of that stadium. >> oh, yeah. >> i think it is a stock going higher it was a great game, right it was outstanding it was i tell you what, i like the fact we've seen a lot of option activity of late in the stock. i think it goes higher >> going for it like five times on fourth down that was interesting i like the move. thank you. "the exchange" begins now ♪ scott, i like any stock with a ticker symbol l.i.t., lit. i'm tyler mathison welcome to it is i'm in for kelly evans this day. here is what is ahead. the worry trade between inflation and covid. the market's dealing with a lot of moving pieces today the vix higher we look at why ai, big data and cyber could be good best right now. plus the safety trade. staples having a great month and they're well positioned to ride out inflation, but not all of them are created equal explore that, the names that could see the biggest gains from here and the semi trade, testing the waters and more than a meme

stock. that's all ahead in "rapid fire." we begin with the markets and seema mody with the numbers. >> three hours left in trade, good afternoon we are looking at the dow and s&p 500 pulling back, but off the worst levels of the day. the nasdaq back above 15,000, and just for some perspective the dow is just down around 3% from its all-time high taking a look at what stocks are leading us lower, goldman sachs is the worst performing dow stock right now, down just about, let's see, here we go, 4% as you can see there continues to be, right, this discussion around the fed's hawkish pivot, what it means for the banks. wells fargo, morgan stanley, jpmorgan down around 2% to 3%. what is working interestingly enough the stay-at-home trade. zoom, peloton, gaim me stock all higher after a bruising week and year they seem to be seeing a bit of a rebound. gamestop up 8% on that note, amc spiking 20%

today. we will hit the stock in "rapid fire" but a big comeback in this name market still on pace to end the week lower it is highly concentrated in technology names like microsoft on pace for the worst week since october of 2020 microsoft down 6%. adobe down 15% this week nvidia lower by 7% ty, back to you. >> seema, see you shortly. thanks very much to fed governor chris waller speaking at an event in new york steve liesman joins us with the headlines. hey, steve >> good afternoon, tyler fed governor chris waller saying inflation is alarmingly high, persistent and has broadened some hawkish comments from the newest fed governor. he says an increase in the funds rate will be warranted shortly after asset purchases end. they end in february, early march. it does open the way from his opinion for a march rate hike. the omicron variant is a big uncertainty in the fed outlook, could go either way, more inflationary or more declines in

demand he still expects inflation to moderate next year but he is closely watching inflation expectations on the economy he says it will continue to grow very strongly through the first half of 2022 he is also optimistic about the employment outlook real quick, tyler, i want to show you what is happening to the march probabilities for a fed rate hike. they've gone up. they're near about, call it 47% right now. you can see may an june are a lock for that, not a lock but strongly anticipated for that. first rate hike, start to get into calls for a second rate hike in july and the third one by december. that's where we are right now. some new development, this mari de that has sunk in and certainly waller's comments are in line with that. >> it seems like a more aggressive stance. let me ask you a hypothetical that is kind of maybe a little bit off point. what if the fed on wednesday had said, we're just going to stop buying bonds right now, the hell with taper, we are going to stop, what would the market reaction have been

is there an argument for having done that? >> there is, tyler, and i think the question that i asked of the chair was kind of in line with that, which is, hey, you are talking about inflation being such a big problem, you are continuing to buy bonds. >> yes >> you're going to buy them for the next several months. why are you doing that he said, well, basically we don't want the markets to freak out. that was my paraphrase of fed chair powell's much longer and coded response but that was the gist of what he said it is really true, avoiding a temper tantrum he's still trying to make that happen there's a legitimate question, tyler. what does the fed want rates to do here? it may be that it really wants rates to rise to tighten financial conditions, to start to get hold of the economy and inflation. but yields have gone nothing but straight down since the fed started talking. they're actually lower today i think what is happening, tyler, you led the show with this conversation, which is this battle in the markets between the weakness of omicron and the fed which is going to be

