>> dr. j >> discovery media play, over 50 companies, mel. disca. >> we leave you here with the s&p 500 down by 82 points. we, of course, will be watching the markets for you throughout the day. that does it on "the halftime report." meantime, "the exchange" with kelly evans begins right now ♪ melissa, thanks. i'm kelly evans, great to be back with you. two negative covid tests last week who else could say that? we are down again today for the fifth time in six sessions yes, the omicron spread is hurting sentiment but we will look at other factors adding to the selling pressure like the build back better road block senator joe manchin opposing it. we will tell you what that means for gdp and the gop. have you seen the lines for covid tests? good luck trying to get an at-home testing kit. i have people at cvs at 7:00 a.m. tracking packages and

ordering online. first to the numbers christina is here to run us through it today >> i have to add my parents are stuck at the airport because they haven't received the test results. let's talk about the markets the fact that the dow, s&p 500 and nasdaq are hitting about 2% lower today. the dow fell through the 200 moving average level, which is 34,620 you can see slightly off that, holding a touch higher a key level for the s&p 500, 4,607. that was the 52-day moving average. we touched lower than that nasdaq as well the nasdaq now hovering at 14,875 all 11 sectors are in the red. you have financials, materials, industrials, consumer discretionary and energy over 2% lower. with the surge in covid cases we are seeing less of a rotation into big cap and the stay-at-home companies like teladoc and peloton. i know mike will be coming up to talk about that, but there are a lot of notes out there about

over valuation, especially in software let's get defensive. you have consumer staples throwing some health care in there. there's some companies like clorox and kimberly-clark getting a boost from omicron i know i added some clorox on my desk even crypto not spared bitcoin hitting a low of 45,610 earlier. now you are seeing 46,145, still up over 65% year-to-date 58% actually, on pace for the third straight positive year well ether, along with that ether, a positive note, up over 400% year-to-date. kelly, back to you >> christina, thank you. good luck to those parents of yours. >> they're stuck >> so frustrating. everyone is dealing with it. let's turn to michael santoli now. he has the breakdown on this breakdown in psychology, really a breakdown in the markets maybe it is a bit of both, michael. >> yes, they're absolutely linked, kelly. you know, it has been a recent turn in the last few weeks towards traditional defensive

sectors, not just the things somewhat independent of the macro economy like big cap tech, but the old school defensives like health care and staples those are the outperformers on a month-to-date basis unlike the nasdaq 100, down 4%. when we had concerns about reopening, concerns about consumer sentiment it was the beneficiary because they're big, quality companies but they're in a valuation compression going on right now. the xrt is retail, and that has really been suffering for a while. on a longer term basis, this isn't necessarily something you would look at and say it is now a title shift, the market is in defense mode and therefore we have to kind of upend everything that led the way to a 20% gain so far this year in the s&p 500. but i do think it is somewhat notable. one final point is another flow we are seeing in the last month or so is from crowded positions, those very, very popular trades, big growth stocks and others, towards less crowded or neglected areas. consumer staples would

absolutely qualify as one of the more he inneglected areas. it could mean it is a stutter step in the move, a bounce on a relative basis we will see if it has legs >> mike, one thing you can sort of communicate well is explaining the fact we've not had the ten-year yield surge but still seen high-valuation stocks collapse what is the linkage between the two? for people who are figuring out whether they want exposure to things like rk, if you want to call it that, as this variant spreads, what would you tell them >> the first thing i would say is that linkage between yields and hypergrowth, highly valued stocks was always a fairly tenuous one. it was really kind of circumstantial evidence as opposed to causal evidence if there's a driver in terms of the discount rate being lower or people looking for beneficiaries of negative inflation adjusted yield, to me it is the huge faang-like companies that have very predictable longer term

earning streams you are discounting back to a lower rate that makes sense to me and they've out performed. the higher growth areas, to me it is the psychology of people bracing for a lower liquidity environment whatever it might mean to them with fiscal and monetary tightening coming and maybe short yields going higher as you mentioned recently, that signifies that maybe it is a marker of, okay, it is time to maybe set aside childish things, if that's what you want to believe it i do think that's the case but also those things peaked in january and february nothing was going on with the yields to drive that when they did peak back then >> exactly exactly. there's the market again, just can't get out of its own way here mike, thank you so much. we really appreciate it. michael santoli. both of my next guests thing the sell-off is a buying opportunity, one is thinking stay more defensive, the other wants to take a chance on beaten down crypto names. let's welcome in the portfolio at sega financial and mike

