i want chris and his company to do what it does best, which is design, market, and manufacture. i think, literally, there could be thousands of these made a year. they did $5 million last year. this business should do $25 million in the next 12 months. ♪♪ global headquarters, and here's your top five at 5:00. global equity markets under pressure as covid case counts, omicron, and the possibility of new nationwide lockdowns weigh now in china, the country's central bank does something for the first time since the start of the pandemic, sending shares their lower as well. back on the home front, technology hit harder on the pre-market as nasdaq futures ssi sink ahead of the opening bell.

oil also marking a sharp demand lower headed into the new year. and goldman sachs taking its outlooks for the u.s. growth down a peg as president biden's build back better agenda at the moment looks dead in the water it's monday, december 20, 2021, and you are watching "worldwide exchange" right here on cnbc good morning, i am dominic chu in for brian sullivan today. kicking off your monday morning with u.s. stock futures right now very in the red. you can take a closer look at those technology and nasdaq futures over the past several hours but you can see the s&p 500 implied lower by roughly 9 to 10 points, the dow jones down by 70 and the nasdaq lower by 323 points technology will be the epicenter of this particular trade, at least to start the day

this morning's action coming after the dow posted the worst week in nearly a month both it and the s&p 500 losing nearly 2% over the last week it's worse for the nasdaq coming off a 3% weekly loss you can see the nasdaq 100 futures implied lower again but over the course of the last week or so, sharp moves lower there checking the treasury side of things, seeing a move in 10 year yields, just a hair lower 1.375% there, just about .6% for the two year treasury. oil is hit hard as well, extending losses in the last two hours, wti down about 4% right new, $67.94. ice brent $70.98 down there the overnight action in

asia, red across the board after china's central bank cut its benchmark lending rate for the first time since april of 2020 the moves have reverberated around down 2% for the hang seng. let's go to europe, a similar story there as markets are sharply lower on this opening trade. you can see the german dax down 2.25%. and 1.5% declines for the cac in france the story is tied to new actions by governments in the netherlands, austria, and others with new lockdowns and restrictions to stem the covid cases rising there annette joins us with more >> good morning. the german government has reinstated travel restrictions

from people coming from the uk to germany, only germans are allowed back into the country but they have to quarantine. the uk is now officially what we call a virus variant region which is triggering the toughest travel restriction there will be more travel restrictions from people coming from from france and austria so we are headed towards more restrictions domestically in germany. tomorrow there will be a high level crisis meeting of the german government and the so called corona expert council we know those experts are a advising tough restrictions on social gatherings potentially going as far as closing down restaurants and bars once again, in order to avoid the omicron, the variant spreading violently in the uk to also spread here in germany as our hospitals are

very close to full capacity already now, dominic. >> i wonder with the prospects of the new lockdowns and restrictions, is there any kind of public backlash at all? we tended to see some more pushback against the actions taken earlier, especially in europe and elsewhere any indication there's social unrest given the lockdowns >> it's not only indications, it's protests across the country. we have some 10,000 people on the streets over the weekend, protesting against corona measures and also the debate we might introduce mandatory vaccination in germany germany only has a vaccination rate of roughly 70% and that is, according to experts, far too low to get hold of the coronavirus situation also going into next year of course, those 30% of the

population are also entailing kids who can't be vaccinated yet, but there is a huge chunk of adults as well, especially in the east and especially in the south of germany who's very much against getting the jab. >> the latest there from europe. thank you for those and the lockdown measures being taken in europe we turn to a developing story on the home front as west virginia senator joe manchin said he remains opposed to president biden's build back better alice barr joins us with more. >> reporter: good morning. this came as a surprise to president biden, the progressives on capitol hill senator joe manchin the key lynch pin moderate democrat came out on fox news yesterday and said he is a no, he tried to find a way to support the bill

but at the end of the day it was something he couldn't explain to the people of west virginia so he's going to vote no. president biden put out a statement saying this is at odds with everything that senator manchin had been saying to president biden. we know they've had frequent meetings over the past several weeks, they met just this week and the president said in that meeting joe manchin said he was going to come up with a way to come to a yes on this. he's really feeling like -- the president is feeling like this came out of left field and we're hearing from progressives saying that senator manchin has betrayed all the promises he made to negotiate in good faith on this massive legislation. what's next? what's the positioning happening on both sides of the aisle with regard to how they get this -- is it even possible to get it back on track? >> reporter: isn't that the question, what's next? we're hearing from progressives