tightening, but it looks like the concern over omicron is certainly dominating in the debate in the bond market right now. >> i think that's what we're going to hear more about these next couple of hours, steve, by the way, about omicron and how central it is to the economic thesis steve, thanks very much. >> yeah. >> appreciate it have a great weekend >> have a great weekend. whipsaw day for the markets as investors do weigh two key worries, inflation on the one hand, covid on the other but our next guest says you can't sit on the sidelines during the follow violate because yields on cash are negative and a market high does not mean a market top. joining us now, emily ruben, financial advisor at ubs global wealth management. emily, good to see you you heard the fed governor there saying that interest rates are likely to go up a few times. you think it is unlikely that the fed raises rates in the first quarter. >> yes, we actually think that the fed -- they're unlikely to take an aggressive inflation-fighting stance right away we expect them to want to see how the economy looks as the

pandemic continues, hopefully subsides, and also to see what it looks like after the taper is complete, which is now expected to be mid-march. so, you know, we are not expecting an increase in q1, but certainly as we get closer to the second half of the year. the market is already pricing in four rate increases. it seems like it was originally may, it seems like it may be ending a little earlier, closer to march at this point but the fact that the market already has that priced in, we feel like it will help mute some of the market reaction if the fed does make further announcements. >> you know, there are lots of interesting things in my notes that you told our producers. one was that a market high does not mean a market top. i get that i think you're also in the camp that says right now cash is trash. but if i'm leery of where the market is, should i continue to invest at these market highs, albeit not market stops? should i continue to invest at market highs and was does history tell us

about the returns i might expect if i do invest at market highs >> absolutely. i mean as you said, a market high is not a peak a peak implies there's going to be a big decline a market high is much, much more common if you actually look back at data since 1945, the s&p closed at a monthly -- at an all-time high nearly one-third of the time so that's pretty frequent. investors who put their money in at those highs, more than 60% of them never saw a decline from the starting point of more than 5% so it shouldn't be scary to put your money in at a high, but i understand where people are coming from. we have a lot of entrepreneur clients who have recent liquidity. they have a lot of risk in their business and they want to be more cautious in their investment approach. nobody wants to be the person that puts all of their money in a market high and then we have march 2020 dinging us. >> it has to be -- i'm sorry finish your thought, emily >> you have to be a little more

cautious and think about how you are going to go in it may be more of a psychological decision than a financial one. >> maybe -- i want to get to areas where you think i might sort of splooiice in some money. before i do that, maybe i misread my notes, you are not a full-throated backer of dollar cost averaging, did i get it right? >> no, you are absolutely right. history will tell you dollar class averaging doesn't work. going in as a lump sum outperforms 80% of the time and it makes siense because the market goes up more than declines over time if you do price average, it is a great way to tip into the market and go in slowly it is more of a psychological decision history doesn't show you that it will have the best financial outcome. we want our clients to speak well at night. it is not about -- >> for that entrepreneur you just mentioned who had a liquidity event, they sold their

business, you would counsel them if they have, say, $10 million to put to work, you would say go, put it in now all at once? >> well, i think you have to take into account, i don't want to be the one asking they put it all in at once either. history will say that they should, but, again, you have to be a bit more cautious if you have your life savings, you have just worked and sold your company, you want to be a bit more cautious in your approach and go in a bit more slowly but, you know, it is a trade-off between likely financial returns and, you know, being able to sleep. >> we're going to talk a little covid in just a minute i'm running out of time, but i note that you think that the first half will favor high growth, high inflation, good for cyclicals, financials, energy, global eurozone, and the second half look for health care a bit more defensive as the economy slows. did i get that right >> absolutely. and investors tend to be very underweight all of those areas

after a whole decade of u.s. large cap growth stocks being the best performers. we think it is a great time to diversify your portfolio >> emily, thanks interesting points of view we appreciate it emily ruben. >> thank you very much the number of covid cases rising rapidly in some cases rochelle wilensky saying the omicron variant is spreading quickly and the agency expects it to become the dominant strain in the united states in coming weeks. meg tirrell is here with the latest hey, meg >> hey, tyler. of course, a big push for folks eligible to get boosters in the face of omicron. anybody not vaccinated, a big push for them to get their first shot meanwhile, we have an update from pfizer today on a group that hasn't yet had access to the vaccine, kids under 5. pfizer now saying it is going to test three doses for all kids, those under 5 and those up to age 17 specifically though, we have been waiting for data on kids under 5, expected by the end of

