person as

well. >> thank you for coming over. >> i'll send it back to you. >> great interview see you in a bit one spac hits the road shares of harley davidson. we'll explain next you are watching "closing bell" on cnbc.

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are up about 6% today but off the highs as the company makes moves with the electric motorcycle division. morgan >> hi, jon making moves is the way to put this one it's a deal to merge so a spac gives the ev business an enterprise value of $1.8 billion. ceo and chairman jochen zeitz will be ceo of live wire and he told me that livewire will benefit from production and division of harley and kimco investing $100 million and that the tech will help benefit the core brand as well as harley undergoes a turn around plan. >> livewire will spearhead that technology and focus on the

urban consumer and bringing the technology back into harley is key objective so therefore it is positive and why we have huge potential for the brand and company. this will be a key element to help us achieve the goals. >> the company forecast a ramp to $1.8 billion and also potentially profitability in 2026 shares are up right now about 5.5% and the spac impx up 3% on the news >> very interesting. evs always rage. thank you. the dow jones industrial average lower by .6% s&p 500 down that same measure and the nasdaq composite is down about .9%. still ahead the top picks in

chips. semis are pulling back but a number were named a top pk for 2022 the analyst behind the call will tell us the names to watch let's check out the top searched tickers on cnbc. tickers on cnbc. we'll be right back. and we can monitor to see that we're on track. like schwab intelligent income. schwab! introducing schwab intelligent income. a simple, modern way to pay yourself from your portfolio. oh, that's cool... i mean, we don't have that. schwab. a modern approach to wealth management.

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it is now time for a cnbc update with rahel solomon. >> here's what's happening the supreme court has rejected a challenge to new york's vaccine mandate for health care workers, rejected two awe suspension to the mandates the mandates do not allow

exemptions for religious reasons. philadelphia will require proof of vaccination to dine in. the new rule goes into effect january 3rd. hospitalizations are up about 50%. and the next two games for the chicago bulls postponed due to a covid outbreak within the team ten players and staff members entered the protocols for covid this month first two games this season delayed due to covid. no u.s. troops face charges over a district attrone strike . you are now up to date back to you. >> thank you. after the break, vaccine stocks holding up well today pfizer in the green following news of a deal we'll tell you about it next

heading to break here's a check on bonds yields pulling back today. "closing bell" will be right back ♪♪ in boxing or any other business, one day, you're gonna take a hit you didn't see coming. do you stay down? or do you get up? [announcer] and this fight is a long way from over, leonard is coming back. ♪♪ ♪♪

health care having a strong session. bristol myers squibb contributing to those gains. that stock up after the company hiked the quarterly dividend to 54 cents a share

also announcing a $15 billion share buyback, court. >> thank you, jon. shares of pfizer jumping after announcing a $7 billion deal meg tirrell has that story for us. >> pfizer is jumping but not as much as arena pharmaceuticals that pfizer said it would acquire $100 a share arena up 80% this was a premium of double where the share price closed on friday for arena this gives pfizer a drug in phase three for a few diseases and additional medicines in the pipeline for cardiovascular disease and this is analyst and investors watching pfizer put the cash from the vaccine to use and to do more deals and the

space hoping in general for more deals and bigger deals to jump start the space. looking at the etf that tracks the sort of mid-sized names down more than 20% year to date so looking at the ibb with a moderna and large cap drive to it you don't see that as much so they hope for more m&a like this guys >> wow what a year for pfizer in a variety of ways. thank you. after the break, cashing in on chip just the top picks and a number made the cut. we we'll speak with an analyst and why amazon is not on his 2022 tech shopping list and which mega caps he recommends instead. worker's comp was about 20% of my total expenses. i needed a worker's comp policy that wasn't going to strangle my business.