mailey from miller, tabak and coe. jay, where do you stand? >> great to be here, kelly you are seeing the russell get beat up, you are seeing a flight to safety, keeping rates down a bit. they had a bounce back in the last hour or so. but when you look at the market in general here, you know, the main risk we are still concerned about is the fed raising rates faster than they have to yes, these covid sell-offs are going to come and we do look at them as buying opportunities >> all right so which one are you doing though are you buying defensive, buying crypto names i am guessing they are talking about you because i see coin base, proctor & gamble and charles schwab on your list. >> if you are willing to dip your toe into the crypto base, it had a sell-off, more than a regular correction, but it is not typical of this. this kind of asset class will do it from time to time where you get the 30%, 40% sell-off. pick your bottoms when looking at things like a coin base, but

for us we're more about being hedged in the market even when you pick individual names like coin base, proctor & gamble or schwab, we still think you should have a hedge in your portfolios because days like this will remind you markets don't just go up >> matt, that means you are staying a little defensive here? >> yes, definitely one of the things we have with this, you know, new change with the federal reserve and their policy is they're becoming -- you know, they have given this massive level of stimulus, emergency levels of stimulus that stayed with us long past the emergency had faded. now that they're pulling back from this, that means people have to, you know, recalculate how much risk they want to have in the marketplace or, more importantly, how much leverage they have in the marketplace that to me tells me we want to be more defensive. i like moving in some of the consumer staples you have been talking about. there are places where you can play in the technology sector, but we just need to be more careful than we have been. >> yes >> i just think -- go ahead. i'm sorry.

>> i'm sorry i hate these, especially on zoom because i never want to cut you off. kellogg and at&t are names you are interested in here >> it is interesting because kellogg is a consumers staples things some have done well like colgate and clorox are getting expensive. kelloggs still trades at 14 times forward earnings, so a nice discount to the market forward. it pays a nice, solid dividend at 6.3%. you also have at&t which is finally getting bullish comments, upgraded recently. even jim was talking about it recently -- i'm sorry, jim cramer, talking bullishly about the stock, has an over 8% dividend yield and they're paying down all of this debt it has been dead money for the longest period of time it is a great opportunity i think to buy the name. i do think we want to be looking at tonight when micron reports that could be very important to how the stock market does the rest of this week.

>> i was looking at that in your note, saying they've been stuck in a sideways range over the past month between 80 and 88 definitely something for our viewers to watch, whether or not it is a bellwether for the whole market right now anything could be, right, jay you mentioned that you think the fed needs to catch up and tighten more do you think any of that is out the window given what has happened with omicron and with senator manchin? when it is said that the gdp only will be 2% now, is the fed going to be aggressive >> when you talk about gdp you have to talk about earnings. the market, at least companies continue to surprise and exceed analysts' earnings estimates we are in an environment where low rates and strong corporate earnings are pushing investors more into the stock market, right. so for us when we consider what the fed has in front of them, potential -- we didn't even talk about inflation yet. so when you think about all of those things that are ahead of it, it has to be a little bit more -- they have to be more on the aggressive side. but there's still no better place to go.

the challenge for the average investor that's working through their 60/40 portfolio, bonds end up being very difficult to invest in. so you have to look for an alternative there. for us we like to invest in the broad market, generally speaking using the s&p, u.s. large caps, but in a way that's protected and hedged if you could limit your down to 8% or 10%, that ends up being why you put it into equities >> nasdaq is down 7 1/2% from the intraday high last month would you be a buyer yet >> not yet i think anything can happen over the near term, but i think we are in the process of de-risking people's portfolios, and, therefore, you know, even though earnings have been strong, the stock market has been strong as well, so earnings haven't been able to catch up so i think people if they raise a little bit of cash, i'm not saying going to 25% cash or anything, but if you raise a little bit of cash, if you get the 10% pull back you will be the one not selling at the wrong time, you will be the one buying