the year pfizer said today two low doses in ages 2 to 4 didn't meet the goal of a strong immune response that matches what we saw with the higher dose for kids and young adults, 16 to 25 so they're going to add a third dose there for kids under 5 as well as for those older age groups in the face of variants of concern like omicron and even delta. they say if the three-dose regimen looks good they could file with the fda for ages 6 months to 5 years in the first half of 2022 we are waiting to see if that's really a big delay from what we've been expecting it does seem like it is slightly pushed back, at least from some hopes or expectations of parents. they also increased their forecast for the vaccine for next year, $31 billion now expected in 2022 that's up from a previous forecast of $29 billion, and it is based on more orders set to be delivered next year pfizer also laying out kind of how it sees the pandemic playing out globally over the next few years. it calls 2022 still a pandemic year 2023, a hybrid year, and perhaps

reaching that endemic state in 2024 of course, lots of variables go into that and they say it could be different in different regions around the globe based on vaccine access, et cetera but that's a little slower reaching endemicity than some of us hoped, tyler. >> what a week it has been in the world of covid with omicron, with the word from the cdc on johnson & johnson's vaccine. meg, you have been at the center of it. thanks very much appreciate it. let's stick with health care, the sector seeing nice gains over the past months, up 3%, outperforming the tech sector which is down half a percent by comparison. while the tech trade is falling apart, my next guest says it is tech within health care that is the big innovation play of 2022. rickie goldwasser is morgan stanley's head of health care research and technology research nice to have you with us >> great to be here. >> nice some see you explain the thesis that favors health care right now? i mean we kind of just did with omicron and covid. there's a lot of people that

will need a lot of health care, but explain why. >> so when we think about health care and transformation from within thesis, moving up a ticker, so adding frontage to capabilities to connect with consumers and -- bit of risk is really prerequisite for success. we've seen the health care system going through major transformations in the last 18 months because of the pandemic, or at least -- have done it -- of the pandemic, that we think are going to accelerate the transformation i often get from investors a question of why now. we have been talking about tech disruption, transformation for such a long time so what makes now the right time we think it is a combination of a few factors. first of all, you know, the threat of big tech disruption forced large health care enterprises to rethink old models and to move forward with innovation second of all, then comes a pandemic and accelerated the shift by changing how we

interact with the health care system, the type of access and the level of access. it also helps providers feel a lot more comfortable with using technology, using telehealth to interact and provide care. then thirdly, as a system we are moving to value-based care what value-based care is, it is a model that is about taking risk that has really meaningful implications to take risk we need data and we need really good data, and that's where we see the step up in the push to integrate data and manage data just to deliver better outcomes. >> some of your large cap buys sound like those companies that you just described, in other words large, incumbent companies that are going to benefit from medical technology for example, cvs health, united health, anthem, mckesson, these are big, big companies and they're not -- i don't think of them as med tech companies at

all but they may be beneficiaries of med technology, right? >> when you think about innovation and technology in health care you think biotech. >> yes >> you think medical technology. we actually see this now happening in service, in health care services. five years from now we will call them serve techs but for now we think about health services, we think about the platforms, we are starting to see large companies like united, like cvs that have this scale and are looking to create a marketplace, a health care marketplace where they can integrate for solutions. so we think this disruption or transformation from within is going to be a partnership between these large platforms that have access to members and the small, smaller innovator companies, whether on the private side we are seeing a lot of funding from venture and private equity, or companies that already went public so it is really that combination, but we think that