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that will have feet tapping. cowan research out with the top picks for chip picks of 2022 joining us now is analyst behind the note matt ramsey from cowen research tell me why you decided to focus in on autos and semi conductors versus some other slice. >> hi, jon thank you for having me on we look at two big vectors in the automotive industry and they're happening at the same time there's a lot of chip shortages that people reported on in the auto semi space stabut we focus

luxury cars to get the supply and you have a doubling of content from $500 a car for a regular vehicle to $1,000 a car and most of that comes from power semis and also from the battery management system. instead of picking a stock for a top idea we focused in on a basket of five we also highlight st micro, wolff speed and just at the givening of a big trend of cars and model that out to 35% in 2030 and about 50% in the western world. it is a remarkable trend coming and just at the beginning of it. >> tell me why you didn't include what you didn't include. i was speaking to the ceo of qualcomm and talking about the intelligent edge also marvell arguing with

networking play there. why not pick them? >> great question. i'll just say stay tuned to work we're doing. there's vectors in the auto industry and we focus on electrification happening first and quickly. there's push behind it and driving investors. qualcomm and others are really tied to this autonomy theme. the architecture will be turned on its head. we focus on electrification but completely agree with you. >> how much more room does the

names have to run? up 42% in a year how much more room is there to run in these names if these are top picks? >> good question i think for us it's -- we are at the very beginnings of a 10 or 20-year cycle in the automotive space why the valuations are fairly reason. aggregate on high teens on 2023 earnings and looking at the companies that my team covers, these valuations are actually very reasonable relative to the industry. >> matt ramsey, thank you very much we'll see how thank you fare as the year moves on. apple tries for 3 trillion,

why meme stocks are losing ground watch or listen to us live on the go with the cnbc app we'll be right back.

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welcome back we have a great lineup in the second hour of "closing bell." a top energy analyst to weigh in on the drop for the sector reaction to the interview of gorman why amazon didn't make the top picks list for the new year and why grinch bots could be the tech tool to steal christmas but first we have just about 12 minutes left my gosh.

in the trading day it is only monday. today we have eugene profit and chris barone let's kick things off with the broader market posting strong gains last week wilfred frost sat down with james gorman discussing the area of the market to face larger corrections. >> where there have been the obvious excesses, 30, 40, 50 times revenues, the spac explosion, bitcoin whether worth 60,000 or 6,000. what's gone on with the reddit stocks that have exploded you are seeing the moments where you say does that make sense >> i don't know if it makes sense or not but it is really exciting and been really exciting to see all of the sort

of new assets in the last couple years and i think the investor playing in the market and got involved because of reddit and bitcoin and become sophisticated in the understanding and playing into this and impacting the rest of us. >> for sure. chris, wonder what you think about the idea of excess talking to an analyst excited about an analyst looking at ev. >> i think this is a market that's frankly struggling with the transition to something else i was struck to hear him talk about a beginning of a 10, 20-year cycle. they have been out performing. i think we have in some of the later innings of some of the

moves. we s.t.a.r.t.ed 2021 with 90% of the nasdaq in an uptrend as the course of the year has gone own and the index grinded higher we have seen unsettledness under the surface and start in a vulnerable spot i don't think that's fatal but i think if there's a recognition that the market is making this transition to a more mid cycle alignment. >> very interesting. eugene, where do you think we have right now in the cycle? it struck me the performance of equities on friday and then today after a strong read on inflation. probably expected it but i would think it would have taken wind out of the sail more than it did. what does it tell us about where we have in the cycle >> courtney, i thought friday was a pretty good indicator of excesses in the market and

minimizing a lot of the issues that historically would have caused a market correction investors are willing to accept interest rates will be higher, that we have a variant that's growing again so the covid forces aren't out of the way supply chain disruptions are intact a lot of stocks are hitting 52-week lows and still have optimism generally in stocks that have limited earnings so i think that we have somewhat late cycle and i think 2022 will probability turn out to be more defensive than analysts predict and quite illuminating to hear europe talk about the only con contagion growing rapidly and we have so far nixed that off that it wasn't a big deal i think they will have more issues with that going forward

>> all right apple touched all-time highs today inches closing to a $3 trillion market cap. the firm cites more iphone upside to come chris, maybe saying this is overdone is a bit much and didn't take long to get from 2 trillion to close to 3 why is this move justified >> it is a big and quig move and we have we think the market in a vulnerable position and apple trades above the 20-day moving average. i think at the end of the day good trades are hard to fade but faang is not treated as an asset class. facebook is weakened and really apple and microsoft the last two remaining leaders in the group

are they starting to pick them off one by one it is not a correction until everything is hit. given the weights with apple and microsoft and amazon do the big weights need to go down more before we are through the corrective phase it is an important question. >> eugene, what do you make of apple hitting the 3 trillion mark it is a name that is in many portfolios because it is a part of many indexes and funds. is this a name to plow even more into purposefully because of the drerks that it is heading and the market size it continues to garner >> we own it and like it i think that you haven't seen a lot of benefit from the cycle upgrade to the iphone 13 and the like and so it's expensive but like the other names in technology.

