unloved. >> serat, happy new year. >> you too. i'll see you he joe, in the not -too-distant future. >> happy new year. see you later. bye, everybody now it's time for "squawk on the street." good monday morning, welcome to "squawk on the street." oil jim cramer and david faber have the morning off we're coming off the s&p record close on thursday, the 68th record close the 2021. our road map begins with airline stocks flying lower, with the surge of covid cases leading to thousands of cancellations. >> plus another rough day with chinese tech stocks.

and elon musk's close encounter. we have the details. carl >> guys, that omicron variant pushing daily cases to its high it's level in nearly a year and disrupting company, including airlines, 2,000 flights have you canceled since christmas eve they're all under pressure this morning, scott, leading to a discussion of what is a reasonable quarantine time, and speak from personal experience, believes it's more mild and people should be able to get back to work sooner than later. >> back to work, back shopping you know, to your point, the quarantine period is open for debate everybody from dr. fauci has

been talking about the severity of omicron, and how quickly it's spreading, what it alls means. you mentioned the fact, okay, we think it's less severe, and that's the reason why you led with the first thing you said this morning that's that the s&p is trading at a record he, despite what we're looking at cruise ships suffering outbreaks in florida and elsewhere those stocks are lower, but for the most part, the market has had the ability to look past most of that. >> the santa claus rally has been a thing almost every year around this time, but it feels eerily reminiscent, where you're seeing them almost focused on the follow years' optimism yes, we see that in cases like yours, carl, thankfully, and jim cramer, that omicron seems to be mild we hear that anecdotaanecdotallt for the young children and

people immunocompromised, there's a sense we don't know how it will take hold. especially because society african scientists have suggested maybe one of the reasons it was mild they are is because so much of the population had already been infected 70% had prior immunity so they're waiting to see some of that data perhaps that's one reason that dr. fauci said he thinking it might get worse before it gets better. >> with many, many more people with a less level of severity, that might neutralize the positive effect of versus less severity, and we're particularly worried about those in that unvaccinated class that, you know, tens and tens of millions of americans who are eligible for vaccination but not vaccinated, those are the most vulnerable once when you have a virus that's extraordinarily effective in getting to people

and affecting them the way omicron is. >> behind the scenes, senior administration officials have a fingers crossed mentality that they're hopeful omicron will lead to more herd immunity, possibly tampling down on inflation. you tweeted something from j.p. morgue, and ron klain liked it, so i think there's a hope that that is the case, carl, even if it's not exactly scientifically known as at this point. >> just a moment pm note out this morning, scott, we don't expect omicron to impact the growth outlookin any significant way, but real accelerate an end of the pandemic by crowding out other variants it is interesting to see these studies trying to come out university of texas with a study oy saying peak omicron may be january 18th to february 3rd tom lee's firm, our model suggests surges to 395k a day,

obviously a high number, but peaking january 9th. that's why tom believes the market bottom is already in, in his view >> and we're close to he yearend target all right, speaking of tom lee. so there we are, about 75 points a away from tom lease ', is guess you could call it a base case it's, you know, you guys know better than me here, i live in the state of new jersey, you've got report cases here, seemingly record cases everywhere, but at this point, we're focusing on the kind of studies and data you just mentioned. okay, maybe it peaks in 2, 2 1/2, to 3 weeks, the market is look to go that point.

people like tom lee are looking at it as well. kayla, i do wonder, in some respects, as we talk about the s&p 500 hitting the new highs, if this is the last burst, if you will, before we get into 2022 and then you have to face some real serious questions. the fed is going to be an issue. you're going to have a more tight fed. that's going to be an issue to contend with i feel like maybe this is the last burst we get to celebrate before the tough times start rolling. >> you're hearing a lot of that, scott. it's not only the specter of the fed, where they could potential get returns, but you also wonder what sort of economic data we're going to get in the next several weeks as we've been seeing all of these restaurants closing, because they have positive cases among their staff or airlines

cancelling flights, because crews can't staff a lot of the travel that people are wanting tots even other trying like banks, where people are saying we can't bring people into the office we have to revise plans, people are calling out sick they're in self-isolation, what if any, impact that will have on activity and growth as a lot of competeses flying about i the seat of their paints, trying to figure out what policies need to be changed and what staff they are actually working with. >> a tough year to be in hr. >> you can say that again. >> changing protocols, changing policies i saw morgan stanley had data out last week, looking at 61 -- and a the lion's share is what we call hybrid there's not a commitment to return to office, and you can

understand week. moderna facing shareholder pressure now over the cost of the veeck, trying to get the company to cut prices. scott, get production to poorer countries. if you're a beer on the omicron narrative, and that is that emerging markets being less vaccinated creates more variants that eventually make their way to the developed world, you will want to see that production, even that trademark to get to parts of the country in which the vaccine wasn't necessarily invented. >> moderna i think will make the number $93 billion if covid vaccine sales next year alone? we're talking about omicron today, who knows what we'll be talking about tomorrow, the intense pressure seemingly from a whole cohort of people, whether it's lawmakers, and then shareholder groups and investors who are talking about the pricing of their sleeks, and

also spreading production around the world. you know, where is the stock right now? $242 it's not down a ton on this news as long as omicron and the covid in general remain a story, kayla, you're going to be talking about shares of moderna. >> yeah, and interestingly, scott, it's uk shareholders bringing this push back to moderna. it's been opposing the waiver of some of the intellectual properties to get these to manufacturing in these countries. for now, let's turn back to the broader markets with futures indicating a slightly higher open joining us is citi global wealth, and fidelity macro dri dribbler yurien timer.

steven, i'll start with you. both scott and carl with providing data, making the point that possibly the bottom is almost in the market >> the bottom was a long time ago, if you think will the small amounts of setbacks we've had, the very also we've had we've seen in terms of restraints, but this was a year past report-high adopt profits. we were talking about going back to the office or not, you know, what could corporate america not like so we think the year ahead is going to be one of less progress, but progress nonetheless, that we have had extremely easy fiscal policy putting a lot of money in the economy that nobody really had to work for that's all now slowing and a normalization will mean some profit and market

gains. >> so dr. urrien, how much do you thing the gainsboroughing from next year >> i think the market is on solid -- we've had some damage underneath the surface, but the s&p is up about 25%. it's not all about the megacaps. the s&p 500 equal weighted is up um, and so, i think this market looks have i good. even though we've had a massive run, when we look at the numbers for next year, you know, we could still see 8% to 10% earnings growth that points still to higher prices, you know, based on the discounted