ultimately the ones with the deeper pockets and the access to members are going to be sort of the long-term sustainable winners. >> let me ask you a final question among your large cap buys we just mentioned cvs health, but downgraded to sell underway, wall green's, boots, alliance i think of them as direct competitors. why one and not the other? >> so our top pick is cvs. when we think about cvs, cvs fits multiple themes that we like first of all, they're innovating their new business model so you say i think about cvs as i think about walgreen's retail, cvs is a lot more than drug retail they're innovating that business model. they are using the drug retail side, the cvs brand iconic activity with consumer, that using that to build the health care marketplace they have an 18c suite that understands health care. karen and sean steele, cfo, have

come from aetna. they come from a type of mindset, so they made some really hard decisions. they basically said we have too many pharmacies. 10,000 pharmacies are more than the system can support they're cutting the footprint by 10%. >> right, right. >> they're highing ring people h digital and technology capabilities, and they provided this where it is very clear with earnings for target and we see upside target. walgreen's on the other hand is still focused on the traditional retail model they're not downsizing the number of stores, and we think longer term that means lower returns. they are investing a lot in health care but not in health care integration they're buying a health care assets they're telling us that five years from now it is going to account for the majority of the growth, but the management team lacks that health care expertise that we think is critical.

>> right ricky, thank you very much great answer we appreciate it have a great answer. >> you too thank you. >> fantastic coming up, a december to remember for the staples not may havis staples. the sector's best in 30 years and outperforming all others this month we will tell you what is behind the flight to safety and give you names you may want to consider for 2022. plus, is it time to buy the dip in the chips why jpmorgan is calling chip makers a good play and mcdonald's a safety play can spiderman prove that amc is more than a meme stock my son saw it last night, said it was fantastic "the exchange" is back after this this is "the exchange" on cnbc thanks for coming. now when it comes to a financial plan this broker is your man. let's open your binders to page 188... uh carl, are there different planning options in here?

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♪ welcome back, everybody. consumer staples, the top performing s&p sector so far this month, up 8%, on pace for the best month in over two decades. hormel, conagra, coca-cola, top performers in december, up more than 10% with coca-cola hitting a 52-week high today so are staples the place to be heading into the new year? let's hear from nick modi with rbc capital. are they the place to be, nick or assume they wouldn't be here. >> thanks for having me.

i think you have to be choosy in terms of which stocks you pick certainly the market dynamics favored staples for the past few weeks, but year-to-date the sector has massively underperformed you know, it is kind of -- it depends on the mood of the market, you know, when people are less worried about the variant and interest rates the staples sector underperforms when they're worried, which certainly we've been in the more worried zone the last few weeks. the way we think about stock picking is how can we fundamentally pick the names that will perform well despite what is going on in the macro environment? that's really how we have constructed our top ideas list for 2022 >> i want to get to coca-cola, which pete najarian mentioned at the end of the last hour, we will get there in a second how are the companies dealing with rising input costs, materials cost, ingredients? >> look, all have taken pricing. i think i was on the show, you know, a few months ago talking about not every company is built the same some companies have more pricing

power than others, and that's certainly a key factor going into how we're picking stocks. but every company that i cover, all 31 of them, have taken price increases, some have taken two to three rounds of price increases. i would expect that would continue in early 2022 >> you like coca-cola. you say you are removing mondalise, it is not that you necessarily dislike them, it is just that you like coke better why? >> it was one of our top ideas for 2021, the stock performed reasonably well, but coke, we think there are two things that will really manifest in better performance. one is we do believe, despite some of the concerns of omicron, we do believe mobility will continue to improve as we move through 2022 over half of coke's business comes from away-from-home channels i think they will benefit from that the second is coke has done a restructuring which really realigned how they make decisions within the company which we think is going to materialize into better top-line performance moving into 2022 as

well >> what do you see for inflation and the market in 2022 broadly speaking >> yeah, look, staples stocks don't actually perform well when inflation is a problem on the other hand, when rates go up aggressively, staples tend to do better because the market gets more defensive. so we have a kind of bipolar tension on the entire sector, which is why we are trying to be very stock specific in terms of how we think about the sector. >> nik, thank you very much. have a great weekend, sir. >> same to you >> appreciate it as always still ahead, gm begins shipping its all-electric hummer to customers we will go under the hood and tell you why the automaker is so confident it can smoke the competition. we will be right back.