i agree with chris that you will have a correction across the board and you may get some valuation reduction of nanlgs like apple but i don't think it's tomorrow. i would rather be invested here than a price not sustainable apple and microsoft, facebook are still probably -- meta i should say are better names to be in and hide in as the market corrects. >> meme stocks hitting especially hard in today's sell-off kate rooney has more for us there. >> meme stocks are synonymous with speculation they see year end selling. gamestop of course the most famous of reddit stocks tumbling

today. today's losses bring the motto date losses at 29% at this point. the stock at the center of that social media led short squeeze in january amc shares pushing the monthly declines to 32% and down more than 15% right now hitting the lowest level since june and it started on saturday after they sold significant portions of their stock. bed bath & beyond dropping 6% today. guys >> thank you i'm no chartist but i was looking at gamestop and it seems like it kept bouncing off of around 140 after, say, april but today unless something changes in the next couple of minutes it closes below that is that significant? >> it absolutely is. we talked about this in a client

note last week as a favorite short for '22. it is finally peaking. at 140 level gave way. i think over 140 there's a lot of empty space and the difference between gamestop now and then is it comes in dramatically i think it speaks to the broader meme complex the stocks weakened but in step with the ark stocks and the ipos and the spacs and bitcoin. the groups to traditionally look to as some signal on liquidity had been rolling over. >> eugene, as we look here in the market action today and getting ready to close we talked

about inflation potentially being a driver but perhaps not after the action on friday is this rotation out of stocks that have been working, profit taking moving into year end? >> yeah. i think that there is some rotation going on. also, don't forget, if you were an unlucky investor getting in late and wanted to be part of it you probably are advised to sell those that you have losses in and maybe look at them again in january. so i think that because the market is not as optimistic as it had been goingback to december, you have a lot of investors derisking the portfolio. not all the way to consumer

staples but thinking if they want to own a company selling at 50, 60, 90 times i think that's where the rotation is actually happening >> okay. eugene, chris, thank you we are about a minute away from the close. court, i'm wondering if what chris said about the danger of short interest coming off could it have implications i don't know seeing the s&p near session lows the dow getting pretty close to session lows, as well. though it was failing -- faring rougher between 11:00 and noon and the nasdaq we were just with that on the screen a moment ago. been under more pressure now down about 1.4%.

fading considerably into the close. there you have it. talking about the stocks that volleyball under pressure. tech stocks holding up noticeably well but it's been rough particularly for growth names and nvidia, names like snap, airbnb we'll see where that goes and now look who's back. ♪ thank you so much. welcome to "closing bell." i'm wilfred frost with courtney reagan a top analyst with the best bets for next year. eugene profit and chris barone are still with us. as we closed at session lows for the s&p 500. for the nasdaq just off lows for the dow.

down 1.4% for the nasdaq composite. chris, i'll come to you in this late day sell-off. pull up the intraday charts, s&p is most pronounced for this, big sell off into the close there. >> i think it speaks the character of the market changing aside from a level or the last hour of the day looks look at the leadership we've seen the high list start to grow and then conversely the new low list start to grow with financials and materials there's a shift under the feet and see with the leadership changing and the big question out to '22 is are we going to be able to escape the first six months of the year without the bigger weights which really to this point have been defensive the faang stocks

they have already sold all the second dafr issues are the sell evers coming for te big waves? >> i think we made it this far and not zoned in on the fed and the impact of the fed in portfolios we are expecting tightening policy the taper to begin rate hikes to come what's that mean for investors positioning here going into 2022 >> for the most part investors are aware the fed is winding down the asset purchasing program and higher interest rates are probably coming in 2022 and if you haven't discounted the portfolios for that you have probably been behind the eight ball. however i think that certainly as interest rates increase and the liquidity explodes out of the market a little bit that

shines a spotlight on higher valuation securities and plays into why they're selling off aggressively than they had been. we'll be looking hard on tomorrow and wednesday to listen to what the fed has to say but we expect them to really increase buying program and indicate that interest rates begin to increase. >> expectations and transparency key following the fed. energy was the worst sector of the day. the group down almost 3% but names like marathon oil, hall bier on the down 5% or more. joining us is the raymond james energy analyst what happened here today is this rotation how should investors sort of be squared up looking at energy here going into year end >> energy was the worst perform

