dow off 101 points now and the nasdaq off about 171 points. we did have that good news from pfizer, but a lot of folks i think anxious about what we may hear from the fed. in the meantime, make sure you join us tomorrow "squawk on the street" begins right now. ♪ good tuesday morning welcome to "squawk on the street." i'm david faber along with jim cramer we're going to have a lower open, it would seem, unless something changes between now and 9:30 it starts with inflation risks both for consumers and investors. wholesale prices rising at the fastest pace on record and that moved the futures a bit lower. plus, tesla tumbling shares are down now more than

20% from the all-time high this as elon musk continues to sell stock as covid's omicron variant spreads, pfizer says its vaccine remains effective and its antiviral pill, that successfully prevents hospitalizations and deaths in high-risk patients jim, yesterday i did sense a new, somewhat, more cautious tone from you, certainly when we began the show and you were talking about your pile of analysts reports -- >> they were all -- >> what about today? >> look, it's worse. you have the producer price index number, i don't know why anyone would say it was five i don't know who makes these estimates. but they're -- you know, moe, larry, curly and joe and what i hear when i see this -- anyway, here is the deal

we have a fed that is in trouble, so to speak they have to do something. we keep talking about taper. that reminds me of the estimates being wrong. taper is a setup it's tightening. it's not taper taper is something -- if you want positions down -- i'm sorry, i'm talking to you like a real person, is that all right >> i like the leg cross. that's a new one on the set of "squawk on the street." >> look, i'd stay until the 11:00 if you need to me. stay the 12:00 here's what's going on >> tell me. >> it's kind of the jig is up. people realize that you -- that this taper, if you're a bear you want to spread the word that he's going to taper. when he says, no, i got to tighten, then you panic people that's what's happening right now. they're getting out ahead. they're panicking out ahead. most of the research yesterday was so positive, it did turn me off. i'm a big believer that you can still own companies that make

things and do stuff. that's my mantra make things and do stuff and the stuff that is database-related, stuff that isn't customer relations, management, this stuff that is cathie wood -- that stuff is just going lower and you can't be in it because we're tired of it. we're tired of 14 times sales, david. you always predict there will come a day when we won't go back to valuing things on earnings. that day came yesterday. >> but we've seen days come and go, but then we get back to the market's love for growth -- >> we have to have -- >> results and being willing to pay a high multiply for revenues -- >> not right now but, yes, people fear a 2018 moment where they fear the word "lockstep. what they really fear is that the economy is so hot, that they have no idea what to do other

than to sell these stocks because the economy is so hot. they're afraid because the terminal value -- i had moffitt on last night and we talked about the -- he has a lot of those stocks that he follows that are conceptual. they are getting crushed you don't want high-multiple retail which they -- and meme. >> you mean retailers, i guess you're talking about there's a lot of names held by -- >> retail right now is trying to figure out what the hell williams sonoma just put in a great quarter. >> greatest calls over the last five years -- >> thank you, look, there comes a time -- >> lucid, amc. they're going to be down -- >> there will be a time to buy them you have to see -- after jay slashes. let's say he says taper and people say he's a coward

let's say he says tighten, they're going to sell. >> it goes back to the -- >> we have to have the -- >> got nowhere to go where am i going i'm selling to go to cash? >> you're going to companies that make things and do stuff. >> it's rotation >> yes there's a piece today -- i'm going to pick on someone, because i'm in that kind of mood there's a guy today -- i'm not going to mention which firm. it's block which used to be square now it's block head. this is a guy who wrote july 25th, i feel badly that i'm doing this, but i'll atone for it later on. he said that buying square was like buying j.p. morgan in 1871, okay july 25th. now suddenly he's worried about buy now pay later. everybody pays later that turns out not to be the case as a matter of fact, there are

people who are missing their pay, they're making their buy, and the frequency of which they're missing is up gigantically block had paid 29 billion for that but not yet. for these high multiple stocks, all i'm saying is not yet. here's one i was doing work on best buy, which is a $24 billion company versus gamestop. now you finally have an analog, right? gamestop is up 626%. gamestop is worth 10 million is best buy worth 2 1/2 times gamestop or five times gamestop. >> or is gamestop only worth 1/20th of best buy

>> what they haven't attacked me for is when i gamble to the 11th grade and they caught everybody but me >> yeah. >> we were all playing -- >> there's no statute of limitations on that. >> actually, there is. that's why i mention it. i think, david, that we're at this moment where you have to take some pain you can say i'm going to own block through this, and that's fine but you have to take pain. >> the forecast calls for pain speaking of the forecast, i do want to get to james gorman, somebody we've -- >> i like him. i like him he's changed >> mr. frost, that is wilfred frost visited -- >> i thought you said mr. froth. >> no. this is what gorman had to say about the fed rates. >> at the moment at zero interest rates, we have no ammunition ten rate increases from normal

if i were the fed, i would start moving earlier rather than later, store away some ammunition and accept the reality. this is before we even get to the inflation discussion we'll see, i guess, the -- if i'm -- the meeting is this wednesday? we'll see where they come at i would be very surprised if there aren't more dots talking about rate increases next year. >> there you go. i'm with james james is good. >> you are. >> good manager. stock goes to 95, buy more. >> 95? where is it at right now >> 97. >> it's had a great year, morgan stanley. he made the point that their strategy, they bought e trade -- >> i love what they bought >> think of a all the market cap that they aed dded to those dea. >> i just like different stocks. there are so many companies that came -- 91 companies became

public, of which 100 have already been obliterated and the public has been taking advantage by the spac people and the bankers and the public says, you know what, it's like dog food we're not going -- you can put new and improved so the side if the dog doesn't like it, he's not going to eat it. >> you think it's going to be rotational, not necessarily people saying the fed is coming, we're going to take a breather here what do you want to own? >> well, i want to own the drug stocks >> which moved up yesterday quite -- >> i have a company on tonight, you know them, bausch and lamb they're dividing into three companies. they have some bonds i happy to like their business very well. but i like the deterrm businesss

well i'm not making a stand on gamestop i'm making a stand on bausch and lamb he's going to keep going -- going to keep it going he sold so much stock -- that stock is -- >> what did i say for a year >> david, you were right i said that as long as adam aaron stays in -- i didn't think think -- he kind of sold down that position. >> we're already at a break? >> will you turn the music off give me a break. >> it's only ten after. >> what are you turning the music on for i had things to say. >> i don't know. >> i'm going to leave. wildcat strike like starbucks like kellogg >> you're going to be the buffalo, the one --

