>> on the coattails of metaverse. thank you both we're out of time, but not a whole lot going on i will never guy a piece of gucci clothing for mire avatar, and i'm not buying oceanfront property on the computer. >> are you even do doing that for your real self >> yes, i have gucci loafers on. >> okay. see you soon. happy new year "squawk on the street" is next good wednesday morning, welcome to "squawk on the street." i'm here with scott wapner and leslie picker. the dow -- another gain today would be the first six-day win since march, keeping a close eye

on china supply chain. our road map this morning begins with, quote, not the same disease. oxford scientists signaling the omicron variant is less severe, but companies appear to drop out of in-person events such as ces next month. elon musk compaleting his sale where we're watching covid cases set record, global now a million plus for the second day in a row, u.s. printing 441,000 yesterday, seven-day average almost a quarter million now interesting, leslie cdc director what lents can i i think was on five morning shows this morning, talking about their changed guidance her general point was, look,

we're trying to give americans what they think they can handle. part of the challenge to her is it sounds like the decision was based as much in business at in science, when they're talking about societal function, making sure employees are not removed from work for ten days >> they've gotten some posh pushback the real question is, what does the science tell us about the appropriate time to quarantine there are certain cases where the virus can last for a long time, but does it shed and infect others? that, of course would be indicative, of course, if people could be safer if they quarantine for longer. however, if they test negative, essentially don't have any symptoms, does it make sense to allow people to get back to work sooner these are important questions,

as we approach the second year of this pandemic, scott. >> uys, imagine where we would be a year ago, for example 400,000 cases in a single day, we read that number. it's such an incredibly large number, yet the number most are focusing on, the fact that hospitalizations and deaths are not spiking in nearly the same magnitude an before, anywhere close to 400,000 in a sing the day. and that's largely why the market has been able to do what it's been able to do the s&p, it needed a breather. when you're up 6% in five days or so, it's like michael johnson running the 200 at the olympics in record fashion with his gold shoes on, and he needs a bit of a break before he goes for the

double-double with the 400, right? the market needed just a chance to catch its wind. >> yeah. maybe that's why we're seeing the treasury yields climb. the ten-year is back to 1.52, with the often caveats about volume between the holidays. we'll see how much gets ratified when traders come back in force next week. to scott's point, leslie, the market is counting on the activity not being dented. a big story in the journal how states will try to avoid restrictions of waving in the past we got the sam suns production news about altering production schedules in china, where we know there's been an outbreak and shutdowns. is there any hint the supply chain is going to be shut down, maybe that's what the yields are

reflecting, the question is, what are we solving for? if it's a negative tiest, it's not looking that great lower hospitalizations and deaths, the omicron variant does look more promising on that front. this is why quarantine is so important with regard to the functioning of the economy if you do have all these positive tests, even a five-day quarantine, that creates a pause both in consumer habits as well as the labor force s there were headlines that the cdc is investigating 86 cruise ships with covid-19 cases. that elicits quarantines, but the crew lines, which have actually outperformed this month, so that kind of gets back to scott's point that the market seems to be shrugging this off,

especially as we approach the last three trading days of the year right, scott >> maybe for the first time you can see the real other side. there were false starts, if you will, and perhaps for the first time you can start to see the other side, and, carl, maybe toed other side. i saw a retweet from you from ed morris of citi, how next year could be a deflationary year so you talk about the different kinds of inflation will wages stick for a long period of time probably is explodity inflation going to stick? probably not you have already seen the rollover you are other types of inflation going to stick probably not people are still worrying about inflation, and rightly so, as you talk about potential

disru disruptions maybe it's not going to be as big of an issue next year as was once first feared. >> to scott's point, on worldwide exchanges this morning, talking about that, but the fed had an interesting paper about the number of people who retired earlier than expected because of covid 2.4 million americans retiring, exiting the labor force because of this pandemic that obviously will challenge labor force participation, hence wage inflation, hence the fed's pivot, so all these strange cross-currents and dynamics t. >> interesting peter boockvar had this idea that the inflates

may come down and the rate of inflation may come down, but you have this corporate response that they may tay advantage of the public's willingness to take higher prices now, to build back up so lots of interesting dynamics. let's bring in andrew sim months, and angel oak capital advisers' cheryl pake? you made a nice parallel between sports teams this is clearly a year for the bulls, not the bears, but will the markets reflect your basketball team or the football team >> good morning, leslie. i think the point of this is that the sect year coming out of

a low recessionary bear market, which was this year, the market always does well it always does well. this year is just another repeat so i think the people who were bearish were way too premature the bulls were not optimistic enough next year, if you consider the next year, it is yet another good year, but much more tempered i think you're looking at mid to low -- mid single digits to low teens here, and that's because the earnings story continues, but the fed starts to throw in cold water onto it you had tommy lee says it will create volatility, which leads to lower, al bet it positive, returns for the market next year >> cheryl, how do you think investors should be positioning their portfolios, both in terms

of allocation, as well as maybe sector selection. >> that's right. good morning, leslie we're much more biased to value stocks here, as we move into 2022 i would agree with andrew that i think we're sort of in the 10% to 15% type of returns, so still very nice returns, but al bet it lower than this year i think you're starting to see the transition into sectors like financials, which are clear beneficiaries of higher rate environments if you look at banks, diversified financials broadly -- >> andrew, you crushed it this year your numbers are pretty darn good. >> thank you. >> the fund is up 34.5% year to date you're ranked in the top 1% year to date. so given your prowess for picking stocks, apparently,