♪ welcome back to "the exchange," everybody markets right now, let's take a look there the industrials down 390 points. that's off the lows. s&p kind of flattish, about half a point lower. the nasdaq again hovering around the flat line today. health care, the best performing sector this week, up 3%. energy, the biggest laggard, down 4% since monday, though still the leader year-to-date with a 44% gain. here are some of the movers this hour teladoc surging after citi named it a top pick. the stock still down 67% from its all-time high. that was back in february. although the firm says much of the recent sell-off is tied to increased competition in the space, which it believes teladoc can survive. the number four holding in cathie woods' ark innovation etf, fighting to stay in positive territory for the week. the etf ticker, ark, is 40% off

the recent high, set to end the year lower for the first time since 2016 take a look at shares of nikola, nearing session highs, announcing it delivered its first tray battery maybe it is tre battery, electric truck, to total transportation services. the company said earlier this year it was committed to making the first delivery in this hour. now to contessa brewer for a cnbc news update how there. >> hi there. the traffic top quote went chaotic. that's how former police officer kim potter described events leading to her fatal shooting of daunte wright. she is testifying right now. on the news, full analysis of her testimony and what prosecutors may ask her tonight at 7:00 eastern. harvard is putting on hold its standardized test requirements for another four years. applicants will not need to submit s.a.t. or a.c.t. scores until at least 2026. for next year's class, more than

half of all u.s. colleges and universities made those tests optional president biden is giving the commencement address at south carolina state university. a special against joined in, house majority whip jim clyburn graduated from the school 60 years ago. back then, of course, there weren't december graduation ceremonies, so clyburn got his diploma in the mail. today clyburn joined the graduating class to walk across the stage and receive a diploma in person from president biden very belated congratulations tyler. >> but a nice honor nonetheless. see you in about half an hour on "power lunch" contessa >> okay. coming up, the semi trade, what is ahead for crews stocks, why mcdonald's is a top safety play and why amc may be more than just a meme st. johns episcopal cathedral. that's still ahead speaking of amc as we head to break, look at other memers today. gamestop, bed, bath and beyond,

blacer, l vikbryalmong higher and by a lot we are back after this

♪ ♪ cases of anxiety in young adults are rising as experts warn of the effects on well-being caused by the pandemic. ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪

earn about covid-19, ♪ ♪ the more questions we have. the biggest question now, what's next? what will covid bring in six months, a year? if you're feeling anxious about the future, you're not alone. calhope offers free covid-19 emotional support. call 833-317-4673, or live chat at calhope.org today. ♪ all righty let's catch up on a few stocks and stories that should be on your radar it is time for "rapid fire." here to break it down for us,

seema mody, tim seymour of asset management, cio there, fast money trader, gina sanchez, cnbc contributor. first topic is semi stocks they have been selling off as analysts expect chip shortages to continues next year all down about 4.5% in the past two days i want to stop talking in a little bit and get it over to tim seymour. can the market move higher if the semis don't and which do you like >> yeah, i don't think so, ty. first of all, great to see you i think semis have been the key chart for the market in good times and bad. they've underperformed the s&p by about 5% in the last 12 sessions, but have outperformed the s&p by 43% over the last couple of years and have outperformed big cap tech. we know how important. look, nvidia has been a monster and their last round of numbers showed you how important data

center up 55%, some of the other ev, ai, gaming dynamics of their business the problem with nvidia is it is a high-multiple stock at a time the market is punishing high-multiple stocks i think taiwan semis is one of the underrated/overrated players. everybody knows how big and powerful they are, but at 25 times, two-thirds oftheir business is leading edge technology, they have pricing power, and i think they will be less cyclical than other players. i think semis, critical to the market may be choppy, but, you know, they are absolutely today's story. >> did you pick a semi stock in the stock draft, do you happen to recall? >> i don't know why you are bringing up difficult, you know, memories and issues for me i don't think i was anywhere near these names and i think i have a couple that have been dogs let's leave it at that i will see you in april. >> we have a lot of time left. gina is smiling, loving this so is seema. jpmorgan is loving it, naming mcdonald's a top safety pick