at the right time. if you have that money set aside in advance, you will be able to keep your head while others around you are losing theirs that's where you really get the best opportunities >> was that the richard kipling and that will make you a man, my friend something to that extent jay petrocelli, matt maley, thank you for the skugs today. still ahead, as okay kromm surges woo look at the stock's best position to benefit from a surge in test in this name is up over 25% this week we will reveal it next plus, did senator manchin deal the fatal blow to the president's build back better plan we will look at if there's still a way forward. as we head to the break, most names in the red right now. proctor & gamble is one of the names in the green walmart just in that territory now as well. caterpillar, goldman, those are your big decliners today we're back in a moment

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♪ i'm watching it fall ♪ watch the full story at www.xfinity.com/sing2 ♪ welcome back, everybody. despite what is going on in markets today, we've actually had good news from moderna on the booster shot and the level of protection it offers against omicron. moderna's shares were up earlier on the news. they've given up those gains meg tirrell is here with the

latest on that and everything else going on. hi, meg. >> hey, kelly. moderna's update was going along so far that two doses don't appear to increase the antibody for omicron. adding the booster does increase the level. the half dose boosed by 37 fold whereas the full dose is 83 times hour the half dose is cleared as the booster for everybody. it doesn't sound like that will change moderna is continuing to develop the omicron-specific vaccine in case it is needed, planning to start human testing for that in early 2022 this, of course, as we are going through a surge right now, seeing case numbers across the country topping 130,000 every day. hospitalizations also on the rise, approaching 70,000, and deaths approaching 1,300 a day the areas of the country facing the highest infection rates, although you see a lot of red on the map right now, are the northeast and the midwest.

of course, this is a mixture of delta and omicron at the moment. we are waiting to get more national figures on omicron's prevalence from the cdc, most likely tomorrow. as of now we have been hearing from regions about what their testing is showing houston methodist saying over the weekend 82% of the new symptomatic cases they're seeing are omicron. in connecticut, sequencing showing it was 40% level on friday, but on pace to exceed 50% within a few days. this, of course, kelly, as a lot offolks are seeking testing right now. we have seen the lines in new york city, they wrap around tests. in terms of pcr testing, the level the cdc is reporting are on par with what we have seen over the summer but we know a lot of rapid testing is going on, millions of tests not going into the reporting system. of course, a lot of the tests becoming exceedingly hard to fin. kelly. >> interesting as a bellwether, the nfl dropping testing except for unvaccinated players as

they're having games tonight and they're spreading them out to keep it going. as moderna told us, if the third shot provides the antibodies but the first two still provide the protection, what's the difference >> yeah, so there is thought that two doses of the mrna vaccine still provides infection against severe disease we don't know exactly to what extent, but we know that vaccines provide protection through more things than just antibodies t cells, for example so those are expected to still be able to recognize omicron, and they may not be there to be able to say, okay, you can't infect me at all, but they are going to keep you from getting so sick you get hospitalized that is still really encouraging. by boosting the neutralizing antibodies, that's kind of your front line defense to try to stave off the ability to get infected, although we do still see people who are vaccinated and boosted getting infected with omicron, too. so it is a poyerful one. >> that's helpful, meg thank you. i appreciate the explanation meg tirrell is all over it for

us we appreciate it the higher demand in testing is leading possibly to higher stock prices for some of the biggest test makers. let's talk to jared holtz about this, he's with oppenheimer. we teased this earlier q dell is one of the big names when people want to play a surge in testing demand. how are they doing >> kelly, hey, how are you it has been a great stock over the past week. i have highlighted it several times and various communication with investors as being one of the purest or most logical ways to play what is happening, which is an insane amount of testing everyone seems incredibly concerned, right or wrong, about omicron. the lines are, you know, incredibly long at so many of these centers. i can really only talk for what is happening in the northeast, but if that's indicative of what is happening everywhere else, it is one of the best ways to play it now, the company makes a rapid test for at-home use you can find these at cvs or walgreen's, et cetera, if you can find them. we just feel like the interest