which ones do i want to be in in 2022 >> thank you for that. what is interesting, scott, it is markets rocked this month, but it's real estate, utilities, staples leading. i think the market is anticipating a quick pivot from tapering to fed rate hikes you wouldn't have those stocks leading if it weren't for that so, in my opinion, i agree with cheryl, it is a smattering of different stocks, but largely financials and energy, which have been the big standout this year, eye specially energy, which has led to big performance for us, i think those will continue to work next year, but i think you have to offset that with some of the more defensive stocks, because it is a lower return environment, simply a lower-return environment, you'll

have more volatility. there was an f.t. article, essentially looking for a steepening yield curve die speed it's been a trade that inflicted pain do you think 2022 will finally be the year that investors can capitalize on some improving economic environment >> i think when we're looking at the yield curve, and i do think the front end will matter more in sectors like financials, clearly, but we are looking for the ten-year to move higher still from here. we are much more biased toward shorter duration strategies. we like financials on the fixed income side, and are certainly leveraged to housing as well we like the short duration,

lower profile. we will keep an eye on it. thank you very much for joining us carl guys, when we come back, elon musk selling more tesla shares, moving closer to his 10% target, exercising mo options before they expire at the end of the year take a look at futures, a narrow range here, but holding steady, in a year where the first year since '05 the s&p is likely to outperform both the dow and the nasdaq we're back in a minute for the gifts you won't forget. the mercedes-benz winter event. get a credit toward your first month's payment on select models.

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shares of tesla, elon musk announcing, putting him closer to the target of selling a 10% stakes he's now completed all of his stock options, signal been the end of recent stock sales. you can see, the stocks up 40% in just the last three months, so maybe this removes just that part of the story.

ants if that's even such a thing. if there is such a thing. to your point, scott, this has moved the stock in a way that we and they had, yell, that poll kind of ignited this whole back and forth, and, of course, the stock price reacting to that the question is, what will next year pour tend will they see more tesla volatility kind of like we have seen, or will it be returned to

fundamentals >> it's interesting, we talk about insider selling. robert frank has been keeping us honest on the level of insiders, especially at the high ed selling this year, but bloomberg had a piece on insider buying, leslie 1300 corporate officers have done going back to march of 2020. >> you're right about competition. i don't know if you noticed, scott, forward market cap finally surpassing gm's yesterday for the first time in about five years adam jonas -- he as not -- but especially given disparate exposure to china, for example >> i think i saw a list that ford was on, of the 11 stocks,

and that's correct. >> gm has obviously been no slouch, but ford has sped past it if jim were here, he wee waxes poetic by mr. farley, the ceo. it's interesting to say the performance of rivian and the like, some of the names that have blasted, in terms of performance. the market caps are huge, relatively to the revenues that thinks companies are making, the price to sales, obviously through the room i wonder if some of the overall steam comes out of the areas like that in the market, what the impact will be, carl, to some of the names like the ones we just mentioned, and others. it has been one of the hottest spots in the market in the last three, four months. >> yeah. as for musk, leslie, you know,

at the end of the year, it's a good chance to assess the year he's had, "time" person of the year, f.t. person of the year, back-and-forth with elizabeth warren it's been hard to escape him, no matter where you look. i think as "morning brew" put it this morning, he's blended this idea of an entrepreneurial force as well as celebrity in a way that we have rarely seen of course, there was the whole dogecoin situation when he hosted "snl" that they point out. tesla over a trillion market capitalization, and then, of course, the sparring with various senators, whether it's bernie sanders, elizabeth warren, with regard to his own personal decisions with regard to wealth and paying taxes >> yeah, definitely a magnetic figure, in a historic sentence

t.j. rodgers will join us to talk about the chip sector outperformance at for futures, looking pretty steady after a brief dip into the red. as we said, dow is riding five straight gns ai you're a one-man stitchwork master. but your staffing plan needs to go up a size. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates

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s&p did take a pause yesterday with a brief decline at four straight gains futures back in the green today, amid a pretty good given the holidays week. the dow now at the highest since november 8th

we'll get that opening bell in about 6 1/2 minutes.

apple reportedly taking some new steps to retain top talent, sources telling bloomberg the company is offering significant stock bonuses to some of its engineers, looking to stave off people leaving it's fascinating, leslie, because it depends on who you ask in the valley, apple, though they pay historically well, not historically known for leading, because they're apple, and there's a huge premium for working for the company in and of itself. this talks about the scarcity of the talent i always think about the line those that work for the fruit, obviously meaning apple, and it creates a prestige and whatnot

california is a state that does not love the idea of non-competes they're not really allowed there. that creates this price dynamic. you have a whole competition from cryptocurrency-represented company. then, of course, there's competition with regular tech. a lot of the people who work at companies like apple, love the idea of going off and starting their own company that they hope will one day become apple. with all these competing forces, you look at $180,000 in stock, but for the companies in silicon valley, they have to ensure they have this engineering talent that's the bread and butter of what they do, scott. it will be interesting if we see action from other big tech companies in response. >> and here we've been wonder

for all of these months what apple will do with the money on its balance sheet. now we know what they'll dough with a bit of it and o., by the way, it wouldn't be a day if we didn't mention the $3 trillion in market cap. we're still a few bucks away from that. it's pretty interesting, when you this i about what the year ahead may bring, the stock survey asked, what do you anticipate for apple shares in the year ahead takes a look at this pie chart 42% say it will keep growing and the stocks will keep rising, but still 258% say it's reasonable that the stock slows down just a bit, which i guess is not surprising given the fact how fast the stock has run up.