heading into the new year. the firm saying the u.s. business is thriving golden arches should keep serving up gains mcdonald's shares up about 20% on the year. they've also, seema, apparently got a promotion coming where it is the mariah carey 12 days of christmas free meals if you buy a dollar's worth on the mobile device on december 13th, you can get a free big mac. mcchicken on the 14th. today you get a cheeseburger would you go for this? is this a reason to go to mcdonald's for you >> i think, listen, promotions, any type of deal is a way to attract consumers. i like their crispy sandwich which now comes with a free medium fries and soft drink. that's enough, maybe in a market where we are dealing with inflation, economists expect inflation to rise further, and strong demand allowed industry

titans like mcdonald's to continue to raise prices i guess the question is how much longer, especially if the cost of the burger or that chicken sandwich is going to cost more going into february or march of next year. >> gina, what do you think here? i am told we had prior gambits like this, the sweetie meal, the bts meals. i'm old but not that old i know who sweetie is. travis scott do you like mcdonald's as a stock? >> i think from a stock perspective it is a dividend payer, and that going into inflation is probably a good way to sort of insulate your portfolio. so from a dividend perspective it is a great stock to own from an inflation perspective, mcdonald's is at the cheap end of food generally, so they will continue to have demand. >> mcdonald's is at the cheap end of food. i think no truer words have ever been spoken on this program. tim seymour. >> well, look, i think the unit growths -- i will leave aside the quality of the menu.

i will say mcdonald's is hip again, not only because of their music, you know, branding celebrity sponsorships, but because of what they've done to the menu, the kiosks, the loyalty program. i think the key to the stock really is the unit growth. they're growing after cutting back in-store closures seven or so years in a row. they are geographically positioning new stores and will be growing 5% to 10% over the next couple of years >> i hate to be a curmudgeon but i don't love the mariah carey christmas song it gets in my head it just doesn't go away. >> come on >> i don't know. next up, carnival creuise lines set to report before the bell on monday the stock has gotten crushed since news of the omicron variant broke last month, posting near double digit losses alongside royal caribbean and norwegian. will rising cases and hospitalizations spell more cancellations and slowdowns in booking?

what are you hearing, seema? >> here we go again. last quarter carnival unveiled eye-popping targets and said it would be able to break even by early 2022 and bring 65% of its ships back to sea by end of this year the big question on monday will be to what degree are those timelines shifting because of omicron. it also raises just a more existential question, tyler, around travel. if a new variant is going to pop up every three to four months, how does it impact travel? increase in cancellations, customers rebooking, i think that's the big question going forward. because this familiar timeline is something we are now starting to see one silver lining, price line just unveiled travel prices for the first quarter are actually up for hotels by 18% compared to the same time last year. that tells me that the pent-up demand is still there. they may not be rebooking a trip for this week but they're booking it for the first quarter of next year >> how about carnival, tim maybe it takes some courage to jump in when things are bad, but maybe it is the right thing to

do >> the wrong thing to do ismak fun of mariah carey, by the way. the right thing to do with carnival is to be tactical going into the numbers i think first of all, we forget with covid stocks that we're certainly in the tornado you make the most money when things go from terrible to just bad, and that was carnival, that is still up 130% yet down near the bottom of its range. the key is i don't think they're going to give you the kind of guidance the market wants in terms of the financial outlook i think break even in terms of free cash flow by third quarter. longer term, by '23 they will be plus 15% to their ebitda of pre-pandemic that's the key it is not the same balance sheet, but on a medium term i think it is a great call tactically into monday i think investors will make money on the trade. >> gina, quick carnival thought, either on carnival or mariah carey? >> i will pass on mariah carey on carnival, i think the broad