on the day and the best performer of the market on a year to date basis up close to 70%. now admittedly that's after a dreadful decade. day-to-day oil trades on covid headlines. as simple as that. in the grand scheme of things covid is no longer a game changer for global oil demand the way it was 12 months ago but seeing the first omicron case in china which is the world's largest importing country that will putt a dent on sentiment. >> you don't think that covid has a big play in the energy market despite the comments coming out of european and the uk expressing concern about the contagion. even if those that are vaccinated have a milder

response how could that not curtail what's going on in the energy patch? >> it has an impact on sent. in the commodity market. my point is that on the substance global oil demand is no longer impacted in a physical sense by covid related economic restrictions, lockdown really these things are almost entirely in the rear-view mirror for example 50 countries putt restrictions on travel from southern africa region that sounds pretty bad but all of africa combined is 3% of jet fuel consumption around the world. so when we see days like today it is really a psychology trade

rather than a fundamental supply demand trade. >> what's your take on what's going on in europe as it relates to russia? natural gas prices an e get the debate we hear that you have a power generation fuel and a transport fuel but might we see shifts there if issues with russia continue to escalate >> there will absolutely be a long term shift in europe away from russian natural gas and not only russian but a shift happening in europe and indeed globally but europe leading the way from all fossil fuels. russia or otherwise. this is the energy transition and in europe it is enforced by the european climtd law, the most ambitious example of climate policy on the planet this is a very big deal and it is dreadful news for moscow.

because it is going to wipe out demand for those pipelines going from russia into germany because ultimately the entire electricity mix in europe will be renewable the new coalition government in germany is aiming for 80% renewable electricity not by 2050 2030 that's only nine years away. >> thank you so much for joining us eugene and chris, zone in on the best trade ideas you eugene, yours first. >> i suggest disney. sold offer about 25% since september. basically because the disney plus subscriber growth is slow

but higher we think as we come out of the pandemic the parks will be coming back. this is a recovering economy around the board with the company of murltiple streams of revenue. >> chris >> i think there's some former laggards in mega cap health care that are behaving bet every. pfizer peaked above. it trades about 12 times forward which reminds us a lot of the characteristics of microsoft in 2012, 2013 we like names from big bases with momentum and relative strength pfizer, regeneron are examples in that space that have those

characteristics. >> just wanted to ask what you're seeing in the moment with the koefr lagss between yields and stocks or whether there's been so many false starts that this is broken down at this stage. >> i think when you look at how the curve responded, the curve has gotten ahead of what it perceives to be a different fed in '22 what's this mean for the dollar next year? looking at history the dollar has a reputation of rallying into a fed hike and then really falling apart as the fed starts to move. we looked at the last eight tightening cycles and seen dollar decline as the fed changes course i think you can get a weaker dlar next year. >> thank you. we are just getting started

here on the second hour of "closing bell. we'll get reaction on the financial sector and later ark's director of research on did b s esest valu hitop picks coming up. ♪ ♪ cases of anxiety in young adults are rising as experts warn of the effects on well-being caused by the pandemic. ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ your shipping manager left to “find themself.” leaving you lost.

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shares of morgan stanley closing lower today. i sat down with the ceo and chairman among the topics are the fed and expectations when they'll raise rates. >> let's sort of set the table right now we have economic growth and we have synchronized growth every region of the world has a

growth if global synchronized economic growth is record low interest rates in the world and we have record fiscal stimulus in most countries in the world ordinarily you don't need stimulus if you have got strong growth you don't have low interest rates with strong growth we are heading to a rising interest rate environment. i felt they would be bet every off to store away the rate increases when the downturn comes. at the moment at zero interest rates we have no ammunition. ten quarter point rate increases from normal so if i were the fed i would start to move earlier, store away some ammunition and accept the reality this is before you get to the inflation discussion i would be very surprised if there are more dots of rate

increases next year. >> if you're right on that front could it derail the economy or confident that there's support for the economy overall? >> i don't think so. i think this is what you need. you need balance in the economy. if there's too much liquidity, too many deals and trance actions and growth under false pretenses. we need stable economic growth i don't think the economy is going to derail. the fed's job is no worry about the economy. >> lots of spots on the fed to be fill jd the white house saying they'll try to make announcement before christmas why do you worry that regulatory pendulum will come back and banks get the tightening regulation over five years. >> there's a myth that we have gone through a massive