cash flow model. it was about 4900, so i think we're in a solid mid cycle phase of the market, we're no longer early cycle, but not quite to late cycle yet i think that's a period where the market can stay in place for a while. >> steven, i'm curious what you think of what jurrien had to say. on the one hand, as i mentioned earlier, this feels like it could be the last burst before you have to face some serious issues in the market more hostile fed, higher interest rates, though you're still going to have an incredibly strong economy next year all of these stories we talk about, whether it's delayed return to the office, or delay in getting back to some semblance of business travel, or delay in spending in any way, shape or firm, once you get back into next year, and yes we open

we are past this, the economy will boom. won't that offset some of the negative effects >> i would looks at this this way, artificially depressed, trying to prevent the spread of dough individual, we had maddive stimulus then we did it again covid has had less and less impact on the economy. having omicron extremely contagious, lapping the winter months, this doesn't feel very good in the near term, but as you said, markets can probably look past that during the worst of delta, the u.s. was still growing in excess of 350,000 jobs, but the macro stimulus is really in the rear-view mirror we've had nothing coming out of the white house or congress that looks anything as robust as the spending support we had that

gave us a gdp the federal reserve will go from a period of financing all net new bond issuance, right, with made up money. people can make a bearish narrative around this. we don't think that will be the case, when you think of the last cycle of fed tightening, we have an 11% return in stocks annualize. i don't think it's going to be quite so robust. when you heard some of the earlier narrative about very strong high levels, lots of other damage beneath the surface, around the world, a lot of assets don't look as rich, but we still have an environment where it's going to be hard to repeat the gains we just had behind us, so i think combining

a less aggressive fed, a less aggressive fiscal push, and believe it or not, as horrible as it is, covid again had very narrow effects on the economy that were very kind to financial markets looking behind us. we're going to have to have a little more care to risk management over the year. >> finally, jurrien, it seems like a lot of note into the end of the year are talking about market concentration, very narrow leadership, obviously how much is riding on leadership broad broadening in january right now? >> i don't think too much, but clearly when you look versus the airline stocks and their relatives performance against the tsa checkpoints, there's a very large gap there, the reopening stocks should have done a lot better. they haven't maybe that's a big theme for

222, but otherwisi it's easy to bet against the big grower,s, and the rest of the market is so forgotten, if you will but those companies generate the free cash flow that investors demand i'm not willing to bet against them, but we had the reopen trade, the growth to value, and certainly large to small that completely reversed last year i do think that the stage is set for another iteration of that maybe once omicron starts to crest. >> we will leave it there for now, steven jurrien, if we don't see you later this week, have a happy new year to both. sales rising at the fastest space despite the reply-chain kalings. a look at the futures this monday morning, the last monday of the year, as we look to continue what was a record close on thursday on the s&p

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glass shoppers shall lugging off higher price with his holiday shopping rising at the fastest pace in 17 year. new data from mastercard spending pulse showing an 8.5% spending rise. they were shopping however you had to shop. if you want to do make sure you

got something, you started your holiday shopping earlier this year you still went to the mall if you had to you did whatever you had to do, and it showed up in the numbers. >> there was something for everyone i did a personal on the street little safe lynx it was bumper to bumper throughout washington, d.c., whether it's curbside pickup, inside the stores, ordering online, it was bustling, but about a month ago there was hand wringing about supplying, and whether inventory would be on the shelves for consumers. the administration was saying, if you want to ask about your christmas packages, call fedex, u.p.s., the postal service 97% on-time, so credit where credit is due after a really different logistics season for a lot of these companies who kept items on the shelves, so that the data, carl, looked the way they do and we're reporting

about it now >> yeah, that data from shipmate tricks, u.p.s. and the postal service, actually fedex was a bit behind, but still at 97% it's a real comment on the american household balance sheet. i would imagine as we move into the new years, a bit more discussion about saving rate coming back to earth, credit card balances coming up, what happens to that excess cash we had built up as a result of some stimulus payments and wage increases, and how far does that again americans in a new years >> i feel like it's a commentary on the balance sheet, looks pretty good, but also the psychest and sentiment that people are just sick and tired of covid, you know they're going to go out and spend for the hole dates it's just a fact, right? you're just tires of dealing

with the negativity that comes with all of this over the last couple years it's the holiday period, as i had, yes, you may have to pay more for things because of inflation and you're more concerned about supply chains, but you know, come heck or high water, you're going to spend on what you wanted to get and if it was online, and some of the online sales, i'm sure were red-hot, too, whether you had to go there, with a mask or without, or however you did your shopping, the numbers turned out to be the strongers in 17 years? i think that says balance sheet. that says psyche, too. >> with gatherings back on the table this year, people were gathering in larger family sizes, you buy more gifts, more food to put on the table for them in many of those cases, though, carl, we're still waiting to see what portion of that balance sheet was spent on rapid tests ahead of the gatherings this holiday season.

>> no kidding, and it will lead us to discussion, maybe about child tax credits as we move into january as well. still to come on "squawk on the street", it's been a rough year wfor chinese stocks we'll take a closer look at that. and futures on this thin holiday trading day, still showing a slight santa claus lls ter record highs last week more "squawk on the street" when we return. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today.

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>> announcer: the opening bell is brought to you by -- what a year it's been for chinese tech it seems like, kayla, the year has been summed up in a couple baskets, one was the surprise regulatory endetection, like gambling and e-commerce, for-profit education, but also the erosion of the relationship between the two countries. this morning "the f.t." has a

piece about china blocking them from selling their shares. >> and it comes as chinese security regulators have been investigating didi what is most important about the slide is that normally you see stock go down, because now it's going down because -- >> yeah. remarkable story, obviously china will continue to be a huge story in 2021 for a variety of reasons. there's the ohm bell and the real-time exchange it's bank of america celebrating its 9th annual winter village in new york city, and it is nasdaq. it's at the u.s. postal service, and congratulations for making sure the worst of the supply-chain delivery system did not come to pass this season.

