a look at the futures this morning. we've been higher all morning long right now the dow futures constituent indicated up about 300 points s&p up by about 32 that would not be a record, but awfully close to it. guys, that does it for us today. we'll be right back here tomorrow now it's time for "squawk on the street" good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber has the morning off. futures suggest we'll get awfully close at the open. the bank of england, the first major economy set to raise rates.

cancelled performances, closed stores, delay to return to office, and mcdonald's settling its lawsuit with the former ceo, one of the biggest claw backs for history. here's what the fed chair said yesterday about taper. >> if you look at the state of the economy and the amount -- the strength of demand, the strength of just overall demand, strength of demand for labor, look at inflation, look at wages, i think moving, you know, moving forward the end of our taper by a few months is really an appropriate thing to do i think omicron doesn't really have much to do with that. >> he did say that the taper really the completion is only a couple meetings away and there really might not be that long of a lag behind it.

>> he doesn't want to get trapped in the idea that the kind of supply chain problems are solved and he's still tightening you don't want to do that. we saw major commodity collapses in the last couple weeks i think he's saying, i'm going to hedge my bets, full on like a fed chief. it's entirely possibly that the get the port solved, the rails solved, the plastic solved, the paper solved, the shortage solved, suddenly the chips solved, and then you get the housing numbers we just saw, which has probably peaked, and you might be fight -- he's got to be careful. i know the market -- we're in a seasonally strong period, a santa claus rally almost every time in the last 20 years, but i wouldn't go crazy here once the fed starts tightening, a vast majority of stocks you liked before, you can't like anymore. >> why does the bond market not believe the dots you have the two-year yield

dipping a bit, expectations falling a bit. they don't think the fed will have to hike as much as the committee believes. >> i think the bond market recognizes in a lot of ways we may be peaking right now look, it's entirely possible, as i get now tested every day, it's entirely possible, even though we dismiss omicron, omicron really takes the economy down for a couple weeks, three, four, five weeks the spread is insane, similar to the end of the spanish flu if you looked at the way the spanish flu ended in 1918, 1919, it could be like omicron it could be a stunning end, and then people going back to work and there wouldn't be as many shortages. if people stop getting sick,

ford motors will have awful semis it wants. >> andy slavitt tweeted this morning about a consensus of various researchers, omicron is doubling every two to four days, but they see it perhaps peaking in january, kind of like delta took two months. does the market just look through the next two months? >> i think if you had an end to this darn thing, you would be able to say, you know what the shortages are kind of ending here powell is very good. he knows that this thing could end as fast as it started. he was very good, by the way, when he called the bottom, even with omicron he's very smart. he's not going to claim he's a doctor, which is good, but we're getting used to the idea that everybody we nose has someone who got this thing in the last 48 hours this is frightening. the livan goes all the way to the top.

there's so many people who feel badly. there's not enough -- where you get a flee test every day, but i think we'll have a lot of people absent, and then we'll have this last-minute gasp in the supply chain, and we may come back. he knows when he did lockstep, he killed the market there were people on this morning saying, listen, he basically has to destroy -- what somebody really said in vietnam, but it's been the consensus. why can't we just say he's doing a good job have we created -- inflation i don't think so so much of the inflation is directly related to the supply chain. if we solve the pandemic -- and this thing is the grim reaper when it comes to getting it, but not when it comes to killing you, except if you're not vaccinated so in many ways, this is the answer to our country's inability to get everybody

vaccinated, which is you're going to get this thing. i don't think anyone who is in the medical community following this thing is say if you're unvaccinated, you're safe. i think everyone is saying, this one, omicron, gets everybody people have had a year to get this it's not about availability anymore. >> no. >> this will be the consequence of your inaction >> this is not a republican virus or a democratic virus, okay you've got to go back and read the statement that eisenhower said, it's all time, it's a national mission to get everybody safe against polio this is a national mission to get everybody safe against covid, all right it is not political. just like we didn't want anyone to get polio, we don't -- this is the most tested vaccine in history. the vast majority of vaccines

you ever had, the measles, nowhere near as tested, the mumps, the rickets, tens of millions of people have taken this thing we ought to get away from this this is about the nation you don't want the nation to be out of work. it's like the nfl, someone was saying why don't we let everyone place. i went to a virologist, who said, we don't everyone to get sick we do not have a situation where people are not sick. >> to uyour point, cdc warns cae jumping to 1.3 million by christmas day, deaths surging to

15,600 a week. apple delays employees ease return to office, temporarily closing three stores due to the rising cases broadway a bunch of shutdowns, a bunch of high-profile cases, so we don't shut down like we did in 2020. >> no, we're going to play through it until we can't. colleges not playing through it. those people go home. >> nyu is sending a lot of students home. >> everything is a super-spread. when jpmorgan decided to cancel a healthcare conference, they didn't want a superspreader event. it is a living, breathing organism it infects people. people think it's not or some people feel it's made up, but i don't want to get it, okay i'm neither republican nor democrat i don't want to get it i think that that's a -- we did

not want to get polio. we should not want to get this, okay >> so, does that mean that you start shopping for the deltas and the bookings and airbnbs, all with calls today >> i think we'll have a paw. i saw phil lebeau earlier. i think there's still plenty of people who feel i'm vaccinated, i get a cold but i'm concerned if you're vaccinated, it turns out the cold is this, you're going home or going to be quarantined i'm still playing with the incredibly scary gottlieb of a couple days ago, which says you go overseas, you can't be quarantine tee when you get the illness. i think it's more pervasive. i think people in my family who are quarantined, people in my family who have it, people all over in different places, a big

party on saturday night among people who are all triple vaccinated, almost everybody got it i mean, this thing is too pervasive, so i feel like -- i thought that powell -- if he had one mistake, i think he played it down too much. >> really? >> he was trying to not be political. five days from now, it will not be political we see regeneron at the bottom of this the antibody cocktail does lose potency with omicron we talked about a next generation that would perform better, but he said this is a pretty scary mutation. this was leap by leap. >> i've known lin since the stock was five it was chilling. i mean, i'm going to try to get -- my third shot was

moderna. and i know it's 4 1/2 months, that's how long it lasts they won't say that, because our leaders are completely ill-equipped to handle this. the cdc was -- so september, october, november, december, so in january i have to get another test in another six months, everyone will know it only lasts 4 1/2 months, but right now we're in a percent where our leaders are still letting us down rather than the real doctors that says you have 4 1/2 months. why they're letting us down, i don't know. >> you're saying they should be more explicit? >> someone at pfizer told me, and i'm not going to mention who it was, right before i had taken the third, they had, listen, it's a three-shot combo, he said no, two shots. i say, o. you work at pfizer

i talk to the companies. the companies are very different from the government. the companies tell you the truth. during this period, the business people tells you lies. business people, here you go i've got 4 1/2 months then i have to get a shot and you have four, you're nuts in you don't get a shot. this is what the doctors are telling me and the companies. >> because it's been a challenge for people to get one. >> well, you're going -- it's not a grim reaper, okay? it's a real bad cold some people oar going to get really, really sick. some people will die, but let's tell the truth we're going to go to break industrial production on the other side we'll mention mcdonald's, we'll get to all-time highs at the open don't go away.