deregulation there was the first announced and the first card tests put in place and the increase in level of capital to hold in this country dramatically from 2008 and '90s through to about 2016, '17. from a scale of, i don't know, who 40 to 100 we are book at 90. the way the volker rule was applied. do i think the banks need more capital? absolutely not they fiction well. you might hurt growth in the economy. i think are there more adjustments. i'm sure there will be a fundamental redo of what's been done over a decade internationally and with the fed? i would be absolutely surprised if that happens. >> also i thought some really

interesting stuff on the o acquisitions and on operating back to china and back to work that perhaps he was a little too strong initially on that let's discuss. jared, we heard there the take on the banks' capital position and then also later a clear commitment to the dividend to increasing it and capital returns and probably music to investors' ears. >> it is they're very well capitalized. not only morgan stanley of course but the entire banking industry and he alluded to as following the financial crisis with the legislation and the industry grown dramatically but specifically he is committed to give back the excess capital and used it for organic growth

also for acquisitions and then going to end by giving back in share repurchases. >> i'm interested on the take on what he said about bank regulation from 40 to 100 and only come back to 92 unsurprising to say -- to hear how many say an 8% decrease. what would you say it's been decreased by and then doesn't matter what you or i or james thinks but the new fed appointees think. >> you are so right, wilfred it is what they think and they take some pressure from congress, particularly from the senate banking committee i'm in his camp that the banking regulation just think about the amount of capital that the industry has now relative to the pre-financial crisis period when you look at the tangible common equity ratios or the common

equity tier 1 almost in double what they were pre-financial crisis stress tested and turned out to be a good policy we think to derisk the bank balance sheet. you might remember that they said that the global -- banks as small as 50 billion in assets and changed that this is important bank numbers asset sizes have gone up and a change but i think that's a proper relief for the banks. it is not significantly less >> what do you think about gorman's comments about the fed, the speed at which they should be moving or doesn't matter if

it is trance parent to market participants >> i think he is right i'm with him i think the fed is actually been slow to move they have obviously changed. hearing more about that this week we know about that we haven't seen levels of inflation like this in decades and this is different and may have to move faster than we anticipate. when you look at the economic growth here in the u.s. and globally it is amaze jg the liquidity, the banking industry liquidity is unprecedented right now. the amount of money in the fed in reserves is very, very high and well above normal and the fed is behind in tightening. they are going to need to tighten, especially if it proves out that the inflation is well above 2% by the end of 2022.

they will have to tighten and try to rein things in. >> on the acquisitions, he made a strong case there in the sbefr view that the prices paid which at the time some said were a bit rich look now to be fairly attractive is it okay to make that conclusion that or is it only months after that too soon do we not know if they're successful yet >> the initial part of the integration of the two acquisitions have been very successful, particularly on the e-trade. the activity in the market in 2021 with the self directed traders was very strong and e-trade benefited from that but also brings to the table their banking technology and the

depo deposits that's what happens when you buy companies well respected and well managed they were fire sale prices and only get that in really bad markets which of course we haven't had in over a year, year and a half looks like both the acquisitions are working well and looking at trying to annuitize the revenue and looking at the transaction with asset management that will contribute to the annuitize of the valuation. it trades above the peers on a price to book basis and so i think some of that is already starting to show up. >> jared, thank you so much for joining us. >> thank you, wilfred, courtney. motor trend naming rivian's

pickup of the year we'll discuss if that phrase will help increase orders and a tech company is missing from the top picks of 2022. find out which stock that is when we have jneoid by the analyst behind the call here on "closing bell. and alex, i don't want to stop. well, i don't see why you should have to. let's set you up with a side gig savings goal on the u.s. bank mobile app. this way, you can turn it into your main hustle before you know it. you're my hero, alex! what are you working on now? pool cover. that's fun. oh! i made my wife a bathing suit. oh, did linda like it? she did not. oh. you should see what i made for max. max! look at him. he loves it. the confidence to make your dream a reality. u.s. bank. we'll get there together.