story is we have to learn to live with variants i don't think it is going away as we continue to have testing and treatment availability, all of those things are becoming more broadly available si, companies like carnival will get back to pre-pandemic highs >> let's go to amc, shares jumping thanks to your neighborhood ""spider-man"." my son saw it, says it was packed last night, the highest grossing opening night in december in its history. more than a million americans watched the movie at an amc, the highest number in two years. gina, is it more than a meme >> well, there's certainly a reopening frenzy to go back to the movie theater, but the business model generally is still challenged you know, you look at sort of what is happening with, you know, streaming, what disney was able to do with their launches, with their new movies during the pandemic, really paved the way for a changing industry. so i think you have to watch the

industry trends. but, look, i'm doing my part i am going to see "house of gucci" tonight >> good for you. tim, how about you on the one hand you have this apparent blockbuster in "spider-man", you have "house of gucci" for gina, but you also have omicron >> look, is this a movie theater company again? so it actually -- that's what they do, i get it. so pre-pandemic, $720 million was their top line are you telling me that suddenly their story is better because they have a blockbuster release? we know what is going on here. this is a meme stock this has been kamikaze investing. you have 16% short interest. i think the only thing to save the business is getting mariah carey to do individual live shows around some of the theaters otherwise, you know, i just don't see why we're trying to think of this company as

something different than it is >> yeah. >> yet on the day we're actually touting movie sales, we have to be reminded that this is a dying business >> yes, but the stock is still up 1,300% this year. that tells you something >> we have to leave it there maybe for mariah it is the santa's helper costume i can't get past see youlater, guys thank you, appreciate it tim, gina, seema to steve liesman for more headlines from fed governor chris wall >> tyler, thanks very much some more hawkish commentary he said outright, i mean he was hinting before but he said march is a live meeting for the first rate hike. there's been some confusion in markets as to whether or not that would meet the criteria since qe ends in march, but, no, waller saying it is a live meeting as far as he is concerned for a rate hike, though data dependent. also said the fed should start reducing the balance meet within a meeting or two of lift-off, a/k/a the first rate hike.

degree aggressive based on what others have said about it. powell said we're just talking about it now waller said a balance sheet of 20% gdp would be reasonable compared to the current of 35% would be quite a reduction he said the market does not need the current amount of reserves out there so the fed can take away easily. causing a good jump in the two-year note as you can see, also in the ten-year, that idea. also a big jump in the march probability of a rate hike, it had been 47% we talked about that earlier now 55%. now more than an even chance according to the market based on waller's recent comments that the fed does do that first hike in march it continues to be interesting, tyler, doesn't it? >> steve, thank you very much. steve liesman. coming up, fast cars and fast casual with rivian shares sinking to a new low after cutting production goals gm is getting its newest electric cars on the road, and a rare bright spot in the casual dining space still ahead on "the

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♪ welcome back, everybody. it has been a bit of a would bely day for the markets, all three major averages swinging between gains and losses there is one bright spot and that is fedex, the stock moving higher following earnings after a year where it saw lots of peaks and valleys. to frank holland with more hey, frank >> hey there, tyler. you know, fedex shares up 5% right now, on pace for the best day since may after strong earnings beat on the top line profit analysts say there are two things moving the stock today. first, the company raised the full-year guidance after lower that full-year guidance earlier this year after citing some inefficiencies in its network and a labor demand problem right there. the second reason is it launched a $5 billion share repurchase program and a $1.5 billion accelerated share repurchase remember, shares are down 4%

year-to-date one other factor, fedex coo citing continued pricing power as fedex reups contracts fedex also has a surcharge structure for big retail customers during the holidays based on increases over pre-pandemic volume. spoke to web bush's dan ives he says esg funds are eyeing or adding fedex because it received delivery of the electric trucks from gm's ev unit. sh shares are up 5%, on pace for the best day since may >> i came face-to-face with the pricing power when i tried to ship something the other day general motors started delivering the first all-electric hummer today as they make a push into evs, but gm shares under pressure thanks in part to a c suite shake-up. esennem e ar frothgm pridt xt