in these tests from a get-back-to-school, from a travel standpoint, from any communication standpoint, even meeting a friend at a coffee shop, these tests will be used in a big way from now until the foreseeable future >> have they gotten more effective at-home tests? >> well, the efficacy hasn't really changed much. it is the same test that's really been available for months through the pandemic but, you know, as we know with these other variants that are happening and the time of year, right around the holidays when people want to see friends and family, you know, the rise of cases and the rise of infections are leading to more interest in these rapid tests. i think they're good enough to catch the vast majority of omicron cases as well. so this is to me one of the most logical ways to play the pandemic at this point >> you also said keep an eye on perrigo because of coughs and colds, is that right >> that's right. like if omicron is truly doing

what most clinicians say it is doing, which is causing a mild to moderate cold or flu-like symptom for the average patient that's getting it that actually has symptoms, again, it is not a huge number but it is in totality when we look at, you know, the sheer number of people who are getting it, perrigo should benefit it is an over-the-counter medicine company, a lot of cold and cough problems j&j has an element of the business, abbott, et cetera. there are a lot of companies, perrigo looked interesting to play this trend. >> still down 1.5%, but coming off a 3% up week which is something in this environment. >> exactly >> jared, thanks so much it is good to check in with you today. >> thank you, kelly. >> jared holz of oppenheimer outbreaks are wreaking

havoc. and we have other stocks that can show you what that is, we will tell you what they're doing and what the leagues are doing to move stocks forward noike is down about 3% today down 10% or 11% over the past month. we will tell you the key things to look for in the report. that's next. . when you feel right, you coach right. i know that's right! prime never believed in double coverage, but health insurance and aflac...is money. ♪ must be the money ♪ and i know how coach prime feels about money. -aflaaaac. -♪ aaahhhh ♪ now that is what this jacket needs. ♪ must be the money ♪ get help with the expenses health insurance doesn't cover. at aaflac.com (♪ ♪) get hewhether it's apenses healthtechnology first,t cover. (♪ ♪) a fashion first, (♪ ♪) a science first, (♪ ♪)

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pretty even for the dow, the s&p, all down about 7.1% the financials were hit hard as yields fell, but yields are trying to find it. you can see a name like regions

down 3.5%. homebuilders are declining today after the xhbt is down homebuilders are having the worst week since october 2020. nothing much macro to read into it here, i guess the ev names are falling as the build back better bill, which would allocate millions towards incentives, appears to be dead at least for now lords town, nicola and tesla down all about 8%, but tesla down about 3% the worst performer on the nasdaq is peloton as the decline continues, down nearly 9% again today. you might think for a stay-at-home in the market it would get a benefit. no, down 61% in three months in the green we have p&g, clorox and pfizer and the news stock. to frank holland for the update. >> here is the latest at this hour senator joe manchin is concerned some parents it use their child tax cred checks to buy drugs nbc news reports that's what the

senator from west virginia privately told fellow democrats in recent months over the weekend manchin stunned the white house when pulling the plug on negotiations over president biden's build back better bill, among many provisions he doesn't like is the one-year extension of the child tax credit payments. maryland governor larry hogan has tested positive for covid. it was detected by a routine rapid test results from a follow-up pcr tests are not in he has received three covid-19 shots. he says he is feeling fine and is urging everyone to get a vaccine or booster if you haven't done so already. the mayor of washington, d.c. is reinstating an indoor mask mandate in effect through the end of january d.c. government employees and contractors need to be fully vaccinated and get a booster tonight on the news, why some families have to choose between buying food or diapers and what is being done to help them that's 7:00 p.m. eastern on cnbc kelly, back to you >> awful frank, thank you coming up, crypto slides a mixed bag for the airlines,

and solar is getting crushed today. the tan ecf on pace for the worst day since july we will look at why right after this at vanguard, you're more than just an investor, 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. it's a thirteen-hour flight, that's not a weekend trip. vanguard. fifteen minutes until we board. oh yeah, we gotta take off. you downloaded the td ameritrade mobile app so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard before we board. excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position. you two are all set. have a great flight. thanks.