>> >> no, for sure we'll keep our eyes certainly right off the open on the airline tox. there are the major averages that's good for about 18 points. here's the airlines share, down across the board, as we're talking about traveling, flights being canceled, crews -- from that standpoint, you can show up the cruise names, two, as we're sees headline after headline, with cruise ships with a bunch of cases developing there. they're peeling back a bit, more son that the airlines. it's the cruise business you have to keep an eye on this morning. >> yeah, at least three ships with cases, though despite the selling, i think we got an intraday high on the s&p

this would be the first intraday high since november 22nd scott, we've been talking about santa claus rallies for a couple months, would there be a meltup, and what kind of conditions would you need first new high in about a month. we'll probably take that despite the caveats about trading this week >> i think so. for a while it felt like we might not get a santa claus rally at all we're also, you know, sitting there worried about what the fed chair was saying on the hill, and then they had the actual meeting. it's definitely looking like a tighter fed. it looked like santa claus may not show up with the fears, but the opposite has happened. you do have the most volatile in december in a few years. i wonder what that portends for the early part of 2022, dalea,

whether some of the volatility subsides or we're going to be in for a few weeks, if not a few months, of more expected volatility in the market >> scott, i think everything at that point will depend on where omicron is and what companies say about their earnings, whether they have been able to weather this recent surge of dough individual surge some of the early data we have seen from mastercard spending pulse, shipmate tricks, others we've been citing, appear to be positive the market appears to be positive, but have companies been able to manage through this volatility going into the end of the year you think about the airlines, too, yes, they're sliding about 1.5% again this morning, but this is an industry that's been right-sizing its workforce the last two weeks, and you wonder if they can go into a surge in

travel next year with the right-sized workforce to accommodate a surge in demand. so a lot of that will come out in earnings season in the next couple of months that commentary will be just as important as ever. we should also mentioned go daddy jumping about 4% in premarket action let's see where it is right after the open there was some news reporting that starboard value took a 6.5% stake in that company, seeking changes there, and of course we'll probably hear in regulatory file,, exactly the goal of that, with the $800 million stake in godaddy pushes those shares up. >> interesting move from a pretty active activist icahn is still in the news with

southwest gas and the tender he's trying to do. they keach giving him the heisman. i won't are what activism will look like in the new years, given valuations and what the fed may do, and how investors see the landscape. carl, s&p is good for 22 the dow has a triple-digit gain off the open. >> yeah, thank you to apple and to cisco and microsoft apple getting sort of needled with some headlines out of dutch regulators arguing the app store needs to allow dating apps to allow alternative payments, which is not a new story, but continues to go tweaked around the world, but remarkable just the share of the burden, scott, among these giants, where i know you've had how many conversations on the half about the law of large numbers, and

how much can you count on growth where new businesses are just a drop in the budget relative to overall revenue, but apple has been a story it's not 182, but back to 178. >> it's not that far away. i'm almost tired of asking the question, you know, to people on "halftime report", whether it's my investment company or otherwise, are we too top heavy? this stocks have become defensive names, ports in the storm. yes, you say, okay it looks too top heavy, but as we've seen, it can remain that way for a while. the lone why, other than tremors here and there over the last, you know, few months while you've had they rolling corrections, carl, underneath the surface, as so many stocks have gotten absolutely obli obliterated. the reason why the overall market hasn't had the worst correction is these markets

won't correct. many are still deemed to be cheap, or certainly cheaper than some of the more high flying names, and then you get the defensive nature as well, the tried-and-true growers, growth at a reasonable price that you hear about it's no wonder why these stocks are the ones that people gravitate to >> scott, the regulatory cloud looms for next year, europe's digit at markets and digit at services will come into force in some form in the second half of the year not blumenthal basically going on the report. notes there's bipartisan support, as support remains elusive for the spending package. perhaps we could discussion a different form in the coming

weeks, but voting rights is elusive. immigration is illosive. where support on either sigh of the aisle is questionable for each of these priors but blumenthal nose that it's an area where there is support, essentially challenging the administration to get behind it. even though there are privately concerns about whether that would hurt growth, if you do that >> you're talking about these stories, and we show a chart of meta, facebook, right? i was waiting for the chart to come up so i could see year to date, and it's up 25%. i think it said, year to date. it's the stock that's always been in the crosshairs of lawmakers, you know, they love throwing darts at it, and yet the stock, despite the fact it does have some pullback in the chart we're looking at, it's been a darnell good year

why? its business model trumping all the concerns about the regulatory issues, whether it's a due oply in the advertising market you have to throw a lot of stuff at the stock, and i think there's belief in the market, no matter what lawmakers do, they're not going to do anything certificate numb to disrupt the business model to keep invest areors from buying the stock whether it's the whistle-blower or everything else, and is it doesn't seem to matter in any great degree >> yeah, one of the leaders of the ndx this morning, as you say, up almost 3%. with the 320, we wonder if that was the bottom, that's where the whole blower was making the biggest headlines, but it does bush whether tech regulation in aggregation is the boy who cried

wolf, because congress can't seem to wrongle and circlethe wagons for a sustained period of time i also wanted to get your take whether or not some of the bullish action is due to the belief that some form of build back better gets to the president. whether or not there's a number and a structure that the bring as open door to senator manchin, at least. >> and there's some who are saying that senator manchin cried wolf i think there's discussions about the size and specter of that package there's an article in objeaxios. the administration is coming under pressure for a of the programs that are ending, like the child care tax credit and

the student loan pause, especially with the omicron wave as the backdrop, but then again you have president biden saying voting rights, there is nothing more important than that if you have limited political capital, where do you go with it with your campaign platform, or regulating big tech, which as blumenthal says, has bipartisan support, something like voting rights we will see exactly what they decide to pursue surge those conversations are happening behind the scenes, but i think the reshuffling of the deck already happening as soon as we see some lawmakers coming back to washington, carl >> guys, in terms testify the laggards this morning, at least on the s&p, interesting to see some of these names, scott i wonder if this dynamic will last through the rest of the week, but take disney, for example, one of the biggest losers on the s&p today. some of the names in telecom,

our own parent comcast charter is in there as well. years have been challenged from a stock standpoint, but how much of these losers get jettisoned going into year end before make renewed interest in january. >> when you're talking about telecom, that sector had one of the worst ends of a year that i can remember there's disney, as talk about media is anything did i relying too heavy on its franchises? the great franchising that they are? does it need to increase spending, carl, in a much more dramatic way to try to get

subscribers to disney plus and beyond, and spend on programming, beyond just relying on the franchises that have been such a good boon to that company? those are the critical issues we'll be talking about, moving forward. >> yeah, as well as the slate for 2022 we haven't yet mentioned "spiderman" the only billion dollar film of the year. and there's more if omicron does flush through immunity, then theaters have a green light, you may look at disney in a different way. tonight, don't miss our cnbc special "your money 2022" hosted by our own wilfred frost at 6:00 p.m. eastern time today. a pretty light calendar this week claims on thursday, chicago pmorr i on thursday as well, but the ten-year now below 1.49.

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travels names among the laggards this morning. the cancellations, the concerns about cases on cruise lines have most, i would say, the top 10 or 15 losers are at least somehow related to the travel industry boeing is not far behind more "squawk on the street" continues in a moment. don't go away. (swords clashing) -had enough? -no... arthritis. here. aspercreme arthritis.