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not a bad number, but we could expect more horsepower if we look at utilization rates, exactly as expected. okay, revisions coming in. what's interesting about 76.8, it's a post-covid high watermark for utilization rates the to find a higher rate, you have to go all the way back to 2019, actually, you have to go back to november of 2019 so it's a good number. revisions, 1.6 on production, now assistants at 1.7, and 76.4, our last read on october on utilization moves to 76.5. as expected on production, better on utilization rates. meaning a little less yield than they closed yesterday. the only two maturities that

have higher yields, 20-year and 30-years bonds, "squawk on the street" will return after these messages ♪ ♪ ♪ hey google. ♪ ♪ ♪ ♪ ♪ ♪

mcdonald's has reached a settlement with easterbrook. he's returned assets, that the company says he would have forfeited if he had been truthful in a statement, easterbrook said i failed at times to uphold mcdonald's values and fulfill certain of my responsibilities i apologize to my former co-workers, the board and the

company's franchisees and suppliers for doing so times, this morning, jim says, this is one of the biggest call backs? >> i don't know how much money this man has, but also he lied, he broke every single rule, worse than mitch kessler if we want to use "the morning show. i'm saying the character was like that. this guy was total, okay, i was really bad and i have to give the money back it's the lying had he just said, listen, i've been really bad about this, the call back would have been less, but the lying was horrendous i knew steve, but i like to say about some others that got in trouble, i obviously didn't. i think we both can say that, not quite the person we thought.

chipotle is unrolling a new concept in ohio, no dining at all. >> i know, and then when we again to what jensen huang, this is the ceo of nvidia, he has the avatar ready in 28 languages that can take order after order after order, and all you do is pick them up maybe he's intimidating to these companies. he's ready to speak to you i'm not try to go create a deal here, but jensen huang has an answer it's an avatar that won't get sick, goes to work every day. >> will try to get your order right and maybe suggest things it thinking you will like. >> it wants your native

language, jensen is very matter of fact. he says, jim, it makes no mistakes. as for the labor quotient, do you foresee the starbucks vote, at least at one location, spreading to other -- >> that is such a great question when i had one of the baristas on, she was so pro-starbucks, that i got the impression that had starbucks, one, hired better, and two, run better, i don't think it would have happened i think it's a soul-searching for stair bucks that it had an area that was not good enough that these people felt it had to do it. remember when greg hays took over at technologies, and the plant had very poor, abee, big

issues in how it run he said, listen, the plant was poorly run i mean, i now genuinely believe the starbucks that this kind and good woman was at, from the description, was not as good as working at another place. >> i see. >> i always thought that starbucks -- i know they have better benefits. nobody denies that, but they do have tough work rules, and starbucks has to think how they run. they shouldn't have any place that's as poorly run as the buffalo store, and i believe, after listening to her, it was not well run. >> barclays did name it as a top pick for next year. >> i think they adjust, they do it right i aim saying that starbucks, she loved it, she didn't say we're

organizing to destroy starbucks. she wanted starbucks to be better she may be ill-advised, but i think starbucks is a great buy here we're going to talk a lot more about picks for next year, a ton of annual it's calls this morning, cramer's mad dash and the opening bell in about six minutes.

time for cramer's mad dash as we count down to the opening bell. >> one of my absolute favorite companies and stocks is adobe. i'm going to tell you right now, people are looking at what he's saying at this analyst meeting and all they fork cussed on is the miss for certain projections, revenues below -- a lot -- people thought it would be 1820, they're coming in at 17.20. >> that's not a huge miss, by the way.

>> digit at set medical --ment 21% year over year growth. >> i think the stock can go down more obviously, but this is a great company. every time he gives you the conservative estimates at hi analyst meetings, it was a buy after it settled down. i urge people to not panic they obviously are, and i was telling andrew ross-sorkin, be careful. if adobe overrides -- you're going to have a lot of the cloud stocks down, so let's be careful. adobe is a powerful pull, because it's a great company the other disappointing

prin lennar >> i was thinking, a great home annual it's said this could happen lennar is a truly fabulous company. i did not feel their statement was as bad, but the language was certainly not as rosy, say, as toll brothers. you have the housing calls and adobe, the best dahl point, that is 23409 that good, so a little more circumspect, but i still expect a santa claus rally i do want to point out at the top tomas, my friend john ellis, who has a great newsletter, the omicron question you were quoting that if you haven't gotten omicron, you will

get it if you're not vaccinated. a lot of people are saying you're being so political. if you knew who i voted for, the idea that you think i'm political is insane. >> let's get to the opening bell here on this thursday. cnbc real-time exchange. it's bowlero, celebrating a spac 30 under 30 honorees, and micka brzezinski is there ringing the opening bell. >> i lime valero over bowlero. >> speaking of which, w.t.i. back over 21. >> the seven -- i had al monaco on last night, ceo of enbridge,

and i asked him about billing pipe -- coned said the city is not going to use nat gas, and he said forget about it he has the best outlet for natural gas. weaver going to be shipping -- but, they have a lot of dirty crude up in canada it's not palatable to people we have not nearly drilling as much away from permian people have said, you know away from permian, it's not worth it. so it will be in balance in favor of the bulls for oil >> as you look here, 47.25 or so, that's above some levels that some technicians had said don't set until we get above, say, 4725, but you're still not using this to buy more >> we bought some stuff earlier in the week. for the charitable trust, we

bought some chevron. we are adamant you should buy nucor. the release they put out was interpreted as negative, and that was a great opportunity, down 13, but we have a sclaent cl -- santa claus rally and that is terrific. over and over again, anything that's got no earnings, the analysts have dgraded some of the calls are a little late, downgrading docusign. >> m.s. goes to equal weight >> last guy in the downgrade pool is often wrong. >> hood. >> walgreens, but they have earnings hood is interesting here i was going over to -- and jeb

marks, for my trust, and we were saying that it's late to downgrade hood we could find a reason to buy it, but that's on which when everyone has a sell on something, we have one third of the cohort of millennial if millennial would stop trading options in dogecoin and indeed would own high-quality companies, they would do better. r robinhood -- we have a spac piece tonight. there's been so much awful merchandise offered that people are losing a huge amount of money. in the confines of so many stocks being good, there's a lot of people who own robinhood. i don't know, hey, look, valero is moving. that was a joke, but we have to be careful if you lose the cloud stocks, lose the companies that are

losing money, about have great 40% revenue growth, that's not enough anymore, and i'm worried about retail because of omicron. i think that omicron is sweeping the nation >> from a foot traffic point of view >> maybe you want to take a break, but mark mahaney's work, his service says amazon is more negative i don't know if amazon is not that good and the mall is not that good, we have to pull back alternates a little shopify is great i think shopify and etsy are the two that don't have supply chain problems i really like both when i see a stock like adobe down, i say, okay, be a little circumspect. adobe is a great company.