>> maybe people -- >> how was the barista, by the way. >> she also said there's better fish to fry, but she went to -- >> this is the barista who was a guest on "mad money" last night. >> having been a member of two unions, i respect the idea that you can make more money if you're collectively bargaining and saying i want a raise. >> put your leg up again i like the flexibility. >> we won on the music thing. >> we did win -- >> look at that -- >> we're going to talk about new developments around pfizer's antiviral covid-19 pill and where the omicron variant fits into the picture we're going to talk about -- >> j.p. morgan down. >> jim took pictures of elon musk last night. >> i was there >> and we'll talk about tesla and where it's been.

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tesla shares are moving lower. you can see in the premarket elon musk sold another -- more

shares if he doesn't exercise them, he will expire. obviously, he's going to do that he's off loaded nearly $13 billion of tesla shares since early november he used that poll on twitter, where he asked whether he said shell 10% of his stake the poll was nonsense. he had to sell in order to generate -- >> are you telling me that my vote -- >> in order to generate money to pay this enormous potential tax bill that he has. >> one man, one vote >> it was nothing. >> i shouldn't have voted 22 times. >> this is a widely held stock, loved by many. does it hold up in your current world that you're talking about where -- >> they're making things i think the answer is, it holds up better than other things. but you have people like adam jonas doing a piece today where he talks about all sorts of ev he thinks the ev space has

gotten crowded there are too many of everything that's one of the problems there's too many of everything too many charging companies, there's too many payment companies -- >> too many battery companies? it seems to me we're going to need an awful lot of batteries toyota is getting more aggressive in the ev -- >> there's not going to be 100 winners in the battery business. i'm just saying there's so many companies that do -- okay, optimizing the web for your business david, there are -- i know ten companies that optimize -- do you think all ten -- doesn't it feel 2000ish >> there's been a lot of capital to fund business models that won't end with a great deal of cash flow. it may be consolidation at some point down the road. >> that will be a gift if there's consolidation.

remember when linkedin collapsed and there were two buyers for it, salesforce and microsoft there's a piece today about microsoft micrand it's basicalla thumb sucker saying microsoft isn't so bad david, the gains for this year have been so outsized that there are a lot of people who are thinking, i got to get out before the other guy but then you'll get the christmas rally. the eighth day before the end of the year has historically been -- if you buy things that day, you've almost always made money. let's just wait. >> you've also got potential tax law, selling of the losers at&t shares -- >> i'm not mentioning at&t. >> okay. i just did >> craig moffitt did that very good sell. i asked him about the phone stocks and he said, i don't know who's been more negative, you or me >> that's saying nothing because my level of

negatinegativity has been at a higher level >> they never called me and said -- actually, someone did call me. >> far lower multiple than originally was planned really announce a deal and you lose 30% of your market value from when you did it is it really going to be that these two companies separated are going to -- come on. that doesn't make sense. are we that much weaker than they were prior to announcing their deal. >> citi said it could double. >> yeah. >> no one is saying at&t could double they told you that the dividend was safe you know what i mean. >> yeah. >> do you remember in the movie "witness" when kelly said to harrison ford, you told me we would be safe in philadelphia. and all he says is, i was wrong. you told me you would be safe with the at&t dividend i was wrong. >> i know. but it's more than adjusted for

that -- >> do you have harrison ford -- >> whether it's a split or spin is still a key question. let's get back to tesla for a moment -- >> i'm not presenting myself as you have to sell i'm saying you have to take pain that's all you have to take pain. you don't have to take pain if you buy coca-cola here >> meanwhile, it's up 3% for the year. >> that's okay now because you said -- remember, everyone says there's no other game in town. there is another game in town besides data dog, right? frog clear data dog caterpillar -- >> data dog, do they do the same thing as app lovin >> no. >> let's get back to -- >> they're interchangeable parts right now. they all -- there's -- >> can i show people your pictures of elon musk? look at that courtesy jim cramer.

did he have anything to say. >> i thought he was unbelievable good it cost five times more to be aggravating on -- it costs -- this is what he said >> tell me >> he made a comment about how facebook costs more if you are empathetic to place an ad than it does -- musk on facebook. a hateful ad on facebook is five times cheaper than an empathetic ad if you had a stock takeaway, he said it will be so obvious in a few years that autonomous drivers are safer than people, that they will have no choice -- i remember when i was visiting waymo, they were saying, look, if we had robots when we first came up with cars, we would

never ever haven't said humans should drive a million people die how many could be prevented. i thought he was fabulous. my wife said to me, whoever -- why do people think this guy is nasty. he's a sweetheart. he brings his kid on his kid has that little different name it's pi squared. he's much smarter than i am, but at least he's not arrogant that's what everyone said. >> elon musk wasn't arrogant >> he wasn't arrogant at all >> take a look at futures here we are going to have a lower open when we get started with trading. 8 1/2 minutes from now re" mi rwkn e ua oth stetcongight back. [uplifting music playing]

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the opening bell is a few minutes away remember, by the way, you can catch us any time, anywhere, listen to and follow the "squawk on the street" opening bell podcast as you take a look at some of the laggards as we get ready to open just a few minutes from now. >> ralph lauren, yesterday, a favored name here today, gone tomorrow. >> there we are. >> wow (soft music) hey dad, i'm about to leave. don't forget your hat . good morning. how can i help? i need help connecting with my students. behind every last minute save, ok, that works. and holiday surprise,