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travel stocks looking to bo bounce back in a big way seema moody has that story for us seema, good morning. >> the industry is tracking the latest flight cancellations and how that could have a knock-on effect on the broader travel landscape. leading to fewer travelers checking into hotels the rise in covid cases challenges the cruise lines. three ships over the past week returning to florida with positive cases on board. separately, a holland america ship returning to san diego after being denied entry into

puerta vallarta after a small crew tested covid post stocks posting big gains, following the comments of ceo of carnival that said that omicron has tloeds a small spike in cancellations. the question is, will that hold as more ships disclo positive passengers, is the research less severe, discouraging fewer travelers than earlier covided waves. an increase in the number of respondents concerned about being quarantined on a ship. carnival, royal, norwegian cruise line, trading down around 2% to 3% this morning. going into 2022, analysts at truist, patrick shoals, preferring norwegian to the rest saying it has a greater exposure to the higher-end cruises. speaking of high end luxury travel, a number of ultralux properties are coming to market next year. we have conrad's resort in mexico, hilton mall dives set to debut in spring 2022

covid is not slowing down the pipeline of hotels being constructed which some would read as a bullish sign for the broader recovery in travel hyatt following its acquisition of apple leisure group scott? let's bring in raymond james analyst now. good to see you. >> good morning. >> the cancellations not with standing, how does demand look and how is it being impacted by omicron f at all the tsa numbers that i saw, certainly pre-holiday period, look pretty good relative to 2019 >> exactly you make a good point, scott the pre-holiday, you saw tsa numbers that were 80, 85% of 2019 levels. we don't have a lot of international travel and some business travel happening right now. over the holidays actually it got close to 95% the demand side of things is

very strong and people are willing to travel. i'm sure there were probably some trips that were canceled because of omicron, but generally, i think the demand is really strong here from the cancellation standpoint, i think -- >> so what -- >> go ahead. >> forgive me, i thought you finished speaking. i wanted to ask you about the cancellations and what the bottom line implications are going to be for the airlines, assuming that it continues to some degree for the next few weeks? >> yes this is -- that's exactly right. if you look at the actual numbers, if you look at it across all the major u.s. airlines, cancellations are about 5-6%, ticking up to about 7% yesterday looking at the u.s. airlines the risk here is, you know, if there's more winter weather, you have more absenteeism because of omicron and crews having to quarantine here for about 10 days the risk is, you know, you start getting close to timing out a

cruise you see towards month's end. we're keeping a close eye to the end of the year. i think the bigger implication for airlines is, as long as we have, you know, variants and requirements, quarantine for 10 days, regardless of the severity of things, you're going to have to have a higher level of reserves and crews that you carry and that's not good for airline costs or cruises if you're carrying more crews than you need to on a non-paid day they aren't going to be able to fly as much >> i wonder, how you'll be to capacity forecasts once we start getting the next earnings points material capacity itself to the stocks right now >> it's actually a little perversely, capacity is lower, there will be a better sentiment on the airlines. there is a concern, at least in the off peak, there's too much capacity here. if you look at the industry is

hiring and planning to train about 8,000 pilots next year, for example, one labor group there, and, you know, the last week they only hired and trained 5,500 or so pilots, so it's already constrained. i think if the airlines come to the decision they need to carry more crew members to meet the holiday peak, then i think you're going to have constraint capacity and that probably from a passenger standpoint translates to a higher fare. >> it's interesting because the airline industry received $50 billion in government aid and then some last year to keep people on its payroll, and then also, pursued buyouts for some long-standing crew members i'm wondering if you think that was a mistake to let many crew members walk out the door? >> hindsight is 2020 if you look at what was happening last year, it looked like people weren't going to travel meaningfully, you know, that demand levels would be down, i think we've all been

surprised how quickly the demand has come back this year. that said, i think beyond just that, the other thing airlines take into account is again, the higher level of absenteeism some gets resolved as we go through this, but, you know, just supply issues and a higher level of absenteeism among crew members, i think you have to carry more people than you normally would expect i think it's a combination of events that have happened here one, just being surprised by how strong the demand has come back, and, two, how many more crews you have to hold on to, to fly the same schedule. i think the airlines did the best they could. i don't think there's anything sinister in how they've handled it hindsight is 2020. >> appreciate your time this morning. have a good day. we'll talk to you soon >> thanks for having me. pretty good session setting up here as we mentioned, s&p all-time high, first time in about a month.

all s&p sectors are green except for energy and utilities you got the dow, once again, above 36k.

good monday morning. welcome to another hour of "squawk on the street. on carl quintanilla with kayla tausche and scott wapner david faber and morgan brennan have the morning off s&p all-time high today on this final trading week of the year as the bullish narrative from some strong holiday sales overshadows the omicron worries and the space of cancellations in travel. kayla? >> we're 30 minutes into the trading session now, carl. three big movers we are watching this morning airlines under pressure after more than 1500 u.s. flights were canceled over christmas weekend with more delays expected this week united, delta, american, and jetblue citing a surge in covid cases among flight crews and operation staff. you see those stocks down nearly 2% or more than 2% at this hour. cruise liners giving back games after a third florida-based ship

had passengers test positive for covid-19 over the weekend and those stocks down in the 3 and 4% range finally keep an eye on oil, volatile as all these travel headlines continue to impact demand expectations into the new year wti down about a fraction of 1%. it is giving back some of its losses from earlier today off the lows that we saw this morning when it was down nearly 2% and we'll see where it goes for the rest of the session. as investors weigh the impact of omicron, the economic outlook continues to change. senior economics reporter steve liesman joins us with a rapid update where are we right now >> changing as we speak, kayla, between the flight and concert cancellations, forecasters are changing their outlook almost as fast as the news is coming in and the virus is spreading forecasters sent in their estimates for our cnbc rapid update, there could be more changes to come. this is where they were right at

this moment. fourth quarter growth holds up well gdp expected to be near 7% it's been marked down somewhat, the first quarter outlook has taken hits as well with the general trend for economists to push growth into the second quarter. from jefferies wrote, spending is likely to slow further into december and contract in january on the back of omicron and the cliff in child tax credits concert cancellations can be rescheduled. going home for the holidays comes around once a year and likely to be a permanent lost economic activity. money people will spend on services could now go to buying goods boosting already high goods inflation. the headline inflation in our cnbc rapid update, seen peaking this quarter near 6%, gradually coming down over the next several quarters, but only by 2023 does it get near 29% target, though slightly above it at 2.2%. short end of the bond market,

trading today like inflation, sticks around and prompts the fed or keeps the fed on plan to hike in march. it's not treating this outbreak so far as one that will depress demand, much to reduce inflation. carl >> yeah. i did notice the short end this morning, steve good stuff thank you. steve liesman. here to help us break down where things might be headed next, barclay's and ally invest. maniche, i wonder to steve's point about omicron and the obvious knock to some activity, whether that's in services or not, should the stock market be reflecting that more acutery do you expect it to? >> i think the short term it could be a little bit downside from here. i think people are looking at what happened with delta and just given that delta was not such a big concern, i think most investors are thinking maybe it's not going to be as transmissible and the difference this time is that when delta was