and democrats more broadly that they want to come up with something. so it's not going to be, it looks like this 1.75, up to $2 trillion sweeping agenda they were looking for but there has to be a way to reach agreement on several key provisions democrats promising to stay at the table to come up with something. it just remains to be seen what senator manchin might be willing to support we know he doesn't want paid family leave, the child tax credit, some of these large and costly over a long period programs that are in the bbb but is there a smaller scaled down version he would support, that's what everyone is waiting to see. >> thank you for that. those comments from manchin turning heads on wall street as well getting particular attention at goldman sachs. the team is cutting its u.s. growth forecast on those comments, out with a note last night says, quote, bbb no longer looks like the base case

we recently put the probability of a modified version at slightly better than even but in light of manchin's comments, the odds have clearly declined and we will remove the assumption from our forecast. now with this change, our gdp forecast for 2022, now stands at 2% in q1 versus is 3% prior. a failure to pass it would introduce some risk to our expectation that the fomc will deliver the first rate hike in march. goldman adds without build back better, the odds of new corporate tax increases are down signific significantly as well. so a mixed bag if you will let's bring in vance howard from howard capital management. vance, goldman had already cut the u.s. growth forecast for this year back in october over fears of a consumer spending slow down. what exactly does this now mean

for markets overall if on balance you might not have the tax increases we feared but the same time maybe not as much of that fiscal stimulus as we were expecting. >> the fed has been clear with this they're going to taper, raise rates next year. what's happening here is we're seeing the market sell off this morning but is it because of the gdp number that goldman wants to talk about or because of the spike of covid and inflation when you look at inflation, that's giving me more heart burn than goldman with a number on gdp and the virus spiking up is a little bit of a heart burn too. those are big headwinds. a year ago, energy prices are up 50%, a year ago food prices are up 30% that's what's giving everybody heart burn right now, i think. the trend is still up, i'd buy on the dip everything is going to go lower before it goes up in the

shortened week but you have an opportunity to pick up stocks at a cheap price. >> stay with us and bear with us for a moment we have brng breaking news from moderna the company saying a third dose boosts antibodies 37 times more than prebooster levels and it works against the omicron variant in lab tests they're developing an omicron specific booster incase it's needed but there's a market reaction moderna shares up 5 to 6% in the premarket trade and seeing an acceleration of premarket volumes now. i wonder, vance, we just had the breaking news from moderna we know that omicron fears are weighing on markets as well. do you feel as though covid is still a driving force behind the markets? >> it is right now i think they keep talking about cases are jumping up, how this virus is really spreading at a rapid rate instead of starttalking about how many cases it has, let's

talk about the severity of the omicron virus and measure that maybe more than cases. that may ease tensions going on out there. but it's really created a lot of tension with the situation i go back to inflation, omicron, that's the reason you're seeing the selloff. but now we're oversold look for opportunities here one thing i tell my people all the time, control your emotions. emotions will kill your returns. >> say emotions are killing returns. if you were to buy on this dip, what exactly is the stuff to buy? >> you know, technology has taken it on the chin this morning. i would look at iyw, the basket of technology stocks i don't think i would try to pick out any one individual stock at this point, buy the whole basket and i think you're pleased with it, 1, 2, 3, 4 months out at&t sold off to the point and the dividend is looking high right now, that's looking

strong the semiconductor index has pulled back, it was a nice break out and now it's pulled back to a level. i would look at sosx >> so chip stocks and at&t, and u.s. technology stocks in basket format vance howard, thank you very much, have a good day. >> thank you. when we come back, a sharp move lower in oil prices we dig into the why and how long ahead. when it comes to disney's latest spiderman franchise, why the l.a. times says with great power comes great profitability. the latest on delta, omicron and the about face at some of wall street's biggest banks when it comes to return to office plans. we have a busy hour ahead when "worldwide exchange" returns after this break