>> it's true we've talked about it the last couple days, going into you end of the year, a lot are multilayered it's not just about what we might hear in spring, leslie, the spring quarter typically where they talk about that thing, but the optionality around a new product in the ar/vr space, and i wouldn't call it a pipe dream, because some are quite convinced, but the idea that a car, they are not afraid of vertical integration, especially in chips. celebrating its five-year anniversary. at the nasdaq it's new york roadrunners, organizer of the tcs new york city marathon doing

the honors scott mentioned this list. ford is on it, so is moderna both, leslie, moderna and pfizer have sign double-did you get declines hard to tell if this is due to the belief that the less-severe omicron will suppress the need for vaccines, or maybe it's sort of the longer-term pessimism about the mrna platform and whether you can transfer that from a vaccine to covid to the flu and cardiovascular disease and to cancer. it's been remarkable to see the action of both those names >> pfizer was one of the biggest decliners as well. today it's down lower, about 0.7% at the open, but i think you bring up a good point, all of the headlines we have seen recently, i would say net-net, are positive on the covid front.

you kind of wonder what that means. we do still have a large proportion of the world that's not yet vaccinated, and those who have not yet opted to get one, so i don't know if this means the market has stalled from here, but it is an interesting moved at the end of the year, especially when you look at the back drop of what's going on on the covid front. >> you've got alibaba, that reportedly is weighing options for the stake in waibo, the idea about that is we are seeing some of these chinese tech companies, opting to divest some of those tangs. this comes after the news of ten-cent jumping its stake in jd.com and on didi front, there was a

reuters report it would use a listing by introduction method to lift in hong kong, but for didi investors, this is noteworthy, because they won't be raising more capital or issuing more shares. obviously at this point in time it's important for this type of company for race additional capital, so china they can has consistently been something to watch as we close out the year, scott. >> i wonder also whether this coming year will be the year, leslie, where investors feel better about returning to some of those names or just shun them altogether we had guests suggesting there may be light at the end of the tunnel, and once you get the regulations figured out, they will become quote/unquote investable again

you maybe find people willing to invest, maybe through options or other shorter-term methods of owning shares or calling in these stocks, but it's hard to find people willing to place their bets in the long term and the goal post can move at any moment. >> and that's a departure off the last few years a lot of institutional investors were overweight relatives to the market present that has changed dramatically, of course, with the recent sell jot. it will be interesting what happens on the short side. i think a lot of institutional invest offers had been somewhat fearful to go short these names unless there's clarity on the regulation front trading, as you mentioned, but not investors, where names like alibaba used to be in the top

five, four holds of hedge funds. that's got way down in the rankings, so i think 2022 will be a big year for names like that, and just the overall capital markets here in the u.s., as a destination for chinese listings, as we look to future ipos, which historically has been very, very robust, given all of the concerns with regard to do recent regulationses. >> scott, i saw a piece looking back at 2021 trading part of it was looking at s&p, probably will outperform for the first time since 2016, may impact the -- bush but narrative being spun is it was finally the year that investors avoidoid buying the initial dip in

technology, but you could argue the same thing is true in china tech given the barrage we would read every morning. >> the biggest variable as it relates to, you know, u.s. tech, is the fed and interest rates right now, if you tell me that interest rates, the ten-year is around 1.50, but if you seed it moving meaningfully higher, you will probably see many tech stocks struggle, whole swath of other names that can have big say into what the nasdaq 100 does you have to think about the impact to the broader nasdaq if you have rates start to move higher, it's going to be more

different for those stocks to do well >> that's right. scott, you bring up a good point. that also presents an opportunity for a lot of value investors, at least ones that have been waiting for years for their day to come due. i think that's a perfect environment for them for the aerospace, they adopted a poison pill, known more formally as a limited duration, shareholder rights plan, limited duration in that it's going to last a year. what is interesting is they set the bill at 7.5%, meaning that if anyone trying to acquire more than 7.5%, they specify they should be an active investor,

that could create -- therefore, diluting the activist or other investor that intends to shake up the company this comes just one trading day after jana partners disclosed a stake, so why is this interesting? it begs the question about what this company thinking in terms of its valuation act investment is down pretty dramatically and at the lowest level we have seen in the last seven years or so. does this entice additional investors to come into this company?

i think the question remains to be seen, but a lot of investors believe this could potentially be a takeover target this is a defensive mechanism here the company declined to comment when i called them, but interesting, when you say headlines that may just slide under the surface. i wanted to bring it to the forefront. >> it is that time the year, guys we'll take a break here. chips definitely leading in tech technology t.j. rodgers will join us with an eight-monday high this morning on micron. bonds and treasuries as the ten-year got to 1.52, as we look at the curve we will get claims tomorrow, so maybe the biggest economic make rho print of the week.