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welcome back let's have a look how we finished on wall street. lower, down 0.9% for the s&p and the dow. essentially closing at their session lows the russell down 1.4%. four sectors positive. real estate, you tillties, consumer staples. >> tesla finishing deep in the red and shares of rivian rallied after winning a prestigious award. hey, phil. >> the truck of the year and if you drove it and i have you are not surprised. beating out the ford maverick and the gmc hummer delivers are not large in numbers. reservations right before the

ipo stood at just under 50,000 vehicles we'll get updated numbers of reservations and deliveries when they report on tuesday afternoon. we should hear from the ceo perhaps an update coming to deliveries and reservations and want to show you rivian versus lucid. remember back in mid-november when lucid awarded car of the year after a pop it s.t.a.r.t.ed to pull back. while this is a nice bounce today this is not a designations that i think is going to have a lot of momentum in terms of share price. look at the others of tesla, ford, gm, frisker. they're in the red

substantially. when you look at the electric pickup truck market it is going to heat up in the next year and when they drive it it will change the perception. >> this particular magazine award, phil, tend to lead to sales or a nice thing to have? >> no. it can impact sales. definitely will turn heads people will say i heard about this they say it's the truck of the year i need to give it serious impact. >> two minutes on "closing bell" with phil lebeau and that's something, as well. >> there you go. did next guest has the top internet picks next year there's a name missing for the first time ever. also ark's flagship innovation

fund is crushed since february the director of sechilrear wl join us. earn about covid-19,

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time for a cnbc news update with tyler mathson. >> thank you from the news on cnbc, the death toll rising to 74 people in kentucky with more than 100 still unaccounted for. after tornadoes ripped through the state on friday evening. that from the governor moments ago. the white house meantime issuing a major disaster declaration for the state to allow homeland security and dema to coordinate on the ground there. more than 50 million covid cases confirmed in the united states 50 million this as the covid death toll in america nears 800,000. 30 states and the district over columbia seeing a significant up

tick in new infections. derek chauvin appears ready to plead guilty to violating george floyd's civil rights and change the not guilty plea in the case and he and three former officers set to go on trial in late january on federal civil rights charges. we are live on the ground in several kentucky communities devastated by the weekend news on "the news" on cnbc. courtney, we'll see you there. >> wow the storms are something the pictures are hard to look at thank you. truist naming the top 2022 picks for the internet and a surprising omission from its list is amazon even though cowen and named amazon a top pick it didn't make

the list for truist. here's the analyst behind the call why not amazon this year isn't there more room to run next year in your opinion? >> hey, thank you for having me. again, a few thin things on amazon identified 12 over 46 companies as top picks amazon didn't make the top pick for mega cap and a couple reasons. one, we're tracking literally week to week the performance of amazon relative to expectations and what we're seeing is at least quarter to date definitely seeing amazon lose share in this holiday season and we think one of the cull pritds for what's going on is something that's super popular in the uk that click and collect in europe for

the last 10, 15 years and the reason e-commerce in the uk is 30% penetrated in the u.s. it is still half of that maybe 15%. what we are seeing are the -- not all but a number of large brick and mortar companies like walmart, target, they have gotten much better at doing e-commerce in general and improofing the omnichannel capabilities, allowing people to order online adobe saying 25% of all online orders collected in store. they say that in the last four days before christmas as much as 40% of online orders collected in stores and that's not something that amazon can

participate in right now so we are cautious on amazon we have a buy but relative to other mega caps we prefer and will talk about google or alphabet and meta. >> before we move on to the names you prefer you talked about the click and collect as a reason you think others might be benefitting for taking share from amazon but it is large and aws is the profit engine did that not play into the consideration? is retail what you were most focused on because you believe that will drive the stock price in 2022 rather than aws? >> that's a fair comment we didn't change the estimates for aws and believe that it is the crown jewel for amazon our call really -- but, but everybody else knows that why look at expectations of aws.

mid 30s with a 30% contribution margin that's already known, already reflected to a certain degree in street estimates and expectations the difference is the nuance is marketplace with historically grown at a rate that's faster than the market allowing amazon to keep growing share. we see that stalling over certainly the quarter and never several quarters with the things we talked about earlier. >> you still have a buy and a $4,000 price target. what are the two names in mega cap that you like the most for next year? >> yeah. alphabet we think the stock has shown exceptional accelerating growth. we think with everything that

they do around machine learning it is smarter. the click throughs are going up. the prices are going up and looking at the pry mash driver of google or google growth it wasn't really volume by price and tells you that their ability to target is better. we think that's sustainable for the future the other is around facebook and facebook should continue to grow in excess of growth overall online ad growth in 2022 even with the issues that have been head wind to them last quarter and the first half of next year. >> and then just a last one to get you to talk through. doordash trading close to 260. why is that a buy now? >> because a couple reasons. one you mentioned it the stock valuation came down