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welcome back to the show let's get a check on some of this morning's top corporate stories, silvana is here with those. good morning. >> good morning, happy monday. canada's bank of montreal is reportedly in talks to buy the american arm of the french bank bnp paribas.

combined the banks would have some $870 billion in assets. meanwhi mean meanwhile sensetime is revving plans for an i.p.o the company still aims to raise up to $767 million with a maximum valuation of $17 billion. unchanged from its original offering shares are expected to start trading in hong kong on december 30th. "spiderman: no way home" shattering pandemic box office records this weekend opening with an estimated $250 million of ticket sales, it was the third best opening weekend of all time, behind end game and infi infinity war. >> shocking marvel making at lot of money in movies there. >> exactly. >> i haven't seen it yet but i

want to watch it in the theatre. >> i hear it's hard to get tickets so i have to wait until it's on the streaming service. >> thank you very much for that. tiger woods make history at the pnc championship this weekend. why buy now pay later plans may start to hit your credit report and a closer look at the falling profits for home flipps. a bk tethiser age before beauty? why not both? visibly diminish wrinkled skin in... crepe corrector lotion... only from gold bond. want more from your vitamins? at nature's bounty, we give you more.

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all right. energy stocks very much in focus right now for laggard side of things in the s&p 500. let's check this morning's other top headlines outside of business and money frances rivera is in new york with the latest. good morning. >> good morning. democratic senators elizabeth warren and cory booker have tested positive for coronavirus. both have breakthrough cases of covid. the senators said they're vaccinated and have had booster shots. neither have identified which strain of the virus they have. trevor noah is suing the new york based hospital for special surgery. he claims that dr. daniel riley iii botched an undisclosed

operation in 2020. the lawsuit alleges the care noah was given was performed and rendered in a negligent and careless manner and he suffered permanent, severe and grievous injuries the hospital is calling the allegations meritless. nearly 10 months after a tragic car crash, tiger woods is back on the golf course. tiger and his son took home second this is a major huge win for tiger. i know we knew this was coming but to see him out there is amazing. and his mini-me, his son there >> charlie got more attention i think than tiger woods did that kid's swing is ridiculously awesome. the record they broke, team charlie and tiger 11 straight birdies in that format that was crazy to watch. >> across the board just great

to see, from son to tiger and maybe, maybe the start of another comeback. >> no doubt the golf world is better off with tiger in it. thank you for that. back to the markets, specifically oil it's getting crushed this morning as mounting concerns of omicron spread dims the outlook for fuel demand globally marissa, we turn to you to bring us back to a semblance of maybe reality here is the oil market as bad off as the markets at least are pricing them out to be this morning? we know they've had a huge run over the last year, but these are massive moves to the down side that we've seen as of late. >> yeah. i think you're exactly right i don't think fundamentals justify this kind of move. this is a symptom of low liquidity, very few people are around given the holiday season. a lot of people already closed their positions pretty much from

mid november after the volatility we've seen in both oil and gas. there are lots of traders who had a good year so why keep their positions open with the uncertainties around omicron and the spr release. we just had too much and the weather hasn't been cooperative either, a warm start to the winter. a lot of banks are too bullish we've been talking about that for a while. and i think if the market had bought into some of those big numbers they're having to revise those lower now with the winter we've seen so far. so lots of reasons not to be long so this is a long liquidation. dubai is very back dated, a demand that asia is still strong. >> so if that is a short-term phenomenon that will resolve itself, what exactly is, in your mind, the biggest driving force

between the oil market right now? is it on the supply side on the demand side is it omicron? what exactly is that thing pushing the markets around >> it's got to be demand and omicron. obviously they're related. different governments are taking different approaches over the weekend you've seen some european governments coming out with full lockdowns, leading to zwjitters this is a repeat o last winter or parts of the spring when oil demand took a significant hit. what we are seeing is that it's different this time around, a lot more people are vaccinated, about 50% globally are vaccinated b, this last year or earlier this year, asia was still in -- under lots of mobility restriction. now asia is opening up and you are seeing stronger demand out of the east. and finally, i think people aren't necessarily as compliant. i think you've seen that with