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semis outpacing the s&p for the year, the sector seeing over 40% growth the question is, can the rally hold in our latest installment of the quarterly stock report, we asked viewers, which sector do they expect to be the biggest gainer. semis leading the charge joining us to talk about his outlook, is t.j. rodgers great to have you with us, happy new year how are you? >> good morning. >> i wonder how you're thinking about the cyclical friction we keep hearing about, about supply chain, versus the more secular growth prospects in all kinds of industries right now >> that's a very good question i remember, to preface, we had

this boom in semiconductors that was never going to end then it ended abruptly the index dropped to a low, and it took 17 years to recover. that's going to happen perhaps late this year we've been growing at 3.5% semis on the average in 2021, because of all the stuff we've been hearing about, semis grew 13% now, as i look at the annual it'ses through the stuff i read, i see forecasts that go from plus 8% growth in '22, which is down from 13% in 2021, all the way down to minus 6% for some of the analysts who are the old weathered ones who have been through cycles so i think the party is not

coming to an end, but people need to be careful about putting a bunch of money in semis and forgetting it. i i think about hotels i think about airlines, industries that are capital intensive, where the cycles are very hard to read, and it's easy to overbuild are we overbuilding in capacity right now? and then we would see the fallout? pricing? or is it something else? >> a great question. we're not going to overbuild in capacity the semi guys are some of the smartest ceo it's, and my god, the government is let's give them $20 billion to the build as quickly as they k. they know they have to fight nimby wars to get a plan in. they have to go through two years of work to get it built.

they're building from what their intern projections, which are accurate, not government prop propaganda no, we're not going to overbuild, but we're going to build a lot, because chips are more important we have a lot more demand for chips so we're going to build intel has a $ 95 billion, and samsung has 200, so the big threes will big big plans on the ground we'll modify deployment with more here in the u.s., so we don't have to worry the way we did during the last go-round. >> t.j., in terms of the auto industry in particular, the chip shortage has cost about $210 billion according to alex partners, do you think the

supply chain bottlenecks specifically for the auto industry have been worked out at this time? >> yes and no. there are short-term workouts, and then there are long-term workouts, two forms. one is the car guys need to wake up and start using modern chips. they haven't done that two is the semi guys have to work better to keep the automotive supplied. so right now what started 20 nanometer, that was your curved dashboard with all the gauges being viewed on the screen, and then we had things getting bad on the small chips we're talking 1,000, 2,000 chips that might run your window, for example, your car. so we go back and forth on what is short you can't really talk about automotive what the automotive guys need to

do is stop using old chips they remained me of the military nothing flies in an airplane unless it's already ten years old. automotive is second worse to that pat gelsinger said we have the capacity, so move to it. so people start designing chips where the -- capacity is so expensive u. you have some areas 60 nine ometers and looking for customer, and some areas shutting down plants because of a lack of supply >> t.j., that is a great gut check on where the industry stands, and as we enter another pivotal year, we look forward to checking in with you frequently in the year ahead. happy new year. >> thank you

t.j. rodgers still to come this morning, by the way, a reminder you can always get in on the investing club with jim cramer find out more at cnbc.c cnbc.c/iesngluomnvti cb, or point your phone at the qr code on the screen. we'll be right back.

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show up, however you can, for the foster kids who need it most— at helpfosterchildren.com once again, knocking on the door of 4800 hey, bob >> good morning, carl. kind of a modest open. we're essentially on the new highs for the s&p 500. but not much in the way of new high stocks. even staples that have done well proctor and gamble kind of flat. the flattish yield curve is not helpful to the banks and banks slightly to the down side, as you can see the year-end narrative hasn't really changed at all in the last day or two. and it's construlkted on a very simple idea, other than the fact we have seasonal factors

omicron is more transmissible but less veeralant we won't have the lockdowns. the fed will slowly raise rates because we won't have this problem with supply chains this is the theory and the ceconomy is high. the problem with the theory and that's what it is a theory, is we're not going to have any problems with omicron, particularly on mask lockdowns samsung got manufacturing plants in china that make chips "due the ongoing covid-19 situation, we have decided to temporarily adjust our operations at our manufacturing

facilities in xi'an, china " it implies an impacts on shipments. it's down about 2% but the key point is we're basing this theory on no mask l lockdowns occurring. and remember, samsung, one of the ones who's been a beneficiary. and finally, the big question everybody's been asking me why don't we have a day off on new year's it's a very simple one all thex changes have a similar rule when a holiday falls on a saturday, the market closes on a preceding saturday unless unusual business conditions exist

the end of a monthly or yearly accounting period. that's what december 31st is the end of a yearly and monthly accounting period. so, because it occurs on the friday, you don't get a day off. the good news is we have j juneteenth off this year it's going to be observed on monday, june 20th. but this particular year, the calendar doesn't work for a day off. >> got to wait six months for that maybe they need a rule 7.2 a and amend those rules. maybe they're outdated, bob. thanks, bob. rng mcdonald's among young stocks hitting all-time highs this week kate rogers joins us now >> after learning how to manage

in an ongoing pandemic, they're continuing to face challenges as the omicron variant spreads. they're looking for more restrictive and open environments and have pricing power continue to weigh on the sector and says the top pick for 2022 is starbucks investors should own names that kater to a higher dem gographic for 2022 and chipotle takes the top spot. a company that says it has room to run in pricing. it's focussed on digital loyalty and innovation a newly public companies, sweetgreen and dutch, are key with consumers looking to order

platforms for the foreseeable future but the two top performers are domino's and taking the top spot, papa john's >> what a run for both of those names. pretty incredible. we'll take a break here. s&p near 4800. os t17ix around 36.5 and the v clero than 18 back in a minute everything you've seen me do was made possible by what you don't see. cause when you're not looking, i go to work. ♪♪ strength isn't a given. it's grown. it's earned and tested. ♪♪