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♪ welcome back, everybody. a lot of ground to cover in today's sell-offs. let's get right to it with declines of nearly 2% for all of the major averages pippa stevens is going to cover the hard-hit energy stocks for us phil lebeau is watching the airlines and how they're reacting to omicron. bitcoin may be below 47k, but still a big year kate rooney will look at it for us pippa, solar, kick it off for us >> let's start with oil posting the worst day of the month, the wti falling 6% at the low of the day. like the sell-off across the board, this is about omicron oil is sensitive to demand, so fears over new restrictions and potential lockdowns are weighing it is noted that volunteer travel and returning to office, not boding well for demand

adding that crude has been on a sentiment roller coaster flying high in november when inventories were running short but now in a full-blown panic over possible lockdowns. trading around the holidays leaves the market exposed to outside mood energy stocks are taking a hit on the oil decline the sector is down 2% today. the production companies hit the hardest. devon, diamondback and occidental leading the declines. the invesco solar fund is down more than 6% today, putting it on track for the worst day since march. solar edge, first solar and sunnova and sun run down sharply. the build back better plan outlined hundreds of billions of dollars for green projects, so the uncertainty is weighing on stocks today >> it always feels like one should be down, you know, old energy can be down but new energy down. it is all down any green you are seeing >> sentiment is bad across the

board. if you have a sell-off in the major averages, areas of the market riskier like green energy will be hit especially hard. a lot of unknowns here they are still up over the last few years, so investors taking some profits but they've been sliding for a while near now so it begs the question at what point will people return. >> absolutely. i am sure they're wondering. pippa, thanks. we appreciate it let's turn to phil lebeau. you could almost say the airlines are outperforming today, almost. >> yes, it has been a choppy session but we have seen at times some of the airline stocks actually in the green. here is what we're seeing relative to the omicron impact i think a lot of people thought, here we go again, the airlines are going to sell off big time it really hasn't happened, in part because you have domestic travel, which remains strong look, the weekend passenger levels down just 13% compared to 2019 yes, international bookings are easing a bit, but when you look at where they are relative to 2019 they're only down 40% to

50%. i say only because, remember, there was a time when they were down 65%, 70%, 75% while we have seen greater lockdowns and we are showing you the international-related carriers, talking about american, delta, united. jetblue also has flights into the uk look, we haven't seen the kind of lockdowns that many people thought we might with this variant, at least not yet in europe so bookings, while they are softening a bit, they're still holding up in terms of the domestic carriers, those who are primarily here in north america, they're also being hit today in part because there is a concern that, look, will fewer people be flying, et cetera. we haven't seen that so far. in fact, if you look at the data in terms of bookings right now, kelly, it is holding up relatively well. i'm sure there are stories, i have heard stories, anecdotes from people saying, look, we were supposed to go someplace, tested positive or somebody didn't want us to come there because they might be positive i'm sure that is going on, but we are not seeing the widespread

pullback that we've seen in previous waves of covid 129. >> there's been other whiplash in the ceos in place saying, maybe we don't see the mask, then the ceo got covid and then fauci said yesterday he doesn't see how he could ever not wear a mask on an airplane. >> i think the mask thing is overdone, i do i think it is what it is in terms of air travel right now. most people, while there may be some confusion and, yes, there will be some people who are not happy about it and they will voice their diss pleasure, i think to a certain extent people have said, it is what it is and it is here for at least through march, and don't be surprised if it is extended beyond that >> in other words expect to be masked up on planes for some time >> correct >> yeah. >> look, we know it is here through march. the white house has the ultimate call on this i wouldn't be surprised, given what we are seeing with this variant that is, you know, cases are rising, that you see it extended a little bit further.