governments as well. very few are coming out with out and out lockdowns. it's much more guidance around we're advising you to not mix. we've seen that on the streets in traffic data as well. it hasn't come off nearly ads much as what we've seen in the past there's demand but not what we've seen in the last 12 to 18 months >> i'm wondering in your role as an analyst, somebody that watches all the markets you have a number of models and things you look at. what exactly, then, in your mind is the biggest kind of factor you're looking at with regard to return of travel demand? do you look at things like airline bookings, like here in the u.s. tsa screenings for passengers what would signal to you that there's an increased demand for fuel given the fact travel may or may not be returning? >> i think that -- sorry the points -- the data points you talked about are exactly

right. we scrape airline data, traffic data, and airline booking data from around the world. we are keeping close tabs on that we looking at vehicle travel miles because people may not be flying but they're driving but it's the hospitalizations we're looking at for the next two weeks. obviously case counts around the world are surging right now. if, as a lot of scientists are saying, this strain is milder, then hospitals shouldn't be overwhelmed, i think that's going to give people more confidence to get people back on the road again, road or planes that's what we're looking for in the next few weeks, january in particular do we see demand increase again if it does we would come out and say this connection is overdone and prices would be higher. >> thank you very much have a nice day. as we head to break, a check

on futures right now markets are gyrating right now but the biggest pre-market laggards you can look and see what's happening the dow jones taking a tick higher here in the last 15, 20 minutes or so on the heels of that moderna news coming out with regard to the efficacy of their products against the omicron variant. if you haven't already done so, check out our podcast. check us out on apple, spotify or your podcast of choice. we'll be right back after this break. ...and dry, cracked skin. new gold bond advanced healing ointment. restore healthy skin, with no sticky feeling. gold bond. champion your skin.

stocks showing little christmas cheer, looking to kick off the holiday shortened week with losses, futures deeply in the red. the markets suffering a one, two punch as the omicron variant rages across the globe with surging case and hospitalization figures here in the u.s. as well former health and human services official rick bright lays out what you need to know about the surge. and goldman sachs slashing the growth projections for the u.s. economy after senator joe manchin torpedos president biden's $2 trillion build back better plan. it's monday, december 20th and you're watching "worldwide exchange" right here on cnbc welcome back to the show, i am dominic chu in for brian sullivan today

here's how stock futures are looking halfway through the 5:00 a.m. eastern time hour you can see here futures deeply in the red the dow down about 432 points. the implied open there is still roughly to the down side by that amount of points you can see here just in the last half hour or so we got a tick higher on some of the news out of moderna about the efficacy of some of their booster shots with regard to the battle against the omicron variant. we'll check on those headlines later on down the line pre-market losses accelerating the last couple of hours with the same news. same story for the s&p 500 and nasdaq as well you can see both trading to the down side getting a tiny bit of help in the last half hour with the headlines from moderna. overseas, red in europe as well the german dax off by nearly 2%. cac in france off by about 1%. and the ftse down about 1.25% a

well in asia, markets are still in the red. nikkei 2% down, hang seng off by 2% and the shanghai composite down 1%. the treasury side, we are seeing the move lower in yield, a bid for bond prices, the 10 year 1.38%. just about .61% for the two year and bitcoin also moving to the down side. you can see bitcoin prices down about 2%, 45,909 the last trade there. ethereum down as well, $3,799 the last trade and the fallout after senator joe manchin withdrawals his support for president biden's $2 trillion build back better plan that move the focus of a new note out from goldman sachs. the team is cutting its u.s.