pretty dramatically while fundamentals of the business continue to improve. if you like growth this is by far the faster grower in the category will grow close to 30% our tracking of the weekly orders show they track nicely out of expectations forward to date and we think that while the reopening will definitely be somewhat of a headwind to delivery we think that the business is much stronger today than a year ago and made the big acquisition in europe to give them that much more head room. we like that, as well. >> thank you very much for joining us. >> thank you. up next, whether bitcoin can

bounce back in the new year following the sell-off forget the grinch. grinch bots are threatening to steal the presents this year wel pln "osg ll'lexaionclinbe."

♪ ♪ ♪ digital transformation has failed to take off. because it hasn't removed the endless mundane work we all hate. ♪ ♪ ♪ automation can solve that by taking on repetitive tasks for us. unleash your potential. uipath. reboot work. ♪ music ♪ ♪ dream, dream when you're feeling blue ♪ ♪ dream, dream that's the thing to do ♪

♪ music ♪ when you see value in all directions, you add value in all directions. accenture. let there be change. ark ceo cathie wood speaking today and discussing the sliding performance of the funds this

year ark innovation etf falling 40% since the february peak. >> depreciation in the stocks from mid-february to today has not done anything to the forecast we are now just getting the companies and the stocks at lower prices. >> brett winton joins us thanks so much for joining us. just big picture to address the gist of what she was saying in that sound bite and i totally get that point but i guess the problem with it is back in february when things were 40% higher there wasn't a different gist coming from her to say, yes, things are richly valued and as if you say we are picking the innovators and price never matters at all. >> that is absolutely not the

case you have to look at the tape probably your own tape in february she was saying keep some powder dry and now innovation is on sale. you can when you are in the equity market this is an asset class where you have to focus on the medium term time horizon putting money in equities should not be money to extrakct out in three or six months. that's why we stay focused on process, valuing the innovations that we have investing in and today super meaningful appreciation opportunities that we have purchasing on behalf of the clients so i think that you can -- if you believe that kind of like this innovation stuff is a fiction, ai training costs

will not impact the world then absolutely you can believe that the assets are mispriced but we believe this is a unique time in history and that focusing directly on innovation and exposing yourself to innovation is important to realize the appreciation events that are to come in the innovation space. >> totally get that and particularly the point about the skal of disruption that could come and having a long term time horizon. does that allow you to ignore the changing kind of market multiple that gets applied to your type of stock, particularly if the fed starts to raise rates and if we continue to see more dislocation in your types of stocks can you ignore that affecting things on a six or 12 or

24-month time horizon at most? >> we go the underwriting on a five-year base i we pretend we are forced sellers. and so we actually massively compress the multiple in the underwriting and we assume that the assets to invest in will collapse to whatever that market multiple is and on that basis we have expectations for a multiples of appreciation in the companies that we invest in. we could be wrong about the fundamentals we could be wrong about the fact that the technologies are economically meaningful in a profound way but if we happen to be right we think that the portfolio would appreciate five times over five years including

the expectations of a massive multiple compression and from that perspective it produces a lot of noise and a lot of information that people sometimes act on in error. within the context of equity markets you should not make decisions on expectation but based upon the duration that's consistent with that part of your portfolio which should be five years and beyond point of view. >> timing, of course, is everything with all of this. you could make right or wrong decisions based on where we have in time. if we can zero in on beyond the broader strategy and talk about a recent purchase that you made.

uipath and are you discouraged >> absolutely not. we think that art foirm intelligence or ai in general turns knowledge workers into a super worker if you look across the board in artificial intelligence and automation the capabilities that we have even today people didn't think would be possible and innovations in natural language processing and take a really processes that usually humans would be required to kind of move a path along and automating them allows you to deliver more out put with less inputt cost and labor and so on a high level we think that ai software is a