if david were here, we would definitely have mentioned morgan stanley, but they do see a lot of catalyst -- >> very positive piece, and at the risk of making david have to call in, i'm going to go with it. >> really? >> i'm going with it. >> he's going to be mad tomorrow. >> i thought the at&t piece was --it's simon flannery. understand people at home, there's these analysts -- steva steve toosa, i don't want to go against boss and i don't want to go against flannery. i think flannery is very, very good the leasing deal with jpmorgan -- sorry about their conference, it was ready to go, but there's other guys like ron hall, very nice game, but he's warmling up to apple

warming up >> we did get b of a, did go to a buy earlier in the week. >> the only downgrade that's unfortunate is medtronic they're executing quite poorly that's a company i have liked, but -- their brain execution is very sloppy, and they're paying the price. >> wells does go to equal weight he did post on a blog -- >> i sat next to him two weeks ago, do you think i'm okay do you think every nfl team will take the field this weekend?

i'm a guy who looks at the washington team and is debating whether they will forfeit. schefter, he's the espn analyst, but the numbers from the nfl will make an indication that there will teams who can lose this weekend because they can't field. >> yeah, cleveland and washington have some tough numbers. >> it's not killing these people, absolutely not, but they're not feeling you up to snuff. >> not sick enough for the hospital, but not well enough to play. >> that's where i am just so people know, i'm much more positive. i'm saying the pandemic can end, because this is how it ended with the spanish flu i'm saying you have to get to the end. you don't want to be the last person to die of a pandemic, for heaven's sake. >> you've said that for a long time it does bring to mind delta.

the consensus was for a loss and ed bastian tacked to phil lebeau this morning take a listen. >> first quarter is the weakest part of our year, so we're already prepared to go battered down, but at the same time what we're learning about, it seems like it could be less severe we have more tools and tec techniques to manage it effectively. >> the reason i wouldn't want to go to europe -- i got the triple -- it is the quarantine i don't want to get stuck, though being stuck in italy isn't so bad. >> that's why ryanair says they're going to take a traffic hit. >> my wife disagrees with me on this she doesn't want to travel i feel triple vax fine i worry about quarantine and changing the rules i've traveled extensively during

this period. i think that the airlines are okay stocks, not great, because i'm waiting for someone to say, listen, omicron is just too negative it hasn't happened yesterday >> meanwhile, the buyback chain continues. visa -- >> let's talk about that. >> and no novartis. >> that's embarrassing i don't want to buy back from a drug company who's -- put novartis up, the two-year chart. it's a disaster. visa, on the other hand -- oh, there you go visa, the whole buy now/pay later, but the buy now/never pay move, there's a lot of people not paying affirm is doing better than others, but, you know, in the meantime visa's pry-to-earnings has shrunk my charitable trust own master

cart which isrun masterfully run so what we had is we love the finteches that don't make money and hate the ones that make money that's the shifting. al kelly will make money for you at visa. the reason i'm so negative on nov novartis, what have they do? did you have david rich -- again, i want to make this absolutely clear i was not jealous that david went on the show i didn't mind i was blacklisted. it didn't even cross my mind, really literally up 25 points. a tour deforce on everything i think the brain work i do -- remember the brain is like the kidney or the liver.

their brain stuff is very good all the nobel prize guys -- and i deal with a lot of guys, because that's how -- i needed to get my -- like, hawaii. i was with the woman from "game of thrones" who had -- >> you always hobnob and then keep it quiet. >> i rein it last year virtually, and robin williams' wife is the champion, one of the greatest people, but the work i do, there's not anyone who feels that bioguinn -- even though i think david ripps will never come on. we're going to take a quick break. a look at how treasuries are faring obviously a day after the fed and b of e the ten-year back to 1.42.

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welcome back to "squawk on the street." we are now expectingour december preliminary read on m markit pmis. they were at strong levels midyear. now 57.8, a little light based on expectations, 58.3 was our final november read. remember, these are preliminary december reads 56.9 on the composite pmi. that had a high of 68.7 in may it follows 57.2, which was our final read in november finally, the services, biggest swath of the u.s. economy, expecting around 58.8, another

miss, 57.5 follows our final november read of 58.0. suffice it to say these are ought a bit light, especially the last went. of course, they're all over 50 for expansion, but definitely it seems as though the variant has put a bit of a hurt on some of these pmis we'll have to see if the final december reads improve at all. don't touch that dial or that remote "squawk on the street" will return after these messages.

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all your favorite tunes from the movie with sing karaoke. plus, see sing 2 in theaters with buy-one-get-one free fandango tickets. join over a million members by signing up for free on the xfinity app. our thanks. your rewards. give rivian earns tonight, the $5 billion plant is interesting, and ford with this new product to help customers manage their ev fleets. >> this is part of what i had marc benioff from salesforce on, with jim farley. jim wants very much to adopt more of a musk model he also had a higher price-to-earnings, which could help small business people we all are wondering when he

will sell that stake in rivian that's what i'm watching, because he has said openly he's going to compete against rivian. he -- the thing i'm most interested in is the muskrat love, i'm calling it, musk -- who again i had the has been a bit of a rivalry, but it's a high-end rivalry because both want more evs on and respect each other, which is fantastic. i think that jim is trying to change his model ever so quickly to being a tesla model and then exceeding it by embracing the idea that the people who buy ford trucks are missing a lot of work because they don't -- they're not organized. this is an organization thing. charge your truck there. just be careful betting against ford there are a lot of people who didn't understand farley and that he's a -- remember second place is who loses first i do like very much what he's

doing. i saw we're starting to get people to say you know what, we really admire what he's gone, even though -- the downers are starting to come around even though they continue to sell and keep sales on. i like ford very much. i don't think it's done going up at all if they sell the rivian, it's fantastic. >> hanging in above 20 which was a generational marker. >> very good situation. >> yeah. >> bill ford bought 8 million worth. i like gm, it's inexpensive but ford has multiple catalysts and i think if my maverick would ever arrive i would feel probably better. >> we were hanging a moment ago at least to an all-time closing high on the s&p. let's get to bob pisani. >> close hig dow doing well, home depot a weak link there today. the sectors, even though at new highs still bifurcation in terms of the markets here. we're seeing cycle sectors,