growth forecast on those comments saying, quote, bbb no longer looks like the base case we recently put the probability of a modified version at slightly better than even. but in light of manchin's comments the odds have clearly declined and we will remove the assumption from our forecast with this change our gdp forecast for 2022 now stands at 2% in q1 versus a 3% prior a failure to pass it would introduce some risk to our expectation that the fomc will deliver its first rate hike in march. keep an eye on those comments in the markets. the latest in the covid pandemic as well several countries in europe are rolling out new measures during the holidays the netherlands ordering a lockdown while germany has banned travelers from the uk where the omicron variant has become the

new strain cases of omicron are doubling every one and a half to three days across the globe. the variant has been found in 89 countries within a month of it first being discovered by contrast, the delta variant took six months to reach that many countries meanwhile in the u.s. president biden is set to address the nation tomorrow afternoon amid rising omicron cases and new steps the administration plans to take to address those issues. and news out earlier from moderna in this hour saying a third vaccine dose boosts antibodies 37 times more than a pre-boost. a booster dose works against the omicron variant in lab tests they also say. the company is developing an omicron-specific booster in case it's needed. a check on moderna shares up by about $16, $310.98 the last trade there. up by about 5.5%

and johnson & johnson down 1% and pfizer up as well. so vaccine makers a focus for traders as well. joining us now dr. rick bright dr. bright, thank you for being with us this morning we've had a number of guests on this program already and many conversations i've had, not just wall street but the medical community as well. talking about the notion we should be focussing more on hospitalizations and severe case counts rather than cases what's the case there for why we are still looking so closely at cases? >> dom, thanks for having me on this morning the cases are predetermining is it t-- statistic or measure to look at what we'll see with hospitalizations and death even though there are reports that the omicron variant might cause milder disease than the delta variant, we know clearly that the omicron variant is much

more contagious, is going to infect many more people, pl magnitudes more people more people infected will lead to more hospitalizations and more deaths. there's still a wide swath of america and the rest of the world who have not been vaccinated at all with little or no protection at all those are going to be the hardest hit with omicron >> we're looking at a graphic right now, doctor, of the covid-19 hospitalizations. they are ticking higher as case counts go higher, but they're nowhere near the peaks we've seen in prior waves, especially with delta, previous ones going back to the early part of 2021 is there a reason why, in this particular case, we are perhaps not going to be as concerned about some of those symptoms as you point out or is it too early for us to make any kind of those assertions about whether or not this virus really is going to be

as severe an issue >> dom, it's much too early. we need to not be overly confident in how omicron is going to rip through the human population it's also important to remember there's a lot of delta variant, delta variant we know is a killer and if you're unvaccinated it can kill you we know that omicron is still the same virus by different names, some mutations, both are a killer both circulate in the next 6 to 8 weeks in addition influenza is circulating in the united states and the northern hemisphere. you have a triple whammy on the populations in the next few months it's going to cause more hospitalizations and deaths than we're used to seeing. >> we just showed a graphic of the number of americans who have been vaccinated at least with one dose or fully. right now about 72, 73% of folks have gotten one dose of the vaccine. 61% are fully vaccinated what kind of vaccination numbers

do we need to get to in order to be something we can put in the rear view mirror >> global we need at least 70% or 70 to 90% of the people vaccinated where we have large pockets of unvaccinated people around the world is where there's a higher likelihood for these new variants to emerge and spread around the world until we get the numbers up everywhere we're going to be at risk of a new variant emerging and swinging back through to a highly populated and vaccinated region with a new variant that can evade immunity from the vaccines we have today we need to continue making improved vaccines that give us longer durability and better and broader protection and it's also important to remember with omicron that most of our therapeutics have been knocked out of play right now. we have one antibody to treat those people severely ill and hospitalized the other companies are having to reformulate and make

antibodies it will be a few months before they have them we have to make sure we have the new drug from pfizer, getting it authorized as soon as possible so we can have more people with greater treatment options sooner that is how we get ahead of omicron. and most importantly, dom, our first line of defense is a high quality, n95 mask. everyone should wear a high quality n95 mask every time they step out of their home during the holiday season. >> dr. rick bright with the conclusions there we're trying to draw from the early stages of the omicron variant. dr. bright, thank you. amid worries of rapid spread a number of high profile companies are hitting the brakes and in some cases throwing completely out, in reverse, their return to office plans for employees. robert frank joins us with who's getting workers back to the office and who's staying with