happening, the fed was firmly on pause. now we have the fed hiking i think that is the key concern here, that as now they have to balance the high inflation that we talked about, along with the potentially soft patch driven by omicron. i think that's what makes it a little bit more volatile >> right lindsay, how much risk do you think that infuses into at least q1 trading >> yeah. i mean, i think q1 trading is going to be volatile it was always going to be volatile given the uncertainty that still remains around the fed policy tightening plan we don't know exactly when they will start or at what rate they will continue to raise rates, so that's going to be a key focus omicron right now, it's just a reminder that the covid crisis really is what's going to determine the trajectory of the economy and earnings in the year ahead. so that's something that we're going to continue to watch that being said, i do think that

this is a delay or a kicking a can down the road with regards to growth, not necessarily a growth shock that we're going to experience, and perhaps the market is already price setting. if you remember when the omicron variant started breaking out in the u.s. late november, early december, the market was very volatile and took a hit before bouncing back and continuing to be volatile through the month of december, even though the overall market has done well over the past month, there is has been a lot of damage underneath the surface and i think that investors have prepared themselves for a slowdown in growth in q1 at this point in time. >> maniche, where do i want to be exactly in the market if you're right, if the fed is going to be tighter, in 2022, high growth, high valuation technology stocks, the nasdaq 100 names v a lot of them come down enough? have their valuations been reset

enough that i feel safe buying those stocks in the kind of environment you anticipate in '22 >> i think so. so i think it depends, not on all growth stocks are reasonably valued, but if you look at in particular, the interesting thing there, they're trading at not too high a premium, relative to the 2019 numbers. you can say that perhaps even go back to normal and basically go higher, but it is hard t believe the market share, all the gains that they have made since then, should not deserve high valuation if you're comfortable on that front, going back to the rate story, i think tai it's a story people talk about but high rates are backed it has been true for the last two years or so. if you go back a few years back or even longer, it is just not true, that the high rates necessarily hurt growth. just go back to '17.

rates were going up, yet growth continued to out perform so there is some link, but the link is tenuous. we're not that worried about high rates for growth stocks. >> what about you, lindsay >> yeah. you know, there's a lot to talk about what to do with the tech sector of course the valuations have rerated rerated since the pandemic started and the whole market multiple has moved higher. if you look within tech, within some of the growth sectors, i agree with maniche in that i don't think you need to bail on all of them. if you look at the f.a.a.n.g. names, some of the largest names in the markets, while their multiple has increased over the last two years, they haven't gone -- they haven't shot up like some other industries within the tech sector if you look at software, some of the semiconductor names, the multiples look more stretched than the f.a.a.n.g. names. the f.a.a.n.g. names are those names that are much more

consistent with steady growth and good cash flow while interest rates do pose a risk as they continue to move higher, don't forget that interest rates are dpoptsds remain low by historical standards and may not even reach the rate at which we saw in the last tightening cycle. that could bode well for the tech sector. i don't think at 30% of the s&p 500 index, i don't think you can avoid the tech sector by any means and i think when you're in this mid cycle, tech can actually do well here. >> let's be clear, too, lindsay, i am specifically talking about the highest of valuation and highest of multiple technology stocks, right. i almost separate the f.a.a.n.g. stocks you're talking about and say we know all the reasons why they're going to continue to do well and investors will continue to gravitate towards that. i'm talking about some of the, you know, extremely high priced to sales stock, some of the enterprise software names that have really suffered in the

volatility experience that we've all had over the last, you know, couple months. do you feel safe buying some of those stocks in to 2022, the ones most sensitive to higher interest rates >> no. i completely agree with you, scott. your point is well taken these names that have bstretche and their valuations show it they will have a tougher time as the fed begins to start tightening the market is going to wait and want to see at what pace the fed is going to increase rates going forward. that's also going to mau a role. but that first rate cut when it does come in the first or early part of the second quarter next year, it's really going to play a tool on these stocks you will see them remain volatile going into the hike and see them hit hard when the hike does happen looking at history. >> from a macro perspective, there seems to be two schools of thoughts one hand, the economy is a coiled spring that is going to

just explode later next year when covid is officially over. on the other hand, you know, there are some who say that potentially we could see earnings growth be pulling back a little bit and with the rate hike and all of the other moving parts in the economy, that perhaps growth could begin slowing. which are you in and how is that affecting your thesis here >> i think that's a great question and i think we really need to distinguish between two kinds of economies here. one, i think you mentioned earlier, about the good inflation. we need to distinguish between goods consumption the coil is true about services which services consumption has substantially lagged for obvious reasons over the last year and a half however, goods consumption has really been very, very strong. what we have seen, what we have shown is that corporate profits are dictated by goods

consump consumption rartser than services that is what caused earnings growth to be spectacular and continues to the upside. the key question is, unless you're telling me that american consumer is going to consume 10% higher relative to a permanent basis you could have a reversion in goods consumption in that scenario, you could really have -- it really depends on how quickly that happens, of course, but if it happens quickly enough, you would be in a highly unusual scenario where you could have positive gdp growth driven by services, yet you could actually have negative earnings growth because goods consumption is coming back so i think to me, that is the main dilemma here right now, that it could have strong gdp growth, but slower or negative earnings growth. >> yeah. that would be very interesting and very strange, but certainly we're in a period where there's

not a lot of analogs to the environment we're in appreciate it very much. great discussion thank you. appreciate that. as we go to break our road map for the hour as we go into the final week of 2021 a look at one of biotech's biggest winners. plus it's been a wild ride for ipo investors. don't miss the playbook for 2022. >> from airlines to cruise lines, a check in on the spaces they continue to see pressure due to omicron big hour ahead don't go away.