>> yeah, no, i think you are right. i think we will be doing it for a lot longer my son was 3 1/2 and the other day i thought to myself i might still -- we're still going to be dealing with covid when he starts kindergarten, i have a feeling. >> not good. unfortunately, it is the times we are in. >> yeah, exactly phil, we will leave it there thank you, sir always appreciate it >> you bet let's get to bitcoin, on pace for the third positive year in a row, even with everything that's been going on lately. kate rooney with the latest. kate >> hey, kelly. yes, all things consider it has been a solid year for bitcoin's performance, and especially good for some of the smaller cryptocurrencies let's start with bitcoin though. it is up about 60% since january. it kicked off this year around $30,000. today it is closer to $46,000 with some wild swings in between. the high was near $67,000 back in november. bitcoin did lose its grip on market share as well this year it dropped from roughly 70% of the total crypto market to closer to 40% more recently.

this happened as more money flowed into coins like ether, the second largest cryptocurrency, and a boom in nfts with more developer activity in some of the coins. we had speculative names like dogecoin ether is up more than 40%. like solano, for example, take a look, that one is out more than 11,000% so far this year the total cryptocurrency market cap. that includes the thousands of other coins out there in addition to bitcoin tripled to $1.5 trillion in value at one point in the year it was closer to $3 trillion. for individual investors, kelly, really it depends on where you bought according to data from glass note, about 25% of all bitcoin supply was bought above the price where it is trading today. so in other words one in four bitcoin right now is under water. an analyst says relatively flat activity in the past two weeks suggests investor interest is

reaching an exhaustion point at current prices kelly. >> do they ever analyze, kate, what that number needs to get to to find a bottom in other words do you have to flush out all of the people who are under water? >> so the number that was out there is $53,000 that was the current cost basis, at least as of last week, that it really needed to climb above to sort of test that resistance level. the other levels that folks are looking for in the $50,000 range, but that tends to be key. a lot of investors, newer investors really that bought in around november really are under water. that seems to be most of the selling going on but like glassnote points out, a bit of exhaustion. if people have sold, they're probably waiting on the sidelines, at least when it comes to bitcoin, to see where we are in january. there's also things like tax selling that may be adding to some of the weakness here. >> absolutely. kate, thank you as always for following it all kate rooney for crypto up next, nike after the bell and a diverse e-- divergence in

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welcome back, everybody. consumer discretionary has been a tough sector over the past month. despite it being holiday shopping season it is down 10%, making it the worst performer in the s&p. nike is the fourth largest component. it reports this afternoon and it has had a bumpy road this year with a 10% drop from the 52-week high still 11% since january. p/e, still 42. brian nagel is an analyst at oppenheimer. brian, it is great to have you >> thank you >> this was the quarter they first warned us about, they experienced a lot of vietnam interruptions, is that right >> that's correct. we will see when nike reports this afternoon, but they're a well-run company and they communicate well with investors. nike was would be of the first companies to really call out the

significant supply chain issues, particularly like you said, kelly, the manufacturing in vietnam. my sense going into the report is the team at nike is preparing for the report i very much think there will be a better tone from nike with regard to manufacturing. all else considered, that should be a positive. >> what about omicron? because when i'm out and about these days, the number of small businesses who cannot open, are closing early, they don't have staff, they're saying be patient. you know, the labor chartages are getting more and more problematic here what is a status with a place like vietnam >> you know, it is a great question i don't have a great answer. i mean i get a lot of this information from our companies that do have, you know, people on the ground or at least in contact over there i have heard -- what i have heard lately from companies like nike and others is that the manufacturing process -- the manufacturing facilities in vietnam are in much better shape than they were a few months ago. now, obviously that could be changing we are in a very fluid environment with this latest

variant. it still seems to me from a manufacturing standpoint things are better overseas than they were a few months ago. >> final question then, as they report their results, is profit -- you know, is profitability, are their profit margins expected to be a key focus where maybe they're constrained by inventory but selling more at higher prices? is nike an example of that trend or are they not so much -- you know, do they not have as much operating leverage >> no, that's absolutely a trend. i am seeing it throughout my coverage it is almost like a silver lining with all of the supply chain constraints we have witnessed, is there's just not as much product in the system. there's not as much product here as a result of that, there's been a lot less promotional activity so really well-run companies like nike and among others are actually benefitting from that they're not having to doo with price promotions, particularly with lesser quality brands what you see, as you are alluding to, you see weaker sales because there's not as much product, but the profitability in their sales is significantly higher as they