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good wednesday morning welcome to another hour of show show morgan brennan and david have the morning off. s&p around 4800. dow 36.5 as we continue to watch record covid cases and the continue sweep more tolerant than years past >> we're already three minutes into the trading session starting with tesla. shares off initial highs following news that elon musk sold another $1 billion of the shares, nearing the 10% target that name up more than 50% year to date.

and didi down as it moves to delist in new york shares down more than 60% since the ipo earlier this year. and well end with the nation's largest egg producer under pressure after reporting earnings below forecast with a bottom line hit for higher costs of packaging and labor that stock down about 6% in a rare earnings report this week >> and meantime, cnbc is out with a new quarterly stock report polling participants in how they think the s&p will perform next year, with more than half saying they'll be up less than 10%, while less than 2% will hit similar gains to this year, up more than 20, of course. of course that number's more close to 30 on a total return basis, mike. >> yeah, and actually on the

three-year trailing basis, i think we're 25% annualized total return on the s&p fievlg 00. which means it's somewhat understandable you'd have people in the realm of the long-term average return and say how much can we expect from here. historically, it's extremely rare in a given calendar year to have the s&p go up anywhere close to the long-term average of less than 10% it's more likely that the average is up and more likely to go down in a given year than up in the consistently, predicted area that's one of the quirks of how the rhythms of returns acrew over time. it does seem as if we're at a point where you're not going to get a lot of help from expanding valuations mayb

maybe it's going to be more selective. so, i think a little bit of comfort that people aren't saying we're going to have another gangbusters 20% next year >> all that said, i wonder people are still talking about record margins in the year ahead. buybacks will be a cushion on the s&p. and one of the discussions was junk bonds sometimes we look at these as canaries and i wonder what you think it says about risk tolerance right now. >> i think it's healthy. i don't think necessarily excessive. in terms of junk bonds, they have had a good comeback and the high yield cost spread, we're probably past our peek or

can't help for much help from the area we got to the point of maximum easy financial conditions. it's not tightened very much from there but that's what people are lightly bracing for even when we ftalk about $800 billion, relative to u.s. market cap, it's not that significant, especially when you have to these reductive stock issuance so, it's not, to me, like it's in the bag because all these things look like they're healthy. they set a decent back drop, i think, for the coming year but none of them say that somehow risk assets are pricesed >> it seemed like everyone was talking about how we can expect volatility, given the limited trailing volume and tapering taking place at the fed.

but if this week is any indication, that hasn't necessarily been the case. do you think that's a good sign heading to 2022? >> yeah. i would say it's not a negative sign it's another one of those logical things where you would expect to have a more volatile phase coming up because we've only had a maximum 5 or 6% pullback usually that's like 2017, 2013, 1995, the next year did have more chop to it, a little more corrective action along the way, even if they were very good years. i think it's one of the things where the probability say it should be more volatile but things don't always follow the script >> appreciate it, mike thanks very much the three-day average for covid cases is all-time high this is dr. fauci says the key reason for the cdc cutting the isolation period is to, quote,

get people back to jobs, particularly those with essential jobs and joining us is vanderbilt professor of disease appreciate you being with us this morning >> sure. good to be with you, scott >> do you agree whole heartedly with the cdc guidelines? >> i'm supporting them they're walking a tight rope they're trying to base the new recommendations on the science it's clear that your most infectious just before and just after you develop symptoms and they're also trying to do it in as simple a way as possible so it's well understood and of course there's been folks who say could have done it this way or that way, distinguishing vaccinated from unvaccinated people or asking for a negative test but this is an arena where we

already know there aren't enough test kits out there. they're keeping it as simple as possible to help enter 2022 in the most effective way so that our economy, our schools, our universities, our entertainment venues are all functional as safely as possible >> understand. let me ask you about some numbers, if i may. more than 400,000 cases in a single day the record number of seven-day average cases is 267,000 i mentioned at the top of the show, a year ago, had we mentioned those kind of numbers, i can only imagine what would take place in the stock market, which we cover on a minute to minute basis and on society at large. do those numbers mean the same as they did a year ago how do you think about that when there's more focus, it seems to be on hospitalizations and deaths, the fact that those are not spiking and at the the

omicron variant does not appear to be as severe as was first feared >> you're singing my song. that's exactly what i would say. let's distinguish cases, particularly among vaccinated people that are mild a discomfort for sure, sometimes putting you in the bed for a day or two but not requiring hospitalization. on those cases that are severe enough to require you be admitted to the hospital, those cases, the hospitalizations are occurring dominantly still in unvaccinated folks and that's where our focus is at the moment to try to reduce those hospitalizations to get our friends and neighbor whose haven't got their first dose vaccinated, get the boosters out to everyone and have the parents bring children now five years o age and older, because they're eligible too, be vaccinated.