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holiday sales rising at the fastest pace in 17 years courtney reagan has the numbers for us hey, courtney. >> hi, scott supply chain and covid worries put it all together didn't matter for the 2021 holiday season it was a strong one for retail total retail sales up 8.5% over last year. that's in store, online, and across all forms of payment, from november 1st to christmas eve, according to mastercard spending calls extending the holiday season dates earlier and retail sales were a touch stronger up 8.6%. many shoppers we knew took advantage of the early deals to make sure the gifts were bought before stock outs soared shoppers returned to stores and kept shopping habits online too. in store sales for more than 8% over last year e-commerce up 11% over 2020. online sales ended up making up almost 21% of total retail

sales. it's up from 20.6% in 2020 and 14.6% in 2019. so a pretty big jump if you look over two years apparel sales growing an impressive 47 plus percent followed by jewelry at 32% department store sales gaining more than 21% and the always popular electronic category saw sales increase more than 16% again from november 1st to december 24th. now the season isn't necessarily over this is a really big week, of course, for retailers to entice shoppers to make exchanges instead of returns and consumers to cash in gift cards. some of the names trading higher, chewy, costco, ross stores and ulta in response to the retail sales numbers and perhaps some hope for the future of sales to championship remember, you can't recognize the revenue from the gift cards until it's cashed in. scott. >> courtney, i'll take it from there because i have a question on the early read on returns because i think a lot of people

a couple months ago anticipating that maybe they wouldn't be able to get their gifts in time for christmas. placed early orders, maybe orderd a few different sizes and a few options because they just wanted to have a bird in the hand and i'm wondering if you think we'll see outsized return because of that? >> yeah. i think we probably will see that activity because of that and mort we shop online the higher the return rates are. it depends on the categories but something like shoes or clothing have return rates between 30 and 40%. maybe you ordered two or three different sizes not exactly sure, and maybe at most you're going to keep one, right, when you figure out what the right size is for you or gift recipient. plus it's been brought to my attention a number of folks had to cancel their holiday celebrations because of the omicron outbreak pransds they had a gift that now they're not actually going to see the recipient, do they hang on to

it, ship it or return it we have to wait and see. a love lot of people in the d.c. area had a quarantine christmas. an unfortunate reality of our times. thanks as always >> here to help us break down the space is oliver chen your immediate takeaways from this holiday season? how did it look. >> >> we're cautiously optimistic on the one hand, why are we cautious inflation is 6 to 7% savings rate is something we're looking at as we think ahead we would own defensive names with lower beta and higher dividend yields that includes walmart, costco and target we're focused on the luxury industry jewelry has had an outstanding year and gift giving and luxury ideas, lvmh, restoration hardware and others as well.

>> were there a lot of retailers in the mid section of the bow tie that you think stopped investing in services like curbside pick-up or delivery because they thought that that wasn't going to be a thing and maybe they got that wrong? >> well, curbside has seen increased deduction across specialty as well. what really happened during the pandemic is, you know, curbside was so powerful with walmart and target and america has become used to this and been happy with this service if anything, we've seen increased in the variant concern heightened the issue around safety and the omni enabled models are important as we think about the variant there are a few things we consider one, we would own stocks that participate in multiple categories, broadline such as target and walmart, and two, as you spoke about, curbside pick-up, omni, buy online, pick up, ship from store, those are really important features as

well and then dividend yields, thi thinking defensively we would think about that as well >> oliver, i wonder if you're leaning into a basket that is about staples or about discretionary? we've had multiple conversations about whether balance sheets take a turn for the worse in 2022, given inflation and given stimulus payments that were lapping. there's an argument on the street that we're going to be buying things we need, maybe not as many things as we want. >> yeah. that's a great point as we think about inflation and inflation running at 6 to 7%, inflation resistant or more inflation ideas include luxury ideas such as lvmh, louis vuitton and restoration hardware and williams-sonoma. on the other hand defensive names, names with lower beta, lower standard deviation, lower risk, higher dividend yields that would be walmart and target so there's two ways to play what

you're saying and something we're closely looking at discretionary, your question around discretionary, the ideas we like are macy's and kohl's. the consumer remains strong, cautiously optimistic, and the valuation opportunity selectively with p/e ratios at 10 and below look like good opportunities to us. >> oliver, it's scott. you, frankly, sound a little more cautious than i would have expected given the kind of numbers that we just did if we're doing the kind of numbers we did with the most contagious virus we've ever seen out there, what are we going to do on the other side of it >> yeah. supply chain constraints and consumer demand, consumer demand remains very strong, but we're cautiously optimistic because the traffic has decelerated a little bit in december, and this ongoing inflation as well as the

supply chain, watching that will be things for us to pay attention to on the positive side, consumer demand, the markdown levels, the levels of promotion are the lowest we've seen in five years and there's been constraints here too big gift giving season really is sort of mixed here >> all right we'll leave it there for now oliver chen, senior retail analyst, thanks. >> great being here. >> all right kayla, thanks. cruise stocks under pressure this morning on pace, though, to end the year in the green. don't miss top picks for 2022. quk t see bk "sawonhetrt"acin two minutes.

cruise stocks one of many travel sectors seeing an impact of omicron here to talk where things could be headed, equity research managing director patrick shoals patrick, did you see the current state of affairs as a when, not an if? >> well, i mean, if you believe that, you know, you're going to get this variant every time it gets cold outside and people go inside, unfortunately it seems

to be a win, and that's a concern, that, you know, it could kind of -- thought we were out of the woods several months ago and here we are back in the woods, not as bad as we were a year and a half ago. i think i do have a long-term concern here that every time you get this variant popping up, even though many people are asymptomatic, you get people sick on a crews ship and you get these media headlines like we've seen the past couple days, it brings up some long-term concerns here of what's happening for -- as it relates. >> the carnival "freedom" was denied the ability to dock at two specific ports and gave passengers a $100 gift voucher according to one of those passengers who posted the letter from the ship's captain. i'm wondering if you think that's appropriate compensation and how costly this is going to

be for each of these companies >> i guess the compensation depends on what you're paying per day. right now, cruise -- carnival cruise vacation is probably -- could be less than $100 a day. i don't know if you're going to be making money. it might actually be appropriate compensation and it's not like you don't have tons of activities on board to do and, you know, the food is -- the food and the buffet is included. probably for that type of ship it probably is appropriate, you know, what is the right amount $500 probably not 100 seems like a ballpark number i'm sorry the second part of your question -- >> we talk about -- >> i was going to say, we talk about the industry challenges with regards to omicron, as sort of a solitary thing, but i wonder, how do you think about the individual players, at least among the majors in terms of

their network or their demographics or pricing or things that make them somehow unique in this industry and, hence, would lead you to a favorite or two? >> well, to be honest i don't have any buy ratings and i don't think i'm on here this morning to say you have to buy at this moment, but i will answer your question fully in a second. i have concerns right now what's called the beginning of wage season, where there's a tremendous amount of bookings happen now for the next couple weeks and these media headlines are not good for anyone. what i've been saying is, we certainly see better demand trends for the higher-end cruises, where people are more certainly possibly more likely to be triple vaccinated, the ships tend to be smaller, you have more room to spread out and certainly norwegian has the greatest exposure to that. even though i don't have a buy rating on norwegian f i did have

to pick one to be favorite, it would be norwegian. >> speaks volumes that you don't have a buy rating on any at this moment we will see if that changes in the next few months. for now, we'll leave it there. patrick shoals, appreciate it. >> thank you let's now get to a news update with rahel solomon. rahel? >> hi, kayla good morning here's what's happening at this hour flight cancellations and delays continue to disrupt airline travel this morning. bad weather in the west now adding to problems caused by covid-related staff shortages. according to flight aware global count, 6600 flights have been delayed and 2400 canceled, just today. 8,000 flights were canceled friday through sunday. dr. anthony fauci says this morning that u.s. covid infections will continue to surge for a while. he told cnn that the u.s. had 214,000 cases on sunday. fauci says based on what's happened in africa, he hopes that count will peak relatively

quickly and then decline in the u.s. he's also seeing very early indications in the u.s. that omicron cases are not as severe as what we saw with delta, but he still urged americans goat naitd and boosted to protect hospitals from being overwhelmed. and in south africa, flowers for desmond tutu are placed outside the capetown cathedral he led as he organized campaigns and marches against apartheid. tutu died this weekend at the age of 90. more "squawk on the street" after this.