sell more full-priced items. >> people looking for revenue, gross margin 44% 63 cents eps and options looking. you have a buy rating of 195 price target >> i do. look, this is one -- this is our top pick for us within our coverage universe. i think nike is very well position obviously a fluid situation right now. one of the big bets i'm making with nike, this is a company -- i think it will be a nice segue to what we talk about next i think it is one of the companies that will emerge from the pandemic stronger, better positioned >> let's pivot and talk about the diy versus decorating trend. home depot has been doing well, but we are seeing things like restoration hardware starting to lag. >> it is a very fluid situation, but as i talk to our clients, you know, and, again, this might sound a little funny given today's market action, the

sentiment around the market today, but clients are really looking past the pandemic. the question they're asking is, you know, how much of what we saw over the last, say, several quarters now was real, how much was purely pandemic, but mo will be the winners as the pandemic eventually fades i think from that standpoint, you know, i recently upgraded home depot i have been pausing on lowe's for a while. we took targets up on both names. i think the home improvement space, the structural underpinnings of that sector are very good here and will continue to shine even as the pandemic in this case and tailwinds fade i think that's what you're starting to see. there are some great companies and some will emerge better, but it doesn't have the structural underpinnings like home improvement right now. >> a name like rh, i would think they could benefit for years from people buying houses second homes and maybe needing to fix them up, and it is bolstering the likes of home depot and

lowe's, yet their stock is down 30% in the past month. >> look, that's absolutely true. rh has done a great job. the only comment i would make there, again, carry to home depot's and lowe's and maybe it is not a fair comparison, but there's a lot of competition within the home fashion space. rh, a great job, a great look. but home depot and lowe's are more in control of the home improvement market to the extent we see -- like i said, the home improvements underpinnings strong they will benefit from that. >> great to have you on today. thank you so much. >> you too >> brian nagel with oppenheimer. is biden's spending build a build back bust? the future of the bill and what it means for your portfolio. remember, this show is always a podcast. you can find it wherever you listen to yours. be sure to check out conversations with kelly, in-depth chats i have with key players on hot topic we talked about nuclear fusion with ralph izz o yesterday.

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welcome back want to do a quick market flash to show you shares of rocket companies, down more than 7% after announcing they are buying

the personal finance app true bill for $1.3 billion. they're hoping to build a bigger fintech ecosystem. they are down 30% despite the hot housing market turning to the biden administration's build back better bill. it might be did as senator manchin said he is unable to support it in the current form >> i cannot vote to continue with this piece of legislation i just can't i have tried everything humanly possible and i can't get there >> you are done? this is a no >> this is a no on this legislation. i have tried everything i know to do. >> and with that, wall street is reacting goldman marking down its gdp forecast next year on the news first quarter they took to 2% from 3% previously joining me, head of strategas research partners.

bill, it is great to have you back >> let's parse it out clearly. the bill that passed in the month of november is now dead. that bill is unlikely to come back the big question market participants are having today is will the democrats' leadership accede to what manchin has been advocating since july? if it has to cost $1.8 trillion over ten years, it has to cost that it can't be a program for one years, three years, then another for eight years that equals $1.8 trillion there was a great hesitancy to bee siege one democratic senator. now the democrats understand the reality of a 50/50 senate. one person sets the price. that person is senator manchin, and i do think the democrats

will try to figure out a way to make this bill a much smaller and more focused bill, focused in three or four areas most notably, climate change, health care and the child tax credit you take all of those other programs and they're just not getting through. now, that's easier said than now, that's easier said than done. >> right. >> there is a lot of constituencies that were looking forward to getting that money that are going to have to be told no. i don't want to make it sound easy or guaranteed but that's the process the democrats have to go through over the next couple of months and it is not happening quickly. it reminds me of the affordable care act it took speaker pelosi ten weeks. very similar to today. >> your message to the core sectors is the selloffs could be buying opportunities if they come back with something on that

front. although i don't think this is about individual industries as it is about the impact the gdp plenty of economists are saying we had all of this stimulus going into the economy the past couple years now very little coming in in 2022 i wonder about the impact of that. >> kelly, we are facing the largest fiscal drag in 2022 since 1947. >> wow. >> related to the drawdown of world war ii we have never seen something at 8% of gdp. this helps plug some of that.ga, about . 7. a little bit of the way there. we were going to have a fiscal drag either way. i think it is important to know what is going to drive the stimulus in 2022, that's the loss of the child tax credit which expires at the end of this year my guess is there is enough political support if everything fails they can come back and get at least another year added to