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>> announcer: the opening bell is brought to you by nuveen. a leader in income, alternatives and responsible investing. let's get going with the mad dash here and we'll get to an opening bell less than three minutes from now. >> there's a piece by j.p. morgan, dutch bros versus starbucks. they had a meeting and they said, well, it was not a bad meeting -- then they talk about dutch bros very, very rapidly growing good unit average volume and they say, david, they think they

can grow to several thousand and they're saying that in 2037 -- >> 2037? are you sure you're reading that right. >> 4,000 stores, 2037. that's when you want to value it i happen to like dutch bros. i like everything about it how much they can make at the kiosk per day -- >> 15 years. >> you see, that's my problem right now. i don't think that valuing a stock on 2037 earnings is that compelling look, i may be dumber than the average bear -- >> like the analyst that came out with the piece on flying cars >> i just think that -- i'm pointing this out. when i read this, i say, no, i'm not going to take that i happen to like dutch bros. but i refuse to use 2037 numbers

i would rather use -- i don't know if i would go for 2027 numbers. clorox i have good feel. >> clorox has a high multiple, doesn't it >> it has a higher multiple than meta platform. >> i'm going to want to own meta all day long -- >> dividend, clorox. the best piece today -- >> not again with the coca-cola. >> audi sterling, he's amazing he covers 437 companies. he wrote a book called "the source code. it's a must-read he says, have valuations jumped the shark? and i feel like you got to hit double zero to make money. there's a picture. his assistant, jackson, whom i

love i never trust a man with two last names -- >> but it makes the point you've been making the last day or two -- >> this is a great piece he's saying, listen, all of these, they jumped -- this is the guy, he covers application security, cloud security, data security infrastructure management, network security, equipment. he covers the world. he covers the waterfront he is is on the waterfront >> on the waterfront >> he could have had it -- >> we're going to take the price -- all right let's get to the opening bell. and the cnbc realtime exchange a lot more red as we expected, given what we saw in the open. here at the big board -- dell, of course, we talked a good amount about that. >> do you see someone downgraded dell today michael dell

>> let me finish celebrating its tenth anniversary. >> okay. i'm just saying, there will come a time -- let's wait to see what jay says jay. jay. let's see what the sheriff says, you know but i think that jay will make it so there will be -- whatever he says will not be enough for the jackals and we might to see a rally. i used to call gimbals let it come in and then we'll pick. let them come in there's nothing wrong with that. people hate to hear, that david. they want to hear, it's going higher what happens if i don't think it's going higher, unless there's certain stocks that -- like i said, the boring ones like coca-cola, bottomed in april of 2000. >> also the banks are hanging in there.

pharmaceuticals. today, not quite as much >> today is clorox's day >> today is a clorox day could i say something, i've interrupted you a lot today. i'm sorry. >> why should today be different than any other day i'm going to use this opportunity of you not speaking to do a little bit of news here. let's talk about that 3m deal and you can talk a bit about the stock as well. they're doing a reverse trust with a company in the food safety business. they're going to merge their food safety business into theirs if you're a 3m shareholder, you'll own over 50% of the company. they're valuing it about $9.3 billion overall that's the enterprise value of

it but it's an opportunity for them to exit a business that they have seemingly been interested in exiting for some time these talks have been going on more months. it's somewhat complex in nature. perhaps taking a while by the way, a pretty high multiple i was looking at here 32 times adjusted ebita. still 27 times calendar year 2022 numbers >> do you know many companies that -- i'm not calling them cats and dogs. people hate the stock of 3m now. dividend aristocrat. this is a company that is worth a great deal i'm going to put it in the makes things and does stuff category

>> okay. >> i want to move on to another name that you know well. >> i think michael is a amazing. the stock was up four bucks on that analyst meeting just friday -- >> they had an activist, it's que quentin coffey he's got five directors here and he's stepping down. >> he will serve as executive chairman until the end of 2022 he looks great for 77. >> he's amazing. and he's just also a fantastic charitable man and he's been able to create health care for people -- >> five new directors, jim >> some think that i didn't play that big of a role, but you obviously -- >> they're going to claim that

they played a big role. >> i want to point out to michael's credit, he's built a company out of nothing that is now the biggest provider of health care to people who otherwise would not be able to afford it because they -- >> what's the play here? is it eventually to hope there's consolidation. >> that's a great question here's the play. michael has bought company after company -- take a look at that stock. company after company after company and now it's just -- and then he finished he came on the show and said, wil listen, i bought all the companies and we're just going to harvest here. they're the low-cost provider of health care in this country. and they do a great job. i would tell people, even up here, just spiked. it's not an expensive stock. i like it more than i like you in age in the 90s unh was the 21st

industry -- >> look at the stock look at how well it's done it's a fantastic -- >> it's up another 42% over the last year. >> they do stuff they do stuff. plus, they have optum. >> look at that name >> it's fantastic -- it does -- david, unh is a cogreat company. people are going to hate me that i like these -- >> nobody likes their health insurer. >> look at cvs versus walgreens. cvs bought aetna initially now we have a company, cvs, that's probably going to go through -- they do stuff that's probably up today and i really like cvs. look, it's at 100. they do stuff. karen clinchlynch is doing a

remarkable job >> it sounds ominous, doesn't it >> doesn't it? >> it doesn't sound joyful >> disney is your charitable trust, investment club -- >> why do you hurt me? >> i'm not going to hurt you analysts are going to hurt you >> he's a good guy >> and he comes out with five questions, but some of the keys here are about next year and what's going to happen here. streaming, you know, there's a look at disney >> it's not held up. it's under close scrutiny. that means it's going down >> says we believe -- >> i like disney. >> we believe they can deliver 20% plus return by year end 2022 while a draconian case in our

view, if it cannot scale to profitability at all, we see 30% downside from here, given the pivots made to monetizing to streaming. next year is going to be a critical year. we're going to get a clear postpandemic look at the earnings power of its legacy assets and he goes on to say, we should see the beginnings of a meaningful increase of a content investment at disney and engage a relationship between content spending and how much customers are added. >> i think disney is good stock here where is the content i'll tell you where the content is it's in the company. who is in charge what is that about who is in charge what is that -- >> it's not about ownership as much as it's about ownership of those decisions. >> implication of disney, buys out comcast. we can get to a two-negative point here. >> are we there? >> with disney with a bunch of stocks we are.