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♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq moderna one of the top stocks year to date, facing increased pressure over the cost of its covid-19 vaccine. joining us to discuss his outlook is jefferies michael ye, who has a hold on the stock. i want to start with the fact that you have a hold the stock has had an incredible year, though it's well off of its highs. why not buy it here?

>> great to be here with you i think there's two reasons. one is, i think that there is still continued uncertainty about where the revenues and where the need for ongoing boosters is every year and as you're watching omicron, even though i think a boost is needed, is milder and milder, i think there's a lot of uncertainty about the tail on boosters the second thing i think is certainly a much discussed topic which is valuation you know, close to 105 billion market cap, one of the largest out there, on a one product story. i think there's uncertainty going forward. that's why the hold. >> this issue of omicron being allegedly more or not as severe, at least what we think now given the studies we've seen, what does that do, do you think, to demand even if let's just say health officials say yes, next year, you're going to need a booster, is there going to be a negative demand effect from the fact that

omicron appears to be less severe, thus people will be less inclined to go out and actually get the booster and then the negative impact for moderna as a result >> well, i think you're headed along the right path you and i probably both agree, the peak number of vaccine use was probably last year, right. i think more than ever, more people ever got a vaccine was in the last 12 months each subsequent year, i think there will be lesser and lesser demand, due to the fact that it will be milder and milder and i think, to some extent, there will be additional competitors out in the field as well, something we haven't brought up. even though you might argue that half of the united states does get a flu vaccine every year, which is a lot, around the world that's much less the case and going forward here, due to the less severity each year, i do think there could be less and less use of a booster each year as well. >> michael, perhaps the tale is

short once all populations are eligible, but you have young children not available, and the moderna trial for children, full disclose sure my kids are in, is 14 months long you still have kids who are -- haven't gotten their first, second and third shots and pfizer is going back to the drawing board for dosing for that age group how big a boon do you think potentially opening up that population for eligibility could be for moderna, especially given that relative weakness of the pfizer data so far >> that's a good point and i do think that in the short to medium term, the use of vaccines in pediatrics and even infants -- i know the pfizer data as well and the potential approval of that in children younger than 5 years old is also coming -- i think that will be a short to medium term boost the key with the stock, though, and i think here on wall street is, the visibility on the future tail, the durability of that tail, and to what extent there

is demand. i think wall street quickly will move on from the surge and the use of that and probably, you know, searching for an additional pipeline issue for moderna. i think the debate around moderna, quite frankly, will shift from okay, there is vaccine use, yes, there will be each year, some vaccine use, but do tlhey have something else on the platform because wall street wants to see growth. we want to see if that platform can produce something else >> yeah. well and to that point, some of your peers on the street, i know bofa one of them, argued that this particular vaccine was a unique situation that they argue can't be applied to cancer or cardiovascular disease or other promising things you could do with this platform and that's why they're under perform. is that debate heated right now with regards to moderna? >> yeah. that's a great point yeah, they have a sell rating on it as well this is a debate that i think will last at least 12 months,

carl, and i think that has to do with the fact that the recent flu vaccine data, which came out a couple weeks ago and i know the stock was down on that data because it didn't necessarily say it was way better than the sanofi vaccines. there's a question of, okay, they have a large pipeline, is it necessarily much better than all the other vaccines out there, rsv another vaccine that pfizer and some pharma competitors have coming out, and i think what we're going to have a debate on over the next 12 months do they have something better, do they have other stuff coming in? until that plays out, i think the stock probably is going to be range bound to very uncertain for the next 12 months >> $250, almost 251, appreciate your time this morning michael yee joining us. it's been a record year, scott, for ipos as we know, but returns are at their worst levels in a decade don't miss the playbook for 2022 that's coming up next. and here's a look at what's coming up on "trading nation."

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2021 has been one of the busiest and worst performing years for ipos the question is, lu be able to get some discounts in 2022 leslie picker has a playbook today. >> this was one for the ipo record books companies and spacs raising $318 billion, the largest figure ever, even after adjusting for inflation. investors were receptive to new listings on average their debuts popped 22% since then the market has shunned them the mean performance for companies that went public this year not including spacs is negative 11% only 22% of new listings this year were profitable so the market sold them off along with their other high

growth, money losing stocks amid a shift in fed policy that could mean higher interest rates next year a weighted basket of 2021 ipos produced returns of negative 3.7% in a year where the nasdaq is up nearly 23% that dramatic under performance doesn't bode well for companies in the pipeline for 2022 since it's harder to coax investors to put more capital into an asset class that's been a negative source of alpha capital markets experts say next years deals will be all about return to the "f" word, fundamentals tech and biotech will play a big role as they have for decades, but you can expect to see more sponsor-backed industrials, financials, those types of companies come to market and it's unlikely we match this year's record issuance spacs are special purpose acquisition companies unlikely to help push into territory either the nearly 500 spacs searching for a merger target could

dissuade additional vehicles from raising capital and expecting regulation from the sec that may clarify roo rules around conflict of question. still a lot on that front, guys? >> a lot of issues a good list to talk about with our next guest thank you. let's discuss it with the professor of economics from the university of chicago's booth school of business. appreciate your time to leslie's point is there minimal chance that we're able to match the pace of deal activity from this past year >> who knows this is something, if i could predict this i would be running a hedge fund you don't know, and i think the time that this feels like is the late '90s and if you remember, '97/ '98 were crazy good years for ipos. people said they wouldn't condition and they did through '99 and 2000 that's why it's really hard to predict in real time

i think, you know, you do have to worry, you know, of the -- some of these factors that leslie mentioned, the fact that a lot of these companies don't have revenues, the more speculative so time will tell. >> leslie mentioned the spac curveball and what that's done to the model of the ipo, the modern day ipo i wonder what you think it's brought to the table and taken away and whether or not you expect real clarity in sec regulation in the next 12 months at least >> the sec is not my thing what te do, again, we'll see i think what you can say about spacs is, they had this huge increase in 2020, and then, you know, people realized that the people investing in the post-merger deals, did very badly. those, the ipos actually did pretty well in 2019 and 2020 they've not done well in 2021.