so, it's different today than six or eight months ago. >> i think at this point, we all know someone who has caught the virus overthe last few weeks, vaccinated and boosted or not. breakthrough seems to be par for the course in this variant do you think we should still consider vaccine mandates and bringing people back the office or should the focus be elsewhere? >> well, i continue to believe, speaking for myself now, that vaccination is the key, continues to be the key, to getting covid under control to get through this pandemic phase. here in tennessee, we have a substantial portion still unvaccinated and i've come to believe, rather reluctantly that we're going to have to oblige people to be

vaccinated to engage in certain activities, such as going on airplanes, going to museum, restaurants in order to persuade more of them to accept the vaccine. so, i know mandates are a bad word so, i talk about requirements and obligations, if that helps any. but i think that's going to be needed to get us, if you will, over the hump. otherwise, omicron will just run through, make a lot of the people sick and will come out at the other end, whether vaccinated or having had infection. i sure would like to prevent many hospitalizations still in the cards if people don't get the vaccine. >> doctor, along those lines, there are some who suggest that those who don't want to get the vaccine are never going to get the vaccine, no matter what you or anybody wants to say or do about it, whether it's requirements or mandates, to

some people those are the same words, just spelled differently. how do you deal with that? >> sadly i would like to understand the thought process behind it because, as an infectious disease doctor and public health person, the root to safer communities for all of us, for the individuals themselves, their families, their entire communities, their schools is through vaccination. this is so apparent to me, i can't get on that wave length. i respect it, enormously, yes, but i don't understand it. i would hope we don't have to visit many of them in the hospital >> let me ask you this and lastly, if i may since we're partly talk about if we're going to need vaccines annually does the omicron and it being less severe give us any clue in the fact that it looks, according to at least a couple of studies, that it will

displace delta does that give us a clue as to whether we may not need an annual vaccination for covid >> i'm not entirely sure because the determination will come from an assessment of how long our protection lasts. you see, covid is not going away it's not going to disappear. it's like influenza. it's now part of our lives for the foreseeable fumper and with influenza, we have to remind our immune system on an annual basis too, wake up, take the antibodies to protect us against flu. you may have to do that with covid also there are already vaccine scientists trying to put the two vaccines together. maybe on an annual basis, we only have to roll up one sleeve instead of two there are other vaccines you have to get periodically

your tetanus shot, for example and i think we can do this if we all do it together >> you've been certainly gracious with your time the entire year. we appreciate it and we'll see you in a happy 2022. >> a happy and safe 2022 for everyone and some new data suggesting a potential rebound for the sector plus bitcoin's on pasch for the second year of quarterly gains. and netflix, the only positive streaming stock for 2021 what will it take for the media companies to turn it around?

as you're aware the omicron variant continues to effect travellers for more we're joined by ceo of an aviation data company appreciate the time today. >> no problem. good morning >> i know one of the things you're pushing is cancellations make a lot of news and disappointments for the travellers themselves but probably not the story going forward. why is that?

>> it's interesting but particularly this time of year with christmas and holidays, people feel emotional when their flights are cancelled and everyone understands that. when we're looking at the global picture and recovery for aviation, there's going to be bumps in the road. not easy running an airline in terms of weather, in terms of power shortages and now start ups having to self isolate we don't expect that to alter the trajectory might be bumps and might slow itdown but aviation is definitely back to recovery. to reaching 2019 levels. >> your view on global capacity is we might get back to levels from the middle of the past decade, i think, by the end of this year. i wonder is that because public health clouds dissipate or have they gotten so much better at

operating at an even more challenging environment? >> we say our expectation of 2021 is we'll be back to about 31% below the capacity perspective, where we were at 2019 still got a way to go. however, the start of the year was 55%. half the size we were prepandemic. there's been great leaps and strides made in 2019 but mainly 2021. it's been driven by domestic travel there's a lot of places where it's back to prepandemic russia is balk back and inu.s. market is virtually back and a lot of the countries are following. so, that capacity growth is being driven by domestic.

2023 is when we expect to be back prepandemic >> are airlines in the position to raise prices as the rest of the economy faces inflation right now? >> that's a really good question and i think you're seeing a lot of volatility now and you'll see it heading to the future we have flights that have been returned and arriving before the border's opened with 30 people on them. you've also seen measured flights overbooked so, still a lot of volatility in terms of what airlines can be pricing. and people are booking the flights much closer to the date they want to fly so, that ability to know what's going to be on the aircraft sometimes doesn't happen for three to four days i think it will come down but you're going to see volatility next year.