energy and banks and industrials, do well today that's kind of interesting tech is continuing to lag, interestingly, and defensive groups which have done very well since the pivot a few weeks ago, health care as you can see in the middle up fractionally the mantra since the powell pivot the end of november, sell less profitable tech, buy more defensive sectors like health care, for example, or utilities. if you take a look here the major sectors since that powell pivot happened at the end of november consumer staples and health care and utilities, they've all moved up very well cycle groups are kind of flat like industrials and energy and it's really the tech that's really been gyrating around here sell less profitable tech. look at software, the software etf is iegv, gyrating all over the place, dropped about 10%, since november 30th and then been sort of rallied back, come back down again in the last couple days. so it's down about 10% and gained about half of the losses

that it had. cathie wood's arc fund, arkk, their flagship fund, dropped about 15% right after the powell pivot at the end of november and come back a bit since then, not quite, really not much of a big bounce at all. apple's been the big gainer. everybody's fled into apple which is big profitable big tech that's up about 11% since the very end of november you can see the tech market bifurcating. ask, everybody needs to realize what's the killer of bull markets, two things that have to happen for a bull market to end, one is a federal reserve does rapid rate hikes over multiple fed meetings in a very quick, sort of unexpected way and secondly, you get a weak economy. neither of these conditions are present right now. this is why we're sitting at a new high on the s&p 500. in fact, you look at the fed statement yesterday, powell went out of his way in the second paragraph to highlight the strong economy that he said with progress on vaccinations and strong policy support indicators

of economic activity and employment have continued to strengthen, job gains have been solid in recent months, the employment rate has declined substantially. that is into the weak economy. that's the opposite of a weak economy. so you don't have the conditions for the bull market to just fall apart at this point. the question is whether it's all clear on more speculative tech out there. adobe down big, poor guidance, but even stuff that sold off after the powell pivot is not necessarily rallying here. nvidia, service now, broadcom, look at all the sectors on a fairly strong day for the market, to the downside. so i think the answer is, it is not necessarily all clear to go back and start buying speculative tech or less profitable tech, for example, even big names like semiconductors are weak right now. let's just say, still out on whether it's safe to go back and start buying a lot of technology rest of the market, though, doing very well. back to you. >> bob, see you soon

bob pisani let's get to jim and stop trading. i was going to talk about accenture, doing so well, but more of this market is airbnb downgrade by rbc basically saying it's too expen spinch there could be pull forward, but if you think that travel is going to pick up right now, tktsds be a difficult situation. they're not talking on-micron it's a good company. the problem is it's too expensive. >> the block cfo. >> from block. >> meanwhile, is being sued by h&r block. >> that's crazy. i happen to think airbnb is great. i think brian chesky is terrific the market is turning on these terrific companies because they're not making money and it's the ev the 23 sales higher versus booking higher versus expedia. it's a better company. that's why people sell it.

and i'm looking for the accentures of the world reporting numbers much better, and i'm recognizing airbnb is going to take heat be aware this market is not about liking the high multiple techs, the ones losing money, and otherwise there will be a lot of stuff to like you can't -- you're fighting the fed now. that's never been a good thing as fighting tape versus a rally which we have had almost every year between now and the end of the year although cross currents. >> lagarde on the tape saying unlikely will hike next year and can't assume because something happens at the fed it will happen at the ecb. >> santander people say no, they need higher rates. i happen to -- i've been trying to get my arms around great european names and it's been difficult. >> you have a spac analysis.

i caution people who sell adobe, many moments where they've offered conservative guidance. he is growing, the company is growing, it's a great company. it's -- it should be on everybody's radar screen to buy, not sell. >> jim, we'll see you tonight. >> yep. >> definitely stay safe. stay healthy "mad money," 6:00 p.m. eastern time as the dow has seen the opening gains, up 117, s&p 4717. i think you're going to like it here. umm, why is everyone... throwing things at me? look, as cfo it's my job to be ready for whatever's next. that's why i have my finance team, randomly hurl things at me. it's also why we use workday. it gives us insights, so we quickly pivot our strategy, people, planning, you name it.

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good thursday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla with morgan brennan live at post nine of the new york stock exchange. david faber has the morning off. nice gains at the open eroding slowly s&p almost back to the flat line of 4711 as the premarket suggested we might get close to some all-time highs. >> that's right. we're 30 minutes into the trading session so here are three big movers that we're watching this morning. we're going to start with adobe the shares getting crushed out with results before the bell the company offering fiscal 2022 guidance below estimates the shares are down about 8% right now.

plus, lennar moving lower with the home builder reporting earnings short of forecasts due to higher lumber costs and increased labor costs. those shares down 3.5% we will end with consulting firm accenture, the shares surging after topping earnings and revenue estimates for the quarter, the stock is up about almost 9% right now. it's up more than 50%, about 56% year to date, carl. >> all right let's turn to the fed this morning announcing of course it will aggressively dial back its bond buying, seeing three rate hikes next year. our economics reporter steve liesman has the latest on that and the bofa and now lagarde, steve. >> yeah. but carl, you said aggressively dial back. certainly the taper, i don't know about raising rates the story now that fed decided to remove stips more quickly and forecast future rate hikes it's the market's benign, even upbeat reaction mostly on unchanged bond yields some stock rallies

looking to have gathered team this morning the most remarkable in the hard hit nasdaq who rallied when the statement came out at 2:00 p.m. and another at jay powell's press conference it's less exuberant as you can see there, though. the obvious explanation, the market was girded for a more hawkish fed. the fed met expectations, doubled the pace of the taper, moved it up to $30 billion from $15 billion a month should qe by march and projected three rate hikes next year and three more in 2023. markets cheered a relatively benign rate outlook and powell's response when asked, why the fed is continuing to buy assets despite high inflation >> we've learned that in dealing with balance sheet issues, we've learned it's best to take a careful sort of methodical approach to make adjustments markets can be sensitive to it and we thought that this was a

doubling of the speed, what we're basically two meetings away now from finishing the taper. we thought that was the appropriate way to go so we announced it and that's what will happen. >> okay. this is how the markets have behaved since the famous powell pivot, 10:00 a.m., november 30th when it took the s&p up 0.7. actually that's wrong. the nasdaq down 1.6. the ii up 17 basis points, the 10-year almost unchanged the question not if the fed will raise rates but when we're going to get a chance to get more details inside the fed's thinking tomorrow morning, exclusive interview, with john williams on "squawk" at 8:30 morgan >> we're looking forward to it, thank you. that is a good setup for our next guests, let's bring in charles schwab chief global investment strategist jeffrey clinetop and stifel chief stijs

lindsay peaza. jeff, the fact that we did see a big positive bounce in equities yesterday, not necessarily that much activity in the bond market or treasuries, though. we're higher today and fading the gains, but this rather positive response over the last 24 hours, what would you talk it up to, given the fact that it was hawkish commentary from the fed? >> a couple things i think steve lease map pointed out maybe markets were braced for a shift, more of a hawkish shift this week. the central banks have done a good job setting us up to prepare us for this move, and so the fact that it maybe wasn't worse than expected maybe plays into some of the market reaction i also think it's the fact that fed and other central banks are acknowledging inflation now. transitory is gone and, you know, the ecb really jacked up their inflation targets for next year at today's meeting. so acknowledging that and not waiting until maybe they'd have to make an abrupt move these are measured moves by