the child tax credit i wouldn't be surprised if some republicans voted for that but the ladies and gentlemen story today is we are dealing with omicron, and the fed tightening and fiscal tightening and it is creating anxiety for voters once the dust settles on this year it will become clearer. towed is a knee jerk reaction. clearly, what the documents were trying to did all year won't happen and it will be slimmed down if something is the happen. >> i am thinking about the combo, biggest fiscal drag, biggest since post war history plus the progressively tightening -- i guess we could call it that even though -- can both of those things still happen next year okay, chop the economy, choppy market, that's -- choppy economy, choppy market that's fine. is it going to create more than chopiness? >> excellent question. in a non-inflationary

environment less fiscal policy means jay powell gets more flexibility on monetary policy, maybe he doesn't have to raise rates three times next year. but the challenge is we are in an inflationary environment and the fed is already behind the ball that's why you are getting this chopiness and this volatility as markets try to figure out, does omicron lead to supply chain bottle necks and higher inflation? that is a different debate than we have had in this country for 40 years and created some uncertainty around this. my sense is that the fed will work that out. i think it is going to be okay most of the hard work on this fiscal bill was done in october, when we removed the tax increases in 2022, particularly on the corporate tax rate, and the u.s. multinationals. >> yeah. >> once we did that, we took out all the earnings sent to 2022. now you are talking about passing a bill late first quarter, second quarter, those tax increases on individuals are

probably not going to be retroactive. and i believe that removing those tax increases, small businesses and individuals, for '22 may be just as powerful as any of the stimulus we were going to get. >> hmm. >> so i think the banks are probably overestimated the size of the gdp that's going to come from this. don't underestimate the animal spirits if you tell small businesses their taxes aren't going to go up. >> great point. >> they ir profits are already letter. >> dealing with so much. thanks for connecting some dots. thanks for your time today. the nfl and the nba postpone games. the nhl has halted games with canada that's hitting this stock hard it is down 3% today, and 40% in two months asesname, and the latest covid meur on the sports front, next

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welcome back, everybody. covid is now wreaking havoc prost professional sports. the nfl, nhl, and nba all dealing with outbreaks the fallout is on the sports' betting stocks. >> they are all down we can put them up so you can see them but the latest covid surge is causing disruptions to pro sports on sunday, the nba announced the post moanment of five more games. the nhl postponed 12 names that involved u.s. teams playing canada they said, look, this is fluid what travel restriction also do cross the border then we saw the odds going wacky heading into the weekend with the browns versus raiders flipping favorites because of cleveland's covid infections some statisticians took the odds off the boards

t what's it all doing to the uncertainty to the sports books. points bets, nbc's partner said look odds makers were confident in the assessment of individual players and how much they affect the line as well as how multiple absences in a specific position group can impact a team. we have gotten used to this over the past 18 months, so, really, this is just business as usual the abnormal has become normal but points bet says all this covid disruption actually slightly increases the handle because some of its customers gam more believing the uncertainty gives them a bit of an edge. and kelly, mgm told me that while their handle for sunday went down because there were a couple fewer games, what happens is their thursday through tuesday for week 14 will actually set a bet mgm record. >> wow especially -- i mean, as things are shutting down, that's what people are looking to do kind of like the vix, right,

higher volatility for options kinds of makes it more valuable because you get more opportunities. >> as long as the games aren't outright canceled because that throws everything in flux. and then the sports books have to go back and figure out how do our rules apply to the wets that were made? when do we refund? when do we keep it it becomes a mess. >> contessa brewering thank you so much. that which is a it for "the exchange," everybody "power lunch" picks thing up right now. kelly, thank you so much we will see you in just a minute welcome, everybody, to "power lunch. here's what's ahead on a very busy market monday it is a market selloff covid cases spike amid talk of monetary tightening, tough environment for investors. and this hour we will try to make sense of it all, tackling stocks, oil, wig tech, retail, among other things also with us, a bond market power player, pimco's jerome