remote work? >> j.p. morgan telling workers they can go back home for at least the next two weeks, the memo sent last friday said workers depending on their role could work remotely until at least january. and then you have citi, who called people back for two days a week in november now telling employees they can stay home jeffries asked their workers to stay home because of a spike of 40 new cases there and you have morgan stanley also giving more employees the option for working from from home all of this happens as new york city was counting on the financial firms to lead the office recovery and the city's commercial comeback after the holidays about a third of new york city's office workers were back in the office as of december. they hoped that would reach at least 50% by january but now the partnership for new york city expecting a broad roll back in the plans. you have apple returning in

february initially now putting it on hold google announcing a delay. and meta delaying its return that was supposed to be for january now at least five months delayed. you look at the stock angle of this, the big new york commercial read is down this week because the city's vacancy rate still close to the record of about 17% >> if you look broadly, robert, and this is very specific because you and i both live in the area we kind of see what's happening. is there a fear that many of the businesses that have been on the comeback in new york are now going to start to suffer as well i know, and i've told viewers, i took my daughter, my wife to see the radio city christmas spectacular, the ro-rockettes, they've cancelled the rest of their shows. what's the ripple effect if you don't know what's going to

happen in new york over the next couple of months. >> there's two buckets there one is the tourist economy which as you point out had been coming back, that was an important source of sales tax for the city now we have the broadway shows canceling. the restaurant traffic was light over the weekend retail traffic is still strong in the city but unclear whether that's going to continue through this week and into the holidays. then you have the commercial comeback which everyone was hoping, finally it's going to be in january, the office economy, the computer economy so crucial to new york is coming back it will come back but now it's on hold another month or two. >> a big deal there for the new york metro area. coming up a new headwind for the red hot housing market new data suggesting profits for flipping homes are now taking a hit. as we head to break another look at the biggest losers on the dow in the pre-market trade right now. chevron down by nearly 3%.

cater caterpillar, boeing, american express and p&dog wn as well keep an eye on those we're back after this.

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stocks some of the biggest pre-market laggards. welcome back to the show a new report on the business of flipping homes reveals that profits on the real estate investments have fallen to the lowest level in over a decade. the drop comes as more investors dive into the house philliping market di diana o'lick joins us with more. >> word of warning, the returns are shrinking. close to 95,000 homes were flipped in the third quarter of this year. which was an increase for the second quarter -- from the second quarter in a row after flipping dropped dramatically in the first year of the pandemic flips represented 5.7% of all sales, that's according to adam data profits are shrinking. the average gross profit was

just under $69,000 and the return on investment fell from 32%, down from 44% return in the third quarter of last year. the lowest return since the start of 2011 and the largest drop since early 2009 when the housing market was crashing, of course, during the great recession. the reason is that home price gains have started to slow so when investors purchased the homes prices were rising a lot faster, the run up in resale prices not as much as the run up in purchase prices as we know, all real estate is local. investors saw the biggest profits in buffalo, new york, oklahoma city, and pittsburgh, pennsylvania the smallest returns were in portland, boise and laredo interesting, supply chain disruptions don't seem to be as much of a problem as you think

as flippers are getting the process down faster now. >> even for me we're having trouble finding materials or contractor help for any kind of home improvement project do you expect these profits to slip further going into next year given the fact that we're seeing the prospect for higher interest rates, the cost of carry changes for many of these flippers as well >> you hit it. it's the mortgage rates. if rates start to rise you have a two-fold problem, number one it gets more expensive on so a lot of prices may fall a little bit because buyers have less purchasing power when you look at the flippers themselves, a lot of them use cash but a lot don't so it's kind of a 50/50 split. if you're carrying three or four mortgages and rates start to go up, you're going to have a problem with that and it's also a higher carrying cost not only will it eat into overall home prices which could

reduce the profits but again the carrying cost as you said, dom. >> thank you for that. on deck, futures under pressure amid worries of the omicron variant and the biden agenda how you need to navigate this fresh year end volatility. we'll be right back.