central banks. it's easy to forget that when central banks move rates higher slowly meaning not at every meeting, markets tend to do well much as we're seeing today and yesterday. >> lindsay, i want to get your thoughts is the fed behind the curve and given the fact that we have seen a pretty dramatic pivot in the last couple weeks, does it matter right now >> i think the fed is behind the curve, arguably very behind the curve, and i think it will force the fed to have to take more aggressive action than they would have otherwise needed to had they initiated a removal of some of the emergency measures earlier. that being said, i think from yesterday's comments it's clear that the fed is still in no her troy raise rates as the chairman was talking about delicately, very cautiously and carefully navigating the shift through the still onset of the crisis. so yes, while they did double the pace of asset reductions, we're still seeing the fed engage in outright purchases and they will be for months, at

which point they can turn to rate increases but at that point the fed is going to be facing a delicate balancing act they want to continue to control inflation and inflation expectations, but also, as we heard from the chairman and saw in the statement, the committee still acknowledges that the economy is somewhat fragile. there's a number of risks out there in the marketplace they do not want to pull that rug out from under the recovery too fast particularly if the market remains very dependent on the monetary policy punch bowl at this point. >> jeffrey, to that point you look at yields today, i mean it's all a screen of red two year, long term rate, what do you think the bond market that the committee doesn't >> i think the bond market is recognizing there's inflation here to stay, maybe inflation does set until a 2 to 3% range next year or in early 2023 real growth stronger than the bond market has been pricing in. maybe the bond market has been

not priced for the reality of the above average global economic growth and inflation. finally coming on board. it's funny, as the fed sort of abandons transitory the market is being to realize growth isn't transitory and, in fact, it's here to stay >> i want to get your thoughts on what fiscal stimulus piece of this puzzle could mean going into 2022 as well. the build back better package is whittled down, stalled in congress, if you see that layered on to the picture what does that do to this entire conversation around inflation and monetary policy as well, if anything >> well, any time we talk about trillions more in government spending i don't know if we can characterize that as whittled down on a relative basis compared to the initial $4 trillion, yes, it is noticeably less but to that point we're talking about further government outlays, further money flooding into the market, which will have longer run inflationary consequences for the market. near term, absolutely, this

could boost growth in the early parts of next year and for some quarters beyond that, but near term benefit will be offset with longer term costs. eroding investment opportunities, growth opportunities, and, of course, raising prospects for inflation, something that is going to create an even more difficult scenario for the fed next year inflation is likely to peak, bbb aside, but even the second derivative decline is likely to leave headline prices elevated the fed has this very delicate balancing act trying to continue the recovery but also trying to rein in out-of-control inflation. >> okay. a topic not going anywhere thank you for kicking off the hour with us lindsay and jeffrey. >> thank you meantime big day for delta airlines out with guidance for q4 phil talked to ed bastion this among and our pleasure to have him on set. >> hello there

shares of delta moving higher having their analyst day today and they're moving higher because the company gave updated guidance for q4 and in the outlook you see good news and troubling news here. first of all, they knew -- they do now expect a profitable fourth quarter it was expected to be a slight loss christmas and new year, unit revenue is on pace to sur pace what it was in 2019. shows you how much demand is out there right now. however, they are seeing omicron impacting their q1 bookings. here's bastion from earlier today. >> first quarter is the weakest part of our year, so we're already prepared to kind of be battered down in terms of capacity but at the same time, what we're learning about it is, seems like it could be less severe than prior strains. we have more tools and techniques to manage it effectively. >> take a look at shares of delta. keep in mind that one other factor the company is dealing with, you're going to see negative commentary from the analysts today, higher costs

seeing that not only next year but really over the next couple years. 2024 is what they're targeting in terms of hey, we expect to be back, more profitable than we were in 2019 again, they expect that by 2024. let's pivot and talk about rivian after the bell today. the company will give its final q3 numbers do not fixate on the numbers the preliminary numbers were given during the ipo last month and not going to be dramatically different. focus on the conference call, ceo arj is likely to give an update in terms of deliveries and reservations for the pickup truck and the other thing when you look at rivian, what will they say about amazon, electric delivery vans will roll out and the suv production will be starting soon. nam of things people will be focused on. >> not to mention growth in georgia production we'll find out about that. on delta, what did bastion say about corporate travel and small business corporate sflafl. >> it's huge

the same thing from every airline. much stronger than it is for the large cooperations large corporate travel down 50% compared to 2019 small business down maybe 25%. so you can see a lot more demand when it comes to smaller business people are out there traveling making these deals >> i think that's notable in and of itself. back to rivian, have we actually seen another automaker that is this early in the process simultaneously look to produce three different vehicles >> no. but that's part of the key for them in order to be successful, they have to, you know, build all three of these vehicles and bring them all to market at one time the amazon delivery van will start soon and the expectation is, we may not hear about it today, but at some point the expectation is, you will hear about greater orders than the initial 100,000. >> finally, edmunds out with data this morning on the percentage of the market that will be evs in 2022. they think it climbs to 4% >> right.

>> 4.6 retail, would eclipse 600,000 units for the first time. >> i think we're going to end this year probably somewhere in the 425, 430 range so that would make sense you get the f-150 lightening, the hummer, probably going to start deliveries before the end of the year, you have a number of models starting to come in and then it really ramps up as we get close to '25. >> that's exciting to watch. >> it will be. >> we'll see you later nice to have you here all day. a break here as the s&p goes red, our road map for the hour mcdonald's settling the lawsuit against former ceo steve easter brook. >> the crypto craze continues with bitcoin down almost 20% over the last month. >> recalling reopenings, apple the latest to delay returning to the office, citigroup telling new york and new jersey employees to work from home for moe liys re "squawk on the street" straight ahead.

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mcdonald's reaching a settlement with steve easterbrook. kate rodgers has the latest. >> good morning. mcdonald's reaching that settlement with the former president and ceo steve easterbrook, who has returned equity awards and cash currently valued at more than $105 million, which the company says he would have forfeited had he been truthful at the time he was fired in november of 2019. now as a result, he would have been fired for cause instead of without cause. easterbrook was accused of

having affairs with four subordinates and deleting evidence of those affairs from his company devices. he pushed courts to throw the case out because he said the evidence was easily found on the company's servers. in a statement easterbrook said, quote, during my tenure as ceo, i failed at times to uphold mcdonald's values and fulfill certain of my responsibilities as a leader of the company i apologize to my former coworkers, the board and the companies' frieszs for doing so. the chair board adding in a message to the mcdonald's system viewed by cnbc, even as the company moves on, a big lesson is continuing to, quote, foster a culture where the expectation is that people will speak up in response to wrong doing. remember, this is a landmark settlement in both amount and apology to the board and company and also tied to easterbrook's personal behavior. goldman sachs tried to claw back $174 million in executive bonuses tied to the 1 mbd six scandal, like lloyd blankfein

and david solomon returned their share but gary cohen refused, donating it to charity, one example of how difficult these can be mcdonald's putting an end to this saga with easterbrook. >> major news for mcdonald's and major news in terms of a turning of the tide on some of these claw backs for companies and ceos and former ceos thank you. as we head to break, watch shares of fedex, which are up about 1% right now reporting after the close today. on tap, costs as supply chain and labor issues have pinched this year and peak season and an update as the delivery giant forecasted a 10% cease in holiday package volumes. i will be speaking exclusively with fedex president and coo n 'l.meaerho. stn ur wel be right back. m® by td amere is more than a trading platform. it's an entire trading experience.