>> and finally, i know it's just one day but i was looking at cancellations as of about 20 minutes ago for this morning and united's got 150 and delta's got 100. and southwest has eight. i wuonder if they are taking lessons or building in at least more spare labor capacity perhaps after going through rough periods, even in the course of the last few months. >> every airline has different operating conditions and we've seen the cancellations coming in. and every airline runs that different operating model. they've only had six cancellations, which is good we know the difference, it's a challenge to run an airline at the best of times. weather, pilot shortages, etc. so, they've been ageble to weatr

the holiday storm. >> why they call it one of the most challenging operational businesses out there great guidance we look forward to having you back as we head to break, shares of fuel cell energy after reporting a wider than expected lost the stock down about 16% right now and down almost 45% in december alone, on pace for the rsmoh ncma2019 we're back in two.

frank holland has more on the crypto names we need to watch. tough going, frank >> omicron's shifted in the investor's away from the riskier assets and you see investors have been really slow.

whether holding or mining have been deeply impacted by the parent correlation we're talking coinbase, market strategy, all falling hard and says it's institutional investors gain greater understanding of block chain and expect the correlation to lessen and all these companies be trade on their fundamentals. sglilts still hard for most investors to wrap their head around mining. it's a small part of the market. so, you don't have a lot of institutional investors devoting mass amounts of time to it easier to look at it like a basket >> and crypto investor brian kelly says they're a lot of profit taking with them reassessing in 2022 when they have a lot more clarity on interest rates

this year doubling the s&p and how much of a factor covid has changed. and in 2022, they've all said they want to see how much of a catilous, stimulus has been. >> and the quarterly stock reporting showing that while a third will open below 75k. more than 20% say the slide will continue and end the new year, before 40,000. john, thank you very much for being here let's start with bitcoin and maybe expand to other areas of crypto but where do you stand on bitcoin in 2022? >> i think the back drop for

bitcoin and the broader universe is corlalted institutional involvement in crypto and bitcoin, in particular, was the story of 2021 i think we're going to see that play out more so in 2021 and into 2023. where institutions get more comfortable with trading and holding these assets now, obviously, markets have been read a little bit in the last few weeks and that's concern about risk on assets and you've seen it was a phenomenal year and i think back drop is still there for the first half of 2022. >> as you mentioned 2021 was supposed to be the year that saw all the institutional adoption of john crypto what makes you think 2022 will be different what are the key catalysts here?

>> you certainly saw an uptick in that. throughout what we see at needham, we're working with institutional investors, the difference between nine months ago and today is very different. putting some money to work, although a lot is around the private and crypto space you're starting to see that pick up, where they're focusing more on the crypto assets themselves. we've seen volumes pick up so, you've certainly seen the institutional pick up. but this is a process that takes time you're seeing the hiring today, whether it's a dedicated research analyst to look at crypto you're seeing the initial steps taken, basically through 2021 and then it seems you could see more of the capitol get put to work i think 2021 wasa great year,

historically but you're going to see capitol in 2022. >> you make a great point, john, on the research, wealth management side. i wonder if you think the new year brings us another inflection point in payment mechanism and opportunities at point of sale to use it and what that would do to sentiment >> certainly there's almost two use cases for crypto assets. there's defy applications or lending, improving or actual payment applications whether it's stable coins or you're sending payments. that could be in the form of remittances or other areas you're seeing progress obboth fronts and a lot of growth in the front and it's becoming easier to use. historically they were difficult to use for your every day individual and you're seeing a lot of progress on that front,

wriltser coming to the point where it's easy use and you're starting to see that on the payment side you're seeing more and more use cases on the payment side. i think that's all set to pay and that feeds into the back drop of why they're looking to get allocated to space because you have efishiancies, whether it's decentralized finance and it' it's starting to challenge the legacy payment institution >> is it will be interesting to see how muted volatility play as role there thank you very much for joining me and do not miss a special progra program "crypto night in america" at 6:00 p.m. eastern time in the meantime, let's get to rahel solomon for a news ep date

>> and the 377,000 new infections recorded tuesday. the u.s. has topped 53 million confirmed covid cases. the seven-day average has surpassed the delta surge and defending the new recommendation that people who test positive should isolate for five days instead of ten and the doctor this morning said many vaccinated have mild or none at all symptoms and may may be unwilling or unable to isolate for 10 days. >> this is a way to make sure you tell people to make sure you isolate for the first five days and wear a mask for the last five days to make sure you don't spread anything that might be left over to others. >> and hong kong, meantime a police raid has shut down a pro-democracy website. stan news say all the employees have been dismissed.

editors and board members have been arrested. they're suspected in a conspiracy to publish sudishes publications and the former democratic senate leader, harry reid helped win senate approve dead at the age of 82. new projects means new project managers. you need to hire. i need indeed. 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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rjsz welcome back to "squack on the street." there are your major averages. it's higher and the other negative average is higher and asking what worries them most about 2022? more than half saying inflation and more than a third saying the fed raising rates at the wrong

time and then covid. it's good to see you since you have a pension for big headlines and you're trying to make one today, the third bubble in 100 years. but first a 10% correction looms by the first quarter of 2022 you really think we have a bubble brewing of epic proportions? >> yeah, there's a possibility of it. we outlined it in the note about two weeks ago. the bubble term is misused there's only been two in 100 years. 1929, before the crash and 1999, at the end of the year, before the tech bubble crashed. one is possible, as you get into second half of the year. you've got yield repression, which causes it to enter a p

pa parabalic phase. and you've got, as i said real and nominal yields are very repressed. minus one. on the 10-year tips and we're negtsk real yields after 30 years. where are you going to go but stocks and you could set up for a bubble scenario, which is worse because they lead to loss decades. >> i think there could be a case made that low interest rates have really created a ramp up in assets i would say low interest rates have created a situation where there are no other alternatives to invest in right now

real estate is a very high rate and look at the 10-year treasury people have been worried about inflation for 1.5% so, i don't know that it's really a bubble. i would describe it as this is where you go when the opportunity is there if you're making a 1.5% on your 10-year, the risk becomes if it ramps out of control and it should moderate inflation so it's not quite as high. >> a lot of the pockets people have been pointing to is indicative of bubble activity, namely the ipo and spak mark have the come down and are underperforming. i wonder if you still think there's a bubble when you pull back the covers and look underneath and see areas that had run up so much had come down to earth with the change and pivot in fed policy.