$14 trillion market by 2030 and the -- this will lead to tens of trillions of dollars in enterprise value creation and the ai software market and this is well positioned in that space. >> what's the biggest threat to tesla? is it new pure ev players or the traditional autos? if you had to pick one of the other new players to go alongside tesla which one would it be? >> well, so it is funny. we focus on battery storage. we do great work sam has literally like produced the best in the world battery kors decline model and as a function on that we focus on the startups that have come to

market and the capital decisions that the traditional companies are making and the startups in our view are actually markedly overvalued so it's really, really hard to execute electric vehicle production and scale it and the capital markets are interesting. tesla managed to cross the chasm and therefore anybody else can do it. the secret to tesla is actually the innovation cases and not happened to be focused on electric vehicles so for us like the execution half for tesla on the robo taxi side and likely on ai as a service company down the road and these -- but the ev startups and traditional oems with massive restructuring in manufacturing facilities have a

lot of execution risk ahead of them and a lot of it is not being appropriately discounted by the market in our view. >> there shall still a lot of question marks for tesla and competitors. thank you for joining us. >> thank you. next, holiday bots facingive competition to score the hottest toys we'll explain why ahead. but first higher food prices on the rise kristina partsinevelos is looking at a key driving factor. christina in. >> and that is fertilizer prices, so high that 6,000 farmers ask the doj to investigate. i'll explain why it could translate into much higher food prices in 2022 that is next

hey, angie! you forgot your phone! hey lou! angie forget her phone again? yep. lou! mom said she could save up to $400 on her wireless bill by switching to xfinity internet and mobile. with nationwide 5g at no extra cost. and lou! on the most reliable network, lou! smart kid, bill. oh oh so true. and now, the moon christmas special. gotta go! take the savings challenge at xfinitymobile.com/mysavings or visit an xfinity store to learn how our switch squad makes switching fast and easy this holiday season.

fears of higher food prices are front and center among inflation and it looks like fertilizer prices could be partly to blame. christina part sin eve loss is here with that story. >> well fertilizer provides nutrients to crops and this bad boy behind me sprays it out on to the crop. but over last while we've seen prices skyrocket and that leaves farmers with little choice but

to pass it on to consumers >> i've seen gas prices rise and you're consumer is seeing more at the pump and we feel that effect here at the farm. last year we were purchasing fertilizer for $220 a ton and the last quote i got was for over $850 a ton. >> nitrogen fertilizer has natural gas and coal and prices have been soaring because of supply chain issues restrictions or export restrictions coming out of russia and china and the energy shortage and this is a time when food price as cording to the food index has hit a level we haven't seen in ten years. and so every single item on your food plate has been touched by fertilizing prices and when we start to see nat gas and coal increase that mean will almost undoubtedly follow suit. >> a very interesting story. i'll pick it up there about fertilizing prices and food.

thank you so much. well up next, the grinch who stole your playstation holiday shoppers are having a hard time getting their hands on some of the season's hottest items and the reasoning behind that might surprise you. the details when "closing bell" comes right back ncial 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! ♪♪

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if you've tried to buy a playstation 5 online, a bought probably outbought you in milliseconds these are particularly active right now. cloud fare works with retailers to try to block the bots. it detected more than 1.5 trillion grinch bots on black friday this year and they are resold on e-bay and amazon and facebook and toys are resold at prices between 34% and 192% more than retail according to an analysis by alex partners. well the fairness is debatable, anyone can buy a shopping bot for between $10 and $400 bucks county used bots to buy goods and resell and other bots

are used to nab the hardest to get sneakers. >> you end up having to pay a ton of extra money going on a secondary exchange to pay resale and that could be a couple of hundred dollars more so by paying for an add to cart service for any other extension service that will buy sneakers for you, that could be something like $50 extra >> not many retailers work to prevent bot buying and limit cart time or require memberships to get some products but it is fascinating that this happens. >> so fascinating. >> it is like trading, it could be done in milliseconds and they search and buy. >> i was going to say, that we always whether the algorithms in the markets are suggesting that stocks are overpriced, i wonder if consumer goods are overprices or it means the consumer is so well -- got so much money to spend there is more upsidein the economy to come. >> when they resell the prices

are higher, but christopher chan who loves sneakers he said their hard to get. >> great story thanks for sitting in today. and as well tomorrow which we look forward to. on the other note, tomorrow we have an interview with the bank of america chairman and ceo briyan moynihan we're out of time. thanks for watching, "fast money" is now. live from the nasdaq site overlooking times square, this is "fast money." i'm melissa lee. tonight guy, karen, dan and tim will join us tonight on "fast," 12 days until santa arrives. will we see a miracle before the big day. plus break out your passport, the chart master sees a world of opportunity in this beat ep down trade. the one place carter worth said it is time to bet on an