i listed all those things that they didn't like at j.p. morgan, those are right. disney is a real company cvs sells at 12 times earnings >> we're already bouncing off the lows the ppi print. the concern about the fed tomorrow and i'm looking -- amd is up, jim. amd is up. nvidia is barely down. >> they make stuff and they have earnings i'm talking about companies with earnings i just don't want to buy the companies that are losing big money and you're valuing them on some sort of -- i don't know price to david the price of david at dutch bros. is -- >> it has a nice ring to it. >> centene is up again is that people thinking now he's retiring someone is going to buy

centene? the only company big enough is united health. >> given the scrutiny that any deal of that size would get, it's hard to imagine that you're going to do it, even if it doesn't necessarily on the face of it seem to have antitrust implications that doesn't seem to matter much right now. >> i think the stock is a great stock. 15 times earnings. 15 times earnings. what is that it's a fast-growing company. 15 times earnings. isn't that a bargain >> maybe that's why they're buying it. do you want to talk about pfizer this morning >> love pfizer. >> love it >> love. >> love. >> love. >> that's a lot of love, my friend >> he is one of the great cfos i think bourla should have been "time's" person of the year.

i put in my two cents. not that they listen tome. >> pfizer is the latest data we got on their antiviral which appeared to hold up quite well 89% reduction which -- >> pfizer is 13 times earnings look at the bank stock those are selling at such -- listen to me >> yeah. >> there's a lot of companies that you should bought j&j should be bought j&j is inexpensive and doing very well. pfizer is inexpensive, doing very well. there's a lot to buy jay can't hurt pfizer. he can huff and puff, but he cannot blow pfizer down. i had to make that point there's a lot of stuff that is good a lot of stuff that is good. i just want people to know what they own so they can buy much lower, if they don't. >> right we did get one more downgrade here of u.s. cable and telecom.

>> that's early. >> ubs downgrading and lowering the price target on comcast. >> you think you should buy rivian here, david >> do i think -- what? >> i'm just trying to get people to buy tesla which is real i like tesla i like tesla. >> there it is u.s. cable and telecom services, unchartered territory. why? because we've been talking aboab about -- >> it's time to buy the cable stocks i don't think there's anyone left who truly likes them. david, i work for comcast i happen to think that comcast stock has taken a beating like you wouldn't believe it's a total beat -- can we have the comcast chart? i'm going to show you a chart that is just -- well, darkness before dawn. >> that's not pretty

>> it's enough already >> that's just great >> i like the oils >> you like the oils >> yeah. you're down there with exxon -- >> exxon is having a strong year >> they make things, they do stuff. buy them >> you heard it. you know what to buy, we know what to sell. >> david, i got that number for square >> it's block, not square. >> after pay, they pay it a lot after, there's -- david, there's 24% sometimes miss 9% of the people whoever pay there was a survey this is a must-read piece of research what it says basically is that buy now, pay later is starting to unravel >> that's something to keep an

eye on that's been a market phenomenon -- >> it is starting to unravel >> market cap that has come out of mastercard, visa, don't have to pay 17% you can do buy now pay later and move up -- >> they don't seem to want to pay that much. this is wimpy. >> this is a man who always pays on time and that is bob pisani. >> pay the credit card every month on time. the important thing here is ppi costs is 18 points on the s&p. we've got an issue because it's going to bleed into consumer price indices. that's the concern and inflation is going to stay around longer. the dow is positive. it's not because of apple. it's because some of the cyclical groups are doing better we're getting boeing, goldman sachs, some of the banks moving into positive territory. that's nice to see at least early on, right at the open, consumer discretionary was

weak and that's tesla and ford, gm were weak, techs weak you'll notice more cyclical -- less cyclical sectors like rere reach -- reits, for example. defensive, health care, here's the mega cap tech. apple topped at 182 yesterday. you can see it's holding up big cap tech semiconductors started lower nvidia was 340 a few weeks ago, now at 280 it's got from a 65 multiple to a 55 multiple. even the semis are bouncing back here microsoft down just a little bit here so the important thing is, what's going on, the concerns of the market are changing. obviously, we're moving a little bit in terms of the concerns about delta and omicron here here's the bank of america global funds survey.

the number one concern is rate hikes. inflation is number two, covid is number three. this tells you that the issues around market and what they're worried about is changing. the primary concerns are now what the fed mightdo and that makes a lot of sense. if you think about the market issues right now, currently, the market is coming to believe that omicron might be a manageable event. we're still headline-driven. but that's what the market has come to believe. we don't know what the fed is going to do. we don't know how bad inflation is we don't know what that fed statement is going to look like tomorrow we know it's going to change but we don't know what it will look like this is the known/unknown right now. in the absence of not knowing, the market is pricing in a lot of hawkishness right now if the fed sounds more dovish tomorrow, we'll rally. like the ppi, the harder it is for the fed to sound dovish.

that's why cyclicals have been hit so hard. take a look at some of the dow laggards here. what's off of the highs. most of these companies, particularly industrials, they hit their highs a few months ago. honeywell, 3m. c caterpillar, boeing. the s&p is 3% off of its high. but very large parts of the s&p, particularly the cyclical sectors have been hit very hard and worse in the last couple of weeks. mega cap tech, we all keep talking about this, has held up relatively well. you see apple is only 3% off microsoft, alphabet. some of the big semiconductors are down in the double-digit range, but not that dramatically we want to watch how the fed statement changes. we've got the powell pivot we know he's going to change the transitory sentence in there but is it going to be more or less aggressive or hawkish and the ppi numbers is not going

to make the fed's job any easier david, back to you. >> thank you. >> that's totally right. exactly right. look, it's just -- >> getting endorsed by jim cramer. >> that's what's happening once we get through the fed. a lot of people are already trying to say, listen, some of these stocks -- it's pretty early in the day i don't know whether the stock -- >> well, capable is rebounding at least we got that going for us. >> those are done. >> all right i'm going to do the bond -- >> that downgrade, that marks the zb-- that's the end. before we head to the break, it's time for the bond report. let's give you a quick look at how treasuries are fairing this morning. we talked about what we can expect tomorrow. but there's a look at the ten-year yield still at 1 clnt 46 we'll go right back.