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welcome back to "squawk on the street." bitcoin down over 18% over the last month the top ten market cap crypto coins giving up $10 billion in value altogether joining us to discuss crypto volatility and more is allen ceo at silver gate capital great to have you back on the show. >> great to be here. >> so i did want to start with some of the volatility we've seen in these asset classes. specifically because for silvergate bank the silvergate exchange network is what investors hone in on and you've seen growth there as of the end of september 41% increase, year on year customers and 457% career on year increase in average deposits when we see higher volatility in crypto currencies, what does that mean for sem? >> yeah. so silvergate exchange network allows our customers to transact for each other 24 hours a day, 7 days a week, so we are the primary regulated on ramp from

the fiat dollar into and out of the digital currency ecosystem, and so for us and for our customers, it really doesn't matter whether the prices are going up or down most of our customers, what we do is we connect exchanges, crypto currency exchanges, coinbase and gemini, to investors investing in bitcoin and other digital assets as an asset class. many of our institutional investment customers trade the volatility when the price is going up or down they're in the market and that causes increases in transactions across the silvergate exchange network and increases our deposit balances >> what is your take on all the volatility we've seen as of late in bitcoin and some of these other coins? >> yeah. i think it's not dissimilar to the volatility we're seeing in the broader financial markets

and, you know, one of the things that we look at is the institutional adoption and one of the ways we describe si silvergate's business, we are in a growing industry, this crypto currency industry, it's new and only been around 11 years, but definitely growing we are adding new customers. there's institutional adoption increasing and then we're adding additional products and services so, you know, again we've been doing this now for eight years and seen a lot of volatility and i think we'll continue to see volatility as more and more institutions come in >> so we have a fed that's now forecasting up to three rate hikes next year, a faster end to the taper as well. if you see interest rates cease what does that mean for your company? >> at silvergate the term is interest rate sensitive and asset rate sensitive we're probable one of the

highest rate sensitive banks in the country and many research analysts who have written research on silvergate have pointed this out as interest rates rise it should be good for silvergates' earnings. >> i have to ask about the new ven fund you're launching, ejf ventures fund. looks like you're going to be focused on early-stage investments in fin tech and banking, lending and payments. where do you see the ecosystem in general evolving, given the fact that you are an early adopter and first on the seen from a bank standpoint around crypto currencies? is that a big part of your investment portfolio >> yeah. it absolutely is, and we couldn't be happier to be partnering with ejf in this endesker as i mentioned a minute ago, we've been banking companies in the digital currency ecosystem for eight years, and so we sit at this unique intersection of the traditional finance markets

an the crypto markets and ejf is somebody who recognized the power of the silvergate exchange indoor we've been discussing they recognized it back in 2017 when we first met them, and, you know, they've been supportive and as we look to the future, our goal is to investment in disruptive companies that essentially are trying to bridge the gap between legacy institutions and the digital currency ecosystem and we just couldn't be more excited about this partnership >> so how does that factor back in with silvergate and the longer term strategies b. riley came out with a note this week focused on silvergate and basically argued that there could be significant opportunities including in markets with high friction costs, which is payments, with si as a potential competitor to visa and mastercard or remittance is that on the table for you

>> yeah. i think what the b. riley report was, was highlighting, is some of our efforts around stable coins and you've seen a lot in the news, you know, the last couple weeks and certainly this week with the senate banking committee discussing stable coins. silvergate, because we currently bank all of the existing stable coin issuers in the united states, again, we have this unique position. we do believe, though, the primary use case currently for stable coins is for crypto currency trading but the real future is this payments use case where stable coins can be used to transact in dollars 24 hours a day, seven days a week, across the internet, across a blockchain and i think that's why visa and others are looking at it as well, but as you may have seen in the president's working group report that was issued back on november 1st there's a strong desire to see

stable coins issued inside the banking system and silvergate is well positioned to be that bank. >> alan lee, thanks for joining us >> thank you, morgan. as we go to break, watch airbnb today rbc does cut the stock from out perform and cuts it by 20 bucks down to 175 from 195 analysts say the risk/reward ratio too imbalanced to justify an out perform rating. today's declines extend the recent weakness, stock down 10% and on pace for four straight weekly declines in five weeks. they upgrade bookings holdings to out perform.

welcome back i'm rahel solomon. here is your cnbc news update at this hour. record-setting winds are battering the midwest. minnesota just one of many communities with damage from strong storms.

the national weather service reported at least 55 wind gusts of 75 miles per hour, the most since 2004 u.s. army says 98% of its active duty soldiers met yesterday's deadline to get at least one dose of the covid vaccine. that leaves around 3800 unvaccinated starting next month the army will initiate what it calls involuntary separation proceedings against soldiers who refuse vaccination without an approved or pending exemption. france meantime is tightening covid restrictions on travelers from the uk. new daily infections in the uk have hit their highest levels since the start of the pandemic. cases are also surging in france and across europe. and back here in the states, kim potter is expected to take the stand in her trial over the shooting death of daunte wright. prosecutors rested their case this morning the former suburban minneapolis police officer says she thought she was using a taser when she shot and killed wright during a traffic stop you're up to date. carl, back to you. >> thank you

goldman sachs out with a new note this morning saying iphone supply looks like it's increasingly able to meet demand, despite some increased supply constraints joining us the analyst behind that call, goldman's rod hall. always good to check in with you. good morning >> yeah, good morning, carl. how are you doing? >> what are you seeing in the supply chain >> well, we -- i give you a couple different things. the lead time data continues to come down. it moved up a little bit last week it's back down again this week what we see with the iphone pro running about 8 days and the pro max 8 days and at the same time last year the pro was about 13 days the pro is better in terms of supply versus demand this year the pro max is still elevated. last year it was down to one day, effectively no delay, this year still 8 days. and then the iphone 13, mini and the 13, those are effectively no delay. we definitely see the supply