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this is where the first hummer rolled off the line and has already been delivered they made their deadline of delivering hummers before the end of the year. this is the first ev from general motors built on its new ultium battery platform. this is the beginning what have is going to be a rampup of ev sales for the next several years for the u.s. auto industry look at the projection more than 2 million projected annually by 2025 by the way, evs are going to be about 4.5% of the market in terms of sales next year according to gm's president. whether or not we get extra ev incentives from the biden build back better plan is unclear, but the president of sales says they are proceeding even if those

incentives don't go through. >> both on a volume and affordable basis for everybody that plan is very much dependent on that. it is an accelerant. that's the way to look at it. >> look at shares of general motors they also have the e sill raddo they will unveil early next year and a slew of vehicles that will be unveiled or product starting or they start to roll into dealerships. this is the beginning of what we are going the see over the next couple of years from gm and a number of other automakers more evs coming to market. shares of darden slumping today as they announce its ceo is stepping down next year we will discuss that and whether omicron will derail the covid recovery with darden's ceo next.

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darden restaurants, the owner of brands like the olive garden, capital grill reporting better than expected earnings despite strong comps and raised guidance, shares down on the news that ceo eugene lee will retire in may. on top of that the broader industry has to navigate omicron fears and inflation pressures. joining us now to discuss, the former darden restaurants ceo clarence otis. good to see you, sir welcome back. >> good to see you, tyler. >> you are still on the inside and know what's going on we referenced the departure of the current ceo next spring and stock is seemingly suffering a little bit today was this all planned and the successor is a longtime member of the team there >> yes, there was planned. about a year ago, darden

announced that rick car dean yas would prove up to president and chief operating officer. that's a role, typically, where you are being groomed to be ceo. the expectation was that rick would take over. that's exactly the same thing that happened in the transition from myself to gene lee. gene was elevated to chief operating officer first. that is very planful rick is an extraordinarily capable leader as you mentioned, a longtime darden employee? let's talk a little bit about the head winds that face all restaurant companies right now, and it's on the one hand input costs, including labor, including food costs, and on the other hand, the potential resurgence of covid as a depressant on customers. >> sure. and i would say on the input cost side, labor and then food and other related commodities,

these very important when you look at those two groups of costs, they amount to 60 to 75% of the restaurant operating costs. so significant but they are very different. pressure on the labor side is often actually welcomed by restaurant operators because that means their customers also have more money to spend so they are able to really adjust on that side of the equation when i look at labor, what i think we are seeing is really a resetting of the base. and so very significant labor increases. those were under way prior to the pandemic one of the factors, for sure, is the state mandates around minimum wage many new ones kicking in the second and third year of existing mandates kicking in we are going to see that resetting of the base even without the pandemic and i think once we get past that, we'll see a moderation in labor inflation.

but in the meantime, because consumers are so much better off, we do see increased volumes. those have certainly been dampened by the pandemic, but ultimately, consumers having great balance sheets, getting wage increases that are meaningful is good for volumes volumes mean operating leverage that works for the restaurants and helps them maintain margins. >> less than a minute now, mr. owe it the give us a thought on how worrisome covid still is. >> i think it continues to be something that we have to worry about. but i think the experience that we have seen over the past two years really serves restaurants well, so they know how to adapt in terms of safety protocols making sure employees are safe, that customers are comfortable, and they know how to pivot to offpremises. and they have demonstrate that the best operators have done a good job building that business.

and so i think they can handling an uptick. >> yeah. thank that's an interesting point. in other words, now they have a playbook they have experience they have some history with doing this and they can pivot more easily to a hybrid kind of delivery method. mr. otis, thank you very much, we appreciate your time today. >> thank you all right that does it for "the exchange. "power lunch" with contessa start right now. hi, contessa. >> hello there, tyler. and welcome, everybody, to "power lunch," i'm contessa brewer with tyler mathisen ites nice to be here hang on tyke, market volatility is back. our market expert says this hour the best way to navigate it is diversify away from the s&p. crude oil could hit a record next year, we will speak to an analyst behind the report that says it could reach $100 a