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a reminder you can get in on the cnbc investing club with jim. you can also point your phone at the qr code on the screen. it will take you there

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time for "stop trading." >> they're probably over did you know at this point they're really just down, down, down retail and this morning goldman put out a piece and they recommend capri. that's a good call but they recommend the seller, ralph lauren ralph lauren should not be sold. they're saying it's weakening right now. but retail 's been down, down, down wait for a bounce if you want to sell retail. retail, they make things and do stuff. >> you know what was behind there because it's rare still.

>> they're saying they have proprietary channel checks remember, apple -- >> take a look at rl, by the way. >> capri is good but i also think retail is just been crushed and i don't think it makes a lot of sns to sell ralph lauren after what i think is a desdecemant quarter and wi and sonoma should be bought. >> what you got on "mad money" tonight? >> i have bumble a stock that's been crushed. and joe papa i happen to like joe he saved the company and -- >> to say the least. >> he used to play -- you know jason on our team? >> of course >> he used to play ice hockey with him >> no kidding. >> yeah. and he and his wife had a baby

but he plays hockey with joe too. so, joe is pug nations >> yes, he is. >> i enjoyed this hour >> i'm glad you did so you can have fun >> smuker, another one. >> make things, do stock, as opposed to buy now, pay later. coming up the future of one of china pfls ev makers. we're going to speak about his company's game plan fofwegr rot. as well as the state of chinese d-listing.

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good tuesday morning and welcome to another hour of "squack on the street. carl and morgan both off this morning. a look at the markets a half hour into trading. dow up but the broader market is still under pressure >> we're 30 minutes into the trading session. starting with china-based social networking company, weibo.

after getting fined about $470,000 by u.s. regulators by saying some of the content violated various laws. and beyond meat getting an upgrade, saying a nation-wide launch at mcdonald's could happen in less than three months the stock is down. and we're going to end on gamestop, because why not? after dropping to the lowest close since march and it's a mean stock wreckage in this market environment it's not just gamestop amc was down for all of the talk, diamond hands and all that, certainly it's seeing a big slide in recent weeks >> and in a year, it would seem on a weaker note butted as you pointed out both amc and gamestop shares are up

amc we've seen significant selling from the ceo and cfo, selling anything that was left in his account and they're not going to make money at amc potentially for years to come. which is something we've been talking about but that hasn't stopped the stock and those who like it from sending the market cap to as high as 25 billion at one point. >> amc is still 10 times more valuable than it was in twenltd 20 gamestop is more valuable than in 2020. having suffered a big decline recently, are still up tremendously thanks to the retail revolution we saw in 2021 trrls that could be a big headline looking back on it. the participation of the retail investor in some of the stocks the volumes, david, are interesting. the volume is still at 41 million shares a day

metta's 21 so, the activity in spl of the stocks is still extremely active >> and yet, it's funny because you look at shares of robinhood. and as we hend of the year, it' fun to goback the beginning of the year, when robinhood seemed the beneficiary. that has not been a pretty stock since it went public tic to say the least. >> as we learn about order flow, it's declined. and new inflation data continues to show a sharp rise in prices and yesterday talking about a readjustment to a, quote, more normal environment >> rates will rise with absolute certainty and i'm sure we're going to talk about it sooner than most people with that, will come more

pressure on the economy, growth, more pressure on credit and therefore more on equity that's a given but that kind of readjustment not necessarily a bad something. the smal correction is not necessarily a bad thing. >> joining us is the chief investment officer ramos and former national counsel economist. good to see you both ernesto, do you think it will be a small ajgsment rate hike, not inflation or any of the other concerns in the market rate hikes are the number one concern right now. and i'm wondering if you think groirltszing to be small correction we would see as james gorman had put it. >> certainly i agree with you that rate hikes are the big

bugaboo in the market because the numbers for inflation keep coming in much higher than the expectations i just saw this morning, the marxt has to digest the fact that, not only will the taper be accelerated. but rate hikes will be more sharp and aggressive than they were expected to be a months ago. just think about one thing chairman powell does not want to be known as the chairman who presided over inflation that ran out of control he'd rather air on the side of being agreszival than be complacent and let this get out of hand, as it very well could i think it's going to be more aggressive and the market is not going to like it i don't know about the statement tomorrow itself, whether that will move the market over the next couple of years, you're going to have less liquidity from the fed going to the marked, driving prices higher >> he shouldn't want to be the fed chair that reigns over an inflationary period.

but doesn't necessarily want to be the one that pops the equity markets. as much as they say they don't care about asset prices, they've got to because the fact of the matter is more in terms of household wealth is tied to assets, like stocks, etc >> that's been the primary conduit. you see capitalization, two times gdp. household networks and income led by higher stock prices but the fed is in a box. they should have been hiking rates after the needed fiscal stimulus bill in march and they waited too long. if you look at the bond market, the flattening of the yield curve tells us the fed is on the cuff of a policy mistake and low and behold, the moment

jay powell saw commodity prices start to weaken -- and we're going to see much lower growth and inflation in 2022. that will be historic. >> i mean, the fed, some could argue, have a credibility issue at this point. they stuck by transatory, they drop transitory and now they're facing a conundrum with what the prospects are for growth later on as forecasted by the treasury yield. >> so, i agree with joe. i think both inflation and growth will start to taper off in the earl ey part of next yea. it will decelerate from the high levels we're seeing today. and the fed does hike and in this market, you -- because of the elevated evaluations you're seeing in your secular and your

tech stock we like high-quality, profitable low-leverage companies that are also trading at distance auto zone is a good skexample oa stock trading at 17 times earnings but with very stable operating margins and very stable growth, regardless of what the economic cycle does these are the kind of companies that we see the opportunity because valuation risk on the high secular growth and economic growth risk on the more cyclical price of the economy that's where we're focusing on right now. >> give me a take then on what treasury yields are going to look like next year, given your forecast >> well, the curve is flattening get the treasury curve two years forward. what i see is the fed that will accelerate the taper

the market will get more worried about agresz vlg fed hikes wide end growth will be going quite dramatically and push higher late next year, maybe getting back to 160/170. to me it's higher yields liter >> and hitting 2021 on the 10-year yield. >> if you take the last four cycles, spot on with the top end rate was in april, 11 months after the economy bottomed in may 2020 >> we're going to leave it there. good to see you. >> thank you well, pfizer is out with what is positive data for the covid-19 antiviral pill. meg tirrell has details.