coming up to meet demand if anything the pros look like even in a constraint supply environment they're probably not -- the demand not as high as it was last year >> right. >> still pretty good throw the other thing i would say is the checks on demand at least what we can see are still fine i wouldn't say we see warning signs there yet. >> you point out you think it's more difficult to get an accurate read on demand trends in the u.s why? >> yeah. the most of the u.s. phones are distributed through carriers and so we have some data sources in china, we have data sources in europe, that track point of sale data and, you know, there's some official chinese data that comes out, but in the u.s. there's nothing like that. some people track receipts data, that sort of thing we don't have access to that the u.s. has historically been difficult to predict and is a large part of the emand, that' when the u.s. -- over the course

of the year it's about 25% of demand, but this time of the year closer to a third >> rod, it's morgan. the stock is down 2% today but in general it's been a strong run for apple this year and there does seem to be a cloud of bullish sentiment around the name as we go into 2022 as well. you have the neutral rating, a price target of $142, which represents an almost 20% drop from where we are here in share price. what do you see triggering that? why aren't you convinced you continue to see a strong run next year? >> yeah. i would start off this answer by saying we're not sellers and we have been sellers in the past so, you know, we legitimately have a neutral rating on it. i think the reason, just to address the first part of that question, the reason the stock is rallying is kind of what i'm saying about demand, people are picking up that demand is okay it's not -- there's nothing going wrong with demand at this stage. i think some professional investors if you look back on a month or two ago, they were more

underweight. some of those people may be closing shorts we've seen a lot of retail activity in this stock those are the kind of things driving it here. i think what will crystallize is if apple follows the trajectory of other consumer electronics products we're seeing, tv demand weakening, home printers weakening, pcs are weakening a lot of these things are beginning to weaken. will apple do the same if it does our numbers will be closer if it doesn't then consensus numbers will be closer to right. like i say, we still have a neutral because we're seeing this demand that's not so terrible right now >> i mean, we're seeing the faa push back on 5g rollout right now, just given the fact that there seems to be some conflict there with the technology, and its interference with flights. how real is that risk, whether it's to apple and the adoption

of 5g handsets or to some of the other stocks you cover as well, to that infrastructure actually becoming more meaningful more quickly? >> well, you've got an abundance of caution in a place like the faa and this is for particular elements of spectrum, not all of 5g i don't think there's much real risk to 5g technology rollout here i think that you could see some of the spectrum bands delayed by that, and those are important spectrum bands, but in terms of the technology itself, no, i don't think there's any real risk there >> finally, rod, i'm sure you're aware some of your peers on the street have gotten more positive as morgan points out around the idea of an ar/vr product in the year to come and think that the valuation will reset higher given historically what's happened when they moved into new products what do you make of that >> well, we're pretty deep in the weeds on that technology as you might imagine.

ar, you know, this will be ativated view probably i think av is -- it's not ready now. we have major physics challenges to get those glasses that are going to give you the overlay vision on the real world deployed i don't think you're going to see anything for five years on that i think your product is vr, where your vision is completely occluded and the question there is, will consumers take that up? how many of us are going to spend all day locked away in vr? we might it could be a compelling use case for remote work, things like that, but, you know, previously, consumers have not really taken it up we think something like the oculus maybe sold 10 million units. we'll see on vr whether that takes off or not or if apple believes that's a good enough products from launch or not. ar i think quite a bit further out than most people think. >> fascinating

look forward to reading your next report on that, rod appreciate it very much. >> all right happy holidays. >> good to see you same to you. turning back to the broader market where it is a mixed picture right now, bob pisani joins us on set. he spoke with a one-man institution unto himself, art cashin, about the year ahead outlook. >> he wasn't with us, but i did meet up with him 15 years in a row at the bar and as sarcastic as ever, and wants to do, art went against the consensus, thinking on many topics for 2022, including the idea that fed will become increasingly aggressive raising rates next year art says the headline a year from now will be rates didn't rise as much as people assumed >> i would suggest to the viewers, don't pay attention so much to the meetings and what are said then. remember that powell has to be reconfirmed in the middle to end

of january so if they move to taper a little too rapidly, if somehow the market takes it badly, he's got to allow for a back off. >> art is optimistic about the ultimate impact of covid, and its many variants. this time next year, he believes vaccines and antiviral pills will have made significant advancements against the disease. >> i think the headline will be that it appears somewhat manageable i think the big hope here is less vaccination and more the treatments, the pills. if these things appear to work well, then i think we will make covid manageable not unlike the vaccines prevented smallpox, but flu and a variety of other things, are

managed more by therapy treatment. >> cashin' bullish on stocks one reason the health of the consumer he says the consumer spending boom will continue into 2022 >> moderates, you could have a sudden economic boom when people go out and start to spend. almost like the post-world war ii baby boom, they're going to go out and spend team talk about the roaring '20s, we may get them. >> now another reason art is optimistic is the tidal wave of corporate buybacks that will, again, lift earnings in 2022 >> they've been a factor i think that may begin to change and we're going to have to look for a rather broader spread in the economy. i don't really believe that 20 or 30 companies are going to tell us weight happening in

america or even in the world as we've had over the past year. >> art was referring to technology stocks there, but i want to end by noting how much higher earnings could be in 2022 because art was very bullish on that right now analysts estimate s&p 500 earnings will rise 10% next year cashin' believes it will be a 15% rise and perhaps 20% rise so he's very much bullish and thinks the analysts have it wrong. you can see the complete interview with art on trader talk.cnbc.com. great seeing art across the street and, of course, the christmas tree is there and, you know, he's a year older, but still lucid as ever and sarcastic. more on this he has interesting comments on china. he believes after the lunar new year, the leaders in china are going to be a little more provocative and interesting things to say, trader talk.cnbc.com for the interview. >> what did you have for lunch was it a steak lunch quintessential wall street lunch? >> you have what you call irish

caviar and things like that. want to know what pigs in a blanket look like. for 25 years, since 1997, petitipigs in a blanket and few bourbon and then get serious after that. that's what you get. they do make good sliders at bobbie van's >> have you looked back at his forecasts over the years he's been doing this a long time he has his finger on the pulse perhaps better than anyone else. how accurate has he been >> he's been remarkably accurate we did this about three years ago, his forecasting is much more accurate than the average one. it was hitting like a 70% forecast rate, which is kind of remarkably high number the old saying if you go 51% on the stock market picks you're going to be a winner in the long run. it's very good a lot of things he tends to beat consensus, but a few anti-consensus plays he thinks the fed will not be as aggressive as everybody think, forced to pull back, bumps on the road and i think that's a

very good anti-consensus call and makes sense to me. >> bob pisani, thank you. >> good to have you here on set. >> great. >> still to come, we will take a closer look at the financials rallying post-fed with names like goldman, jpm, citi in the green today. more "squawk on the street" still ahead with the s&p at 4716.