the spacs, the post-merger performance has been bad across the board. i think what people have realized is, the bloom is off the rose on spacs and you have to be really careful putting your money into that post-merger deal, meaning the de-spaccing. that said tax as -- it's a real thing. i think you will continue to see them at a lower level and the advantages are a little bit, there's less disclose sure, which we'll see what sec does, but the other advantage is to the investors. there's some investors who can't get the allocation they want in ipos and in spacs, if you do the pipe and the post-merger deal, you get your allocation. i think spacs are not going away they're another way for people to exit, but, you know, as a seller and as an investor you have to be careful about

valuation. >> we often, professor, think about spacs in terms of what it means for the investor i know you're speaking about both sides of the equation right now and i want to focus for a minute on the other side of it whether you think businesses looking to access the public markets will be soured by what happened this year within the spac market at all and whether you think we will have more traditional ipos again or direct listings or just other ways of going public because of the fact that we had so many spacs come to market this year and a lot of them weren't worth the paper that they were printed on. >> you know, i mean it's all a question of price. i mean if you are a company, a seller, and you're looking to go public, you're doing that because the valuations are attractive that's part of the reason you've seen all the ipos, all the spacs, is that valuations are,

you know, quite high, and now on the case of a company, you're just going to go to the spac and say, what's the value i'm going to get you're going to look at an ipo you can look at growth equities still because you still have a ton of money there and private equity money, so i think if you're a seller who's optimizing, you're going to look at all these options and, you know, in some cases, you know, you'll take a spac and many cases you won't. you know, i think they will continue to be here, just at lower volume than they were a year ago. >> you know, despite all the variation that we've gotten this year, you do make the point that over the long run, i think you call them real companies, but let's say companies with 100 million in revenue or more, have outperformed the market over a period of years. the traditional ipo we've noted has not been that risky or that

i guess not -- it hasn't been an under performer relative to the market at large. >> yeah. that's interesting this is data from jay ridder, university of florida, if you look over the long haul, company ipos with revenues above 100 million out perform the market in the next three years, and it also -- so again, you may want to stay away from the companies that don't have revenue. those have under performed another thing to point out is that it's very time specific the ipos in '99 and 2000 -- and there were a lot of them in the dot.com boom -- did horribly ipos across the board or on average over the last 10 years, not counting this year, have done pretty well, even the ones with low revenue you know, it's time specific, it's company specific, and i think if i'm an investor today, i think i want to really think, is this 1999 or is this 2012

2012 went well 1999 not that's the big question. >> it is it will continue to be it gives us fodder for discussion, though, this past couple years and we imagine it will continue. professor, appreciate it, as always happy new year, steven kaplan, university of chicago, booth school of business. programming note as we go to break today f you're wondering where you should put your money in 2022, tune in tonight, cnbc's special report "your money 2022" 6:00 p.m. eastern. catch wall street's top picks as we go into the new year. more "squawk on the street" continues after this.

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what does a foster kid need from you? to be brave. to show up. for staying connected. the questions they weren't able to ask. show up for the first day of school, the last day at their current address. for the mornings when everything's wrong. for the manicure that makes everything right, for right now. show up, however you can, for the foster kids who need it most— at helpfosterchildren.com welcome back to "squawk on the street." stocks mostly higher with the s&p notching a fresh record high with names like fort net and key site technologies among the leaders. also tracking nvidia, amd, applied materials, lam research, all up a percent or more

all those names also up 50% or more this year with applied materials notching an all-time high this morning. scott, back to you >> josh lipton, appreciate it very much. do not miss by the way, an all-star hour of halftime. kicks off the final trading hour of the year. see you at 12:00 eastern we've got tom lee on he's been right on the market. he said we're going to have a year-end santa claus rally and he's been dead right his base case, 4800 on the s&p now, he's going to tell us if we get some follow through into early 2022 unusual activity as always i just found out he's buying a stock you need to hear about we'll tell you about that. we'll also debate google, which is the best performing big tech stock of the year. i know everybody talks about apple hitting new highs and so forth, but google, alphabet, the best performing big tech sckto

we'll debate that. stay with us

the u.s. and china face a deadline to decide whether the phase one trade agreement taking effect just one month before the world went into lockdown is working as intended. under the deal, china pledged to open up new markets to companies across several industries and buy hundreds of billions of dollars in new american goods. one company in particular stood to benefit and for boeing, those deliverables have not panned out. >> this is a runway to nowhere dozens of planes, tens of billions of dollars, all ordered by chinese carriers now in a holding pattern. grant county international airport in moses lake, washington, is just one so-called bone yard where boeing is keeping these jets relatively warm as part of the trade deal inked two years ago, china agreed its dom domestic carriers would buy an estimated $52 billion in

aircraft and parts in 2020 and 2021 so far, it's done just $8.6 billion chlts one major reason, the 736 has been grounded >> 40% of the max backlog is being out because china hasn't certified the aircraft >> analysts say boeing gets paid for planes in roughly three stages about 5% on order, 40% when the plane is being produced and the majority upon delivery the deal sets those targets for two years but says they could apply to orders or deliveries. we asked president biden's top trade official whether they could close that gap is it possible that china could buy a bunch of boeings and make up that lost ground? >> well, we won't know what's possible until we start talking. >> still, analysts say there's too much ground to make up >> i think we can't hide

billions of dollars of aircraft and hundred units of planes just s sitting there. so i don't think there's a creative way behind the air space element for a phase one deal >> china's aviation regulators earlier this month issued a directive to pave the way for the 737 max to return to the skies there at a future date boeing's ceo suggested sales could resume early next year, but that will be after the deadline a senior administration official telling me china's compliance and the future of the phase one deal are still ongoing we're going to be talking more about this deal, diving into different parts of it later in the week tomorrow we're going to look at the ag economy later, we'll look at whether those markets did open for american companies and talking some of the principles behind the deal certainly going to be a big deadline on december 31st for the u.s. and china >> yeah, look forward to those other reports. let's hit the markets before we

toss it over to tech check we set a new intraday high on the s&p 500. tech doing well along with healthcare and real estate the s&p 500's currently trading at 4768, nearly a 1% gain. dow looks to be at the highs of the day. pushing almost 200 points to the upside still have about 1% or so, 1.5 to go for new highs. that will do it. tech check starts now. good morning morning welcome to tech check. jon and julia are off for the week today, the major averages are higher as we enter