>> these are the trial and they're showing the same efficacy level, 89% in high-risk patients that's when given within three days of symptom onset. 88% when given within tofive da. no deaths among folks taking the drug verses 12 on placebo. this is an important update because the ceo of pfizer said the fda is waiting to see the final results before emergency use authorization. because remember the merck rates changed drastically from 50% to 30% by the end of the trial. and these were folks unvaccinated and did not have a high risk factor for severe disease, like age or an underlying health condition. it actually missed the primary

goal of a four-day symptom aleveiation and it did reduce hospitalization though by 70%. company also providing an update on how well it should hold up against omicron. on cbs this morning for the anniversary of the vaccine rollout. here's what he said. >> it's even higher than the other. variants it's extremely high against all variants omicron is one of the highest. that doesn't mean 100% proof but we have a strong, strong, strong, strong belief that omicron will not be effected we'll see the same results with omicron as we did with delta >> potentially good results there as we're seeing the variant spread around the world. pfizer reiterating the goals of 180,000 courses available by the

end of the year and 80 million by next year potentially in high demand whenever this gets through the fda. >> of course, we've been following it closely these are strong numbers there had been a concern, perhaps. i dent know that the efficacy would have tailed off. it didn't. there is drug interaction questions, particularly for the older population that might be on a lot of different medicines. because it could interact in a way to prevent you from taking it so, still room, despite what is a discrepancy certainly in efficacy for the two >> really interesting. i wonder if you've heard of anything the fda hassn't met. we'll have to see how they're looking at the two drugs

but you're right, the one give along with the pfizer antiviral, does have interactions with drugs. would they stop taking their drug for five days to alleviate covid? thanks as we head to a quick break, a look at our road map, including crypto on capitol hill they're holding a meeting on stable coin. the stock is down almost 20% since the start of the month and we'll talk logistics logjam with one of the country 's largest trucking companies.

toyota announcing big plans in the push to compete in the ev race phil >> hey, melissa. this news came out early this morning. briefing reporters and basically outlining what the company will be doing when the comes to electric vehicles. up more than 2% as the company has said look, we're going to be investi investing 35 billion in electric vehicles at least through the end of the decade by 2030, it expect to have 3.5 million in annual sales being strictly electric.

lexus would be 100% electric in europe, north america and china by 2030 and they'll have 30 all-electric models. the first is this one. comes out next year, the bz 4x they say when are we going to start to see the all-electric vehicles from toyota this is the concept pretty close to what you'll see in show rooms next year. take a look at shares of tesla they have been in decline. really for the last week or so and they're under pressure again today. despite the fact that elon musk tweeted that the company will be accepting deutsche coin for tesla merchandise. they sell everything from $50 to $19. it's it'ser for the merchandise that's good enough to give it a

nice 20% pop on the day. there's your ev news, guys >> i'll follow up on your ev news and ask, toyota put it in perspectival how big a shift this is. and it's another question of course >> a theoretical question. remember, last week they made an announcement about building a battery facility down there. toyota has been a laggard. they have no electric vehicles for sale pure electric vehicles in the u.s. they've taken the approach that hybrid electric would be the transition formula that people would want and they're correct those hybrid electric sales are red hot right now. but in terms of pure electric, toyota has said we think hydrogen is where to go to

what you're seeing is toyota saying we need to have a pure electric it can't just be hybrid. it has to be pure electric and that's what they're investing in >> thank you let's continue with the ev sector we're joined by the president and vice chairman. you're here, at the new york stock exchange let's start on the whole questions around listing there's concern among some investors when it's a chinese company listed here that it will be delisted. what do you tell your investors in the u.s.? >> i tell the investors it's something to clearly watch and monitor because obviously it will impact our trading activities the way we see it, it's been around for many years. it's still evolving.

obviously there's a balance and a plan that will take probably a couple of years to lead to eventuality. something we think will still take time to play out. but the company, we have been prepared for any eventualities we've successfully completed our hong kong listing this year. so, we'll be able to independently trade in hong kong, whatever happens in new york i think a lot of our share hltders can buy both hong kong and u.s.-listed securities we're confident there will be a solution coming out of this. >> and again, not to dwell on it, but it's unclear exactly what the future will hold. have you got a clear directive on what to expect? >> i don't think anyone has a clear, definitive answer on this so, we're just monitoring it

>> let's talk about the business one where you're launching new models in china as well. when you think about the competitive landscape, what, in your opinion, positions you xpeng well in china and around the world because you're competing in europe? >> one, we're a tech-driven company. we want to focus on capabilities of a vehicle that is the whole mark of our product. if you look at the products we launched and soon to be launching, the suv will be pack would technology as well as advanced charging capability second aspect is focussed on a mass market positioning. we're target price lachg to $400,000 that's roughly $20,000 u.s. dollars to 55 u.s. dollars

and that's where we think is the sweet spot for ev development. i think we're confident we can tackle the largest opportunities in china and we are thinking about expansion to europe because i think global opportunity is compelling as well >> your overseas market other than china i'm wondering whether the united states market would be welcoming to a chinese ev maker? >> well, i feel aoptimistic tha u.s. will ultimately weltcome fantastic product. it's going to take a lot of preparation before we tackle it's big and takes years to develop a brand. will be prudent given the entry timing but it's an attractive and big market too big to ignore.