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this resurgence of covid-19 cases and the fast spreading omicron variant starting to hit businesses from apple, temporarily closing three stores, delaying their return to office now this morning citi reportedly telling new york and new jersey employees they can work from home over the holidays if they want let's bring in ceo bess friedman always good to take your temperature regarding these restrictions good to see you. >> nice to see you, carl good morning how is everything? are you doing okay >> we think so, although you can't ignore what's happened to broadway the last couple nights

and nyu moving classes away from the classroom. we mentioned apple and citi. what sdmooung is this something where we can sort of take our lesson from the delta variant, we're going to burn through it perhaps in a couple months or more sinister than that? >> i don't know. i mean, we had a holiday planned, it was supposed to be last night, and we had to cancel it because of what's going on and, you know, i have a cousin who is a nurse in one of the new york city hospitals and she called me the other day very upset and she said, you know, i don't know what's going on, but i have so many people that are coming in very sick and the ones that are very sick have not been vaccinated and she said, dealing with this during the pandemic when we didn't have a vaccine was one thing because we didn't have it, but now we do and so the strain on the health care community is a lot. i think that's the concern businesses are just right now being smart and wearing masks and making sure people are vaccinated, but i'm a little bit

more optimistic. i don't think we're going into any kind of a shutdown i think we just have to be careful. i hope people are going to continue to get vaccinated and be safe. people are traveling for the holidays, carl i'm going away i know a lot of people are i just would encourage people to get vaccinated and be safe >> it so happens this morning we got some occupancy level readings on hotelsin new york city 81.5 is the highest weekly level of any u.s. market it does feel like at least manhattan was starting to catch a head of steam. >> yeah. there is exuberance in manhattan. i live here. i can tell you people are out. try being in a car in manhattan and getting around, it's impossible, which is why i take the subway because it's packed and people are out, restaurants are full i think this is a very good sign it's telling that people want to be here. people are excited also about 2022 because we have a new

mayor, a new governor, governor hochul, and eric adams and governor hochul are friends and want to work together. city and state are in a good place. it's not like "war of the roses" but unity and working together we had a little bit of that where people were not getting along, and having a good relationship is crucial to the quality of life for new york city we're going to have good stuff happening in 2022. infinite possibilities >> it's morgue what does that mean for housing? we got a fed tapering, mortgage backed securities faster than previously planned starting to see signs we've had gang buster increases in home prices and rental prices and maybe that's starting to slow down a little bit too with the prospect of rising rates what does that mean from your stand point, whether it is in a big market like new york city or the suburbs in 2022? >> well, i think, you know, we have seen that the housing

market was incredible in 2021. that's a fact. all over the country, millennials are at an all-time high of buying i think they comprised 70% of first-time home buyers, focusing on home buying versus experiences, which is a good thing. i think the issue for us moving into the new year is going to be supply supply is shrinking. new york city we still have ample supply, but other places like connecticut and balm peach there's a lack of supply rates are going to go up the fed announced that that's going to happen, and that's going to have an impact covid is still something that impacts us, and those are the unknowns we know this, people believe in the home buying process. they want to have a home it's important to them and we've seen that in 2021 and i think you're going to continue to see that in '22 i think it is going to be a little bit like the roaring '20s the bonuses were the biggest they've been since before

lehman borders are open it's incredible what's going to be for 2022 in my opinion. >> yeah. we're getting reports of bonuses awfully large increases year on year we'll see what happens bess, we'll check in with you soon good to see you again. >> thanks, carl. you too, take care, be well. thank you. >> still to come still to come on she show, we'll talk to the ceo of sony pictures one of the biggest films of the year "spiderman no way home" hits theatershiween ts ekd. of course that starts in the next hour. don't go anywhere. s so good to . good to see all of you, yeah! why is jerry so... popular? it's been like this ever since we started using workday. what do you mean? it makes it easier to develop great relationships with our suppliers. now everyone, everywhere loves jerry. they sure do. they do. they really do. mmhmm. workday. finance, hr, planning and spend management for a changing world.

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♪ time for our etf spotlight looking at communications services today ticker xlc up double digits on the year boosted by metta platforms and alphabet but watch at&t morgan stanley today finally an upgrade going to overweight, saying a recent slide by the stock creates an attractive risk/reward profile. name of course is down 20% for the year, but they argue lots of catalysts in the year ahead. we regained some steam here. dow sup 245. stay with us

welcome back financials rallying this morning as the fed announces a faster taper. let's bring in mike nicholas, oak fund portfolio management to discuss. let's start with financials because we had pretty strong

rund obviously have a fed that pivoted in monetary policy to much tighter stance come 2022. does the run continue? >> you know, we think very much long term at oakmark given that approach, we always valued our financial holtings on more normalized or mid-cycle basis. and embedded with that normalization is the assumption that nominal rates will be higher than the ultra low rates we see today we certainly would expect rising rate environment to be a net positive for the profit margins and growth rates of our banks. we think the financials we own are inexpensive today. >> so let's talk some of those specific names you do own. what do you like here and why? >> wells fargo is a name we like today in financials. there's some company-specific factors that really unrelated to interest rates that will also be

important you know, drivers of future business value, reduction in their highly bloated cost structure more pure average level. when you look at wells fargo, the stock trades around $45 a share. normalized earnings could exceed $5 a share you're paying slightly more than nine times normal eps for one of the best and most scaled banking franchises in america. you know, direct pure straight for healthy premiums despite our view that their returns on tangible common equity should be about equivalent >> yeah. pfizer is a name that m kos up in conversation, too. >> it is buy serve is one of the largest payment solutions providers to merchants and financial institutions about 40% of the company's revenue comes from its merchant acquiring segment, but seemingly 100% of the market's focus is fixated on that division given some fears about competitive encroachment from faster growing and newer payments companies

now with buy serve you wouldn't know from the stock chart, it continued to perform quite well in the face of the heightened competition and it's organic growth rate is accelerated relative to historical levels. we expect the business to generate over $7 of earnings in a couple of years and the stock trade slightly north of $100 a year we just think the company is much healthier than it's multiple would suggest we think assets like clover, which is their merchant acquiring solution for small, medium-sized businesses is just not receiving the same credit a stand alone peers. >> mike nicholas, thanks for joining us today. >> thanks for having me, morgan. just a quick check on the markets before we wrap up the show here. really mixed picture with the nasdaq and nasdaq 100 both lower today. s&p, 4717 is the level and the dow is back up from we saw gains

a bit earlier today but back up 223 points after the bell, you have fedex and rivian we'll keep an eye on those names for those results as well. that's going to do it for us here on "squawk on the street. "techcheck" starts now ♪ good thursday morning. welcome to "techcheck" i'm carl quintanilla with jon fortt and julia boorstin today it has been a volatile 24 hours. the nasdaq rallies more than 2% yesterday, down again this morning. we got two members of the paypal mafia to talk about why it's been such a two months for tech even as broader indexes remain near record hies adobe falling shortly. what cloud and