welcome back to "worldwide exchange." back to the markets right now. another rough day taking shape after a rough week last week take a look here at the sector performers on a one-week basis technology, energy and consumer discretionary among the worst performers on a one week basis you can't forget the biggest stocks out there look at the last week for apple, microsoft and alphabet down 4.5% for apple, 6% for microsoft and 6% for alphabet

shares let's welcome in mark. is this a market really only about those megacap names? look at the underperformance of the nasdaq right now versus the dow? >> dom, good morning so i think really what's going on right now is the market is struggling to find direction right now. if you think about it, we're entering uncharted waters for a lot of investors we have this combination of high inflation, rising rates, hawkish fed. that's new to a lot of people. we haven't seen a situation like that since the '70s, right i think really what that's doing, it's bringing with it a changing of the guard. you have the new market leadership you have longer duration stocks. a lot of growth tech stocks that have been getting hammered and i think that's going to continue i think you see money continue to move into shorter duration stocks, stocks generating cash flow and earnings right now, or engaging in dividends or

engaging in share buybacks i know those haven't been in favor the last decade or so but that's what you're going to see happen right now. >> we like to look at the themes for the coming year. what do you think will be the driving forces between that early trade, first couple of quarters next year, the continuation of the tech trend this idea that the fed is going to take steam out of the markets? what exactly is that broad look that you're looking at for the first part of 2022 >> i think i mean, obviously right now leading into 2022, the two narratives are number one, omicron. not necessarily the virus but the policy response, mask mandates, lockdowns, stuff like that and also a hawkish fed i think the fed is going to be more hawkish than they led us to believe. jay powell last week implied that inflation would be down to 2% a year from today

i have no idea how we get there unless the fed gets more aggressive than they're leading on they talked about obviously tapering will end in, i believe, march. there's talks about three interest rate hikes next year. i think what you see is the fed may begin to unwind the balance sheet and sell off all those bonds they've been accumulating the course of the last several years. stocks have to climb a wall of worry in 2022. i think they'll do it. i think stocks are higher a year from today but there's definitely some pretty substantial headwinds right now. >> what part of the market, what stock specifically, sectors, industries are in that position to really outperform in that wall of worry, scenario? >> so look we're shifting towards defensive growth names, kind of an oxymoron, but names like dj's wholesale clubs. it's defensive in that it's a consumer staple. when inflation is hot, consumers

look for discounts wherever they can get them, they buy in bulk bj's is the ugly little brother of costco, it's growing at twice the pace of costco the stock has been rerating higher all year, i think it continues to do so it doesn't deserve to trade at costco's multiple but shouldn't be at a 50% discount those are the names we're adding right now. >> if you look at the way the defensive growth companies kind of factor in, does that mean there's an end to the so-called value cyclical trade like energies and industrials >> yeah. i think right now the market is more focused on slowing economic growth, the hawkish fed and i think that takes a lot of air out of those cyclical sectors. look at how energy has been doing the past few weeks hasn't done that great >> sure. >> i think you're going to see more people transition to stuff

that's generating constant cash flows right now, short duration is where you want to be. >> thank you very much, sir. we appreciate it. >> thanks, dom. as we head to break, checking on the dow futures, nasdaq and what's happening around the globe as well you can see some moves to the down side. "squawk box" picks up market covegeomg nt.ra cinupex just an investor,you'ren you're an owner with access to financial advice, tools and a personalized plan that helps you build a future for those you love. vanguard. become an owner. nurse mariyam sabo knows a moment this pure... ...demands a lotion this pure. new gold bond pure moisture lotion. 24-hour hydration. no parabens, dyes, or fragrances. gold bond. champion your skin.

good morning well, rough morning. stocks getting slammed as wall street begins a holiday shortened week, tech once again the loser with nasdaq dropping 2% the big driver, covid fears. rising case counts, breakthrough infections and a jump in hospitalizations and president biden's build back better appears to be dead

killed by senator joe manchin. it's monday, december 20th, 2021 and "squawk box" begins right now. good morning, everybody. welcome to "squawk box" right here on cnbc i'm becky quick along with joe kernen and andrew ross sorkin. and here's a fine merry christmas for you this morning check out the dow futures. you see right now the futures are indicated down by about 1% that's a decline of just over 370 points this is, believe it or not, off the lows of what we saw earlier this morning where dow futures were down by more than 400 points the dow is lucky check out the nasdaq futures this morning, it's indicated down by about 1.4% this is off the lows the nasdaq was down by about 2% earlier this morning right now it's a decline of 22