>> when it comes to the batteries that power the vehicles, there are some who wonder if materials will be in short supply given what is a spike demand have you seen any issues as a result of the supply chain constraints around the world >> you're talking about two questions. one is battery is a very key component of our product probably the largest value component and also the recent raw material pricing increase does put pressure on the business and the cost for all of us in the value chain. but we have been successful securing strong partnerships with key battery suppliers and have been working with them in terms of securing good pricing and quantity so, that's something i think we need to build better partnership

as we're not battery makers ourselves. and the other supply chain broadly is related to chips. chip shortage is the constraining our supply chain and i think that's something we have to navigate in a real-time basis. there's very low visibility in the coming months in the chip supply i think overall the situation will get better by second half of next year as the company is limbo in the part of our suppliers. >> finally, brian, on the broader question about evs the benefit is that it helps to decar decarbonize the emission size. in china, there's coal used to fuel electricity plants and presumably your cars will plug in to the grid that will use coal how do you explain the benefits

to the planet if china doesn't move to more aggressively to other renewable sources for its electricity? >> i think all it's an important question obviously, we have zero emission in our product the electricity is generated by a number of different sources and i'm happy and hopeful the alternative sources are increasing for the electricity production and the redistribution on the grid will have beltter emission control and i think thaltsz something ev can help. overall, we need to push for decarbonization. and also on the manufacturing, modern materials those are things we focus on intently as a company.

that's why i think es trksz for us is a core mission as we develop our business >> brian, we appreciate your taking time with us. thank you. >> thachg you. and as we head to break, checking shares of ralph lauren sliding after upgrading from a buy. brand momentum indicators are fading we'll speak to one of the nation's largest truck companies. this... is the planning effect. this is how it feels to know you have a wealth plan that covers everything that's important to you. this is what it's like to have a dedicated fidelity advisor looking at your full financial picture. making sure you have the right balance of risk and reward. and helping you plan for future generations. this is "the planning effect" from fidelity. - stand up if you are first generation college student. and helping you plan for future generations. (crowd cheering) stand up if you're a mother.

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welcome back i'm rahel solomon. prime minister says the entire country is grieving after yet anathder zaser 59 killed and dozens more injured when a fuel truck exploded in the second largest city they were trying to collect gasoline leaking after it was involved in a traffic collision. earlier this year a earthquake killed 2200 people and the country's prime minister was assassinated and a storm is bringing snow

to i-80. at times, the region was getting more than five inches of snow each hour. but in the arctic, record heat united nations agency confirm as siberian town confirmed 100.4 during a heat wask the highest temperature ever recorded north of the arctic circle back to you. >> thank you cnbc is out with a new fed survey they begin their two-day meeting today. steve. >> david, thanks markets bracing for a hawkish pivot. and they set out moving stimulus quicker than expected. this is amid falling unemployment

it shows glorowth forecast going higher and our first look at 2023 is just under 3%. both are above trend growth. unemployment expected to fall further. into the midthrees, dropping to some of the lowest levels we have on record the question for market is has all this good economic news been baked in so the more important worry the fed pivot. it's modest with the s&p looking to rietz 1.5%. that's through 2022 and 6% by the end of 2023. and 2.5 by 2023. the 31 respondents think the fed will respond tomorrow to the tune of 30 billion the fed funds will rise to 2.3%

by 2024. good news. inflation is seen peeking in february bad news though, next year still forecast to be near 4% can strong real growth and high inflation coexist or will it cool the economy melissa. >> steve, thank you. time for the etf spotlight ticker xme down double digits in the past month and still down 25% year to date one group to watch, alcoa, following news it will be updad t iexex engdtohend nt shares up 120% for the year. we're going to take a quick break.

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the crypto conversation continues on camit'll hill, following the meeting on crypto ceos here to dive in to crypto regulation is the cofounder of the first federally chartered digital asset bank in the presidential working group stablecoin report. great to have you with us. there's a lot of recommendations out of the report, everything from what should back stable coins, and who should issue stablecoins. whether it should be an insured agency what is the more controversial recommendations? >> i think first and foremost developments are largely positive i think what it's done for

crypto is no clarity and any kind of even strict regulation is welcome by the industry from a perspective of stablecoin issuance, we've seen $170 billion of stablecoins, which is eye popping, and it definitely is something that they're going to look at when we talk about bank actually issuing it, doesn't surprise that banks are the right regime and occ is the right regulator when it comes to picking deposits and issuance. the thing i want to mention is some of the concerns that were pointed out and particularly some of the worries around banks. i think they're very much alleviated when you think the regulated stablecoins and definitely the most popular, they do not suffer from the risks because they are

effectively backed by treasury that was made extremely obvious. >> that wasn't always the case and wasn't always the case recently for instance, the stablecoin you use, right that you depend on, it's 00%, backed by cash and cash equivalence. in july, it's only 61% in june, only 46% was cash and cash equivalent. they pivledded but tpivoted because they chose to. because there was public concern about having corporate bonds, be part of the mix of their reserve. but they didn't have to and isn't that the issue >> by the way, it supports all stablecoins we believe meets the threshold and we do work with institutions institutions are very sfis kated and do choose the actual stable

coins they want to interact with it's not just consumers. institutions want to do settlement based on asset and do their own research on the technology behind it, which block chain they're being issued on there has been a strategy change but there's always been other coins and projects and again, i think the change is positive and clarification and transparency around what is backing the stablecoins is incredibly important but the concept that somehow they're not backed or they're running fast on reserve, that's not been the case for any of the assets that have been approved and used in the united states. >> tether and u.s. dollar coin are the two most popular stablecoins out there. u.s. dollar pivoted to a one to one backing. tether earlier this year 2.9% nof reserves were in cash.

when you say there can't be a run on the bank, i mean, there is no -- there are no rules preventing these coins from going back it sounds like what you're saying is it's buyer beware in terms of which stable coins you use. for it's up to you to look at the reserves, their monthly audits, basically. and figure it out yourself; that there shouldn't necessarily be rules, per se, saying you should be backed -- >> two things. the first one is within the united states, there is not the most popular asset tether doesn't really come into conversations with the institution we work with and in the united states we primarily work with other assets that have a stronger regulatory and transparency terms of backing. these developments point towards the need of normalization of crypto and financial markets and the need for clarity around what

is acceptable for stablecoins and what is not for stablecoins. regulation is necessary and regulatory clarity is good for the industry because it allows innovation the industry wants to know what the rules of engagement are so we can engage. clarity is necessary and regulation is very welcome . i will point out it's the only federally regulated bank because we believe in clarity, regulation and we have the same high water mark that all the other federally charted banks out there. >> thanks very much for joining us >> thank you for having me >> let's stay with crypto. robert frank is with us now and taking a look at why the recent drop in bitcoin may have some at a perfect time >> bitcoin off 30% from the high it's an ideal time for crypto

investors to take advantage of a tax loophole that could go away starting january 1st under current law, crypto hol holders are exempt from the wash rule if you bought bit coin at 65,000 and sell for 47, you can use the $18,000 loss to offset any gains and immediately buy it back to stay invested in the market. now, crypto markets have lost over $700 billion in market cap just in recent weeks those losses could be highly lucrative to offset other gains from crypto or even the stork market all of this is likely to change next year. that's because the build-back better plan eliminated the rule for crypto tax advisors recommend they sale with the highest cost before january 1st.

under the infrastructure bill that's already passed, crypto exchanges like coin base will be required to report holdings to the irs and be required to finally start sending customers 1099 forms that will make it easier to calculate taxes, if they want to pay them >> thank you still to come, we're going to talk to the head of one of the largest trucking companies about the state of the supply chain, evs and a lot more. uber jumping, after ceo spoke at a fireside chat or conference and said -- well, he gave them some news. saying last week was the company'bes st week ever in terms of overall gross bookings and that sends the stock promptly higher.

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welcome back to "squack on the street." the rise in fuel cost forced to hike prices going to the new year live for us in el paso, texas. with more, christina >> reporter: good morning, melissa. almost every service we use is helped by transportation networks like the semis passing behind me. but many private business owners like in el paso. are faced with increasing inflationary pressures from fuel, wages and employee benefits >> we're seeing it in insurance, fuel, maintenance, wages, the people, tires are going through inroof equipment. all these trailers you see sitting around here have doubled.

>> reporter: take, for example, the november fuel prices they've surged to the highest levels since 2014. and hourly wages increased 5%, just this year alone and the latest survey from the conference boerbd shows corporations plan to put aside 3.9% of total payroll for wage increases next year. that's the greatest bump since the great financial crisis so, many corporations with wage and fuel increases are faced with a dilemma. eat costs and hurt margins or pass it to consumers >> they would absorb costs and reduce the costs by becoming more productive, training labor better and investing in better machinery. they can pass it on to their consumers. >> reporter: although many corporations do have to pass on the cost to consumers, you have many economists saying inflation is going to subside in the later

half of 2022 but consumer prices will remain above the fed's target of 2%, which means you and i and these corporations are going to continue to feel the pinch back to you. >> thank you well, joining us to discuss the implications of all of this on his company, as well as the roll of ev trucking is the head of ev international. respond to some of the things we heard in christina's piece higher trailer cost. what and how are you dealing with what seem to be increased cost for your business >> always worried about inflation because anything that could impact the demand equation for consumers is a concern to those of us who won't trade. it's something we're mindful of and the inflation costs are real you mentioned equipment for next year looks componentry shortages. they're going to have a big

impact on the cost of new trucks and trailers and the availability of such in 2022 we thought we could buy that after the experience in 2021 but looks like another difficult equipment year in 2022 >> yeah. what is that going to mean then? and i ask that in a broader question as well, given all the different things we hear about supply chain problems, whether it's a shortage of truck drivers or trailers. are either one of those a real thing? and what you mentioned is that going a be a concern with the supply chain >> demand is really healthy and we haven't seen a drop off for demand of our services, which means the health is very strong, from a freight standpoint. the things we mentioned. we've had issues with productivity it's taking longer to get back to us so we can get the next order.

that has bee relative to the ability of serving the customers. secondly, the lack of new of the shortages is that's not a relief valve so, we have to get more through the system to help serve customers more effectively >> no doubt. no doubt in the trucking business, labor is the number one cost followed by fuel and those things are what we've had to deal with and our customers have supported us so we can take care of the people that take care of them so inflationary cost are very really in the supply chain >> you do have a plan to introduce a number of ev powered trucks what i see as many as 50 beginning in 2022. why are you doing that and early in 2022? are these going to be on the

road >> zero emission vehicles is are goal 60% reduction by 2035. unfortunately, we won't see those electric trucks in a meaningful way until late in 2002 probably fourth quarter. it gives us an opportunity not only to learn how to use a different type of equipment but also the charging infrastructure and all of the things it takes to manage around an ev it's an important year for us to get learning but it will be late in the year in 2022. >> all right later in the year. appreciate you taking some time. thank you. >> thank you as we head to break, let's take another look at those stocks gamestop up. robinhood continues a slide down 2.5% much more on "fast money" at 5:00 and reaction to day one of the fed meeting that starts tonight at 5:00 p.m. eteasrn we'll be back. don't go anywhere.

welcome back to "squawk on the street." we are still tracking a sell-off in certain technology names.

within that particular sector we are seeing weakness in a variety of stocks including those in remote working players like adobe on the software side and service now as well. you have solar stocks coming under pressure today also keep an eye on microsoft down 2% so far as megatech nation get caught up in that broader tech sell-off. there's more "ua othsqwkn e street" coming up. stay with us here. don't touch that dial.

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nike looking to expand its presence terms were not disclosed but the deal will extend the digital transformation this is what the co-founder told us back in march >> it's really amazing how we work with shoes and do content and design the first

time it's done so it's very exciting and people manifested their excitement in their money to buy it. >> melissa, i'll just defer to you on this one. i know sneakers are collectibles so it makes sense to some extent >> remember last month nike announced it was patenting digital goods. foo footwear, et cetera. it's not a surprise they are moving heavily with more and more people going there. you have to dress your avatar. what is your avatar going to wear to the virtual casino or the virtual concert? >> maybe those right there >> i feel like it's something you can't say on tv. i don't know >> you may well be right i can't find the guy's name who was pretty funny >> nike earnings are next week that's a key read for the sector in general what they say about

vietnam manufacturing which has been rebounded significantly since the last report, et cetera that will be a good read >> that's true speaking of things that aren't rebounding, thank you,melissa, for joining in today we should note the market back to near lows s&p down about 1.06% do notice nasdaq comp down shares of microsoft off as much as 4%. that will do it for us on "squawk on the street. "tech check" starts now. happy tuesday. welcome to "tech check." today another upgrade of