do you think that's already happened and perhaps may have deflated some of the air that was in there >> that's certainly true and we have been, as i said, cautious in the near term. i think all we could drop in the first quarter to 2200, plus or minus a few percent because of tightening liquidity, the dollar is up. china already tightened their policy so much they're going to impact global gdp in the first half of 2022 you have covid probably causing behavioral changes and the spacs and crypto have been the repository of speculative fever. and if you recall it was around march that the very speculative names rolled over sharply and not until six months later the

s&p fell out of bed. six months after nasdaq peeked you're right the speculative issues may stall the bubbly action occurring later >> i wonder what you make of that and especially as we tie it to household levels of excess cash, stimulus payments and excess time as we have plenty of people at home with plenty of time to trade and try to exercise their bordm, i guess. what happens when you watch the saving rate, for example, come down to earth. >> you see an economy that slows and that's what our expectation is and why we're not quite as pessimistic about inflation as we are inevitably there's going to be a return to normalcy but i think really the two head

winds, the three head winds, inflation, what's happening with the pandemic and a tax policy, which will happen first or second quarter of next year. i think is going to bring things back down more to more reasonable sort of levels. you might say the market is in a bubble right now we have all the speculation and people are bored they could sell too. i mean, boardm doesn't mean mark lgts go up it means there's more volatility i think at this point it makes sense to get dividend stocks in your portfolio because if you have a portfolio strategy, you're going to probably cough when you see a slowdown in the market that's why i think all a return to cash flow names, fundamental analysis i know that's as boring as can be but fundamental analysis is going to make some sense >> i do find it interesting

you're looking for the correction in the first quarter, rather than later in the year where you do have the potential of facing a certainly more tight fed, which is going to come into play midterm elections and who knows whatever else could be down the pike. why do you think that correction's going to happen in the first few months, rather than later on? >> the market's a discounting mechanism always looking forward. the liquidity issue. the dollar rising and tightening financial conditions and i believe china and omicron are more near-term issues. i agree you have to go into cyclicals, relatives to defenses lines up closely since the march covid low and below that as you go into staples, health care telecommunications, you

find defense as you enter 2022 >> i appreciate it wish you both a happy new year i'm sure we'll talk to you often in 2022. >> as we head to break, check out the biggest gainers on the s&p for the year you can see energy names up top there. 12 constituents. more than doubling this year you will bow happy if you have one t nesn ur rtfolio. iyo stay with us preparing for the half hour status meeting. orrr... you could cancel the meeting and share updates in slack instead. it's where your whole team is in one place so everyone can stay up to date. slack. where the future works.

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it's been a difficult year for some streamers disney and roku seeing sharp decline in share prices. and other nonmedia revenue streams have provided investors with better returns. joining us for more on the stre streaming landscape. heather, it's good to have you

i saw this headline this morning about collective streaming budgets for 2022 $115 billion they say it's mind boggling. >> it's the hay day of streaming. and shows where the focus is going to be. the fuch streaming and it's the present as well. all the budgets need to be focussed on attaining new subscribers if you're competing to win your spot and compete with netflix at the top of the food chain or if you're netflix, continuing to double down and make sure you have a great defense to keep all your subscribers engaged. >> we mention some of the players that havae ancillary muh stronger than their plays.

are you looking for hedge funds across a bunch of different bask ltsz >> i think it's clear you need to hedge your bets against different baskets. and viacom with nickelodeon in march and in theme parks with nbc universal in the mix there i think we're going to expect to see netflix diversify get flg to gaming and commerce as well. i think the name of the game is double down on your universes that you can expand into new shows and moveies, as well as expansions in the real world people can spend more money on and really own as fans >> how sustainable is the spending spree obviously a lot of streamers have gotten going in the last few years. but how long is that going to last as the streamers do engage

in, as carl mentioned $100 billion worth of spending on content. >> i think we've seen the strategy with netflix. there's a huge transition a major media companies and it's praufedible and streaming as well and over time, it's alvery exciting business and ultimately going to be very valuable once you own the customer because of the data you can rely on there to expand as well. what is streamers are seeing to

be most lucrative right now? >> i think it's a combination of the premier kids programming, which is a must have for all parents as well as premium drama and scripted reality tv has always been the most profitable but it is really not -- it doesn't get new subs it's not going to be an acquisition driver can be great for engagement. the example for next year, which is exciting for all of us of discovery place is a perfect combination because you have all of the league content coming out of hbo max as well as what you see from discovery plus. shows that were spread across platforms or licensed because they wanted broad viewership and

they get more protective against certain assets, say s and, l for example. between hulu and peacock does that end up being a trump card for budding platforms that have, for instance, a well-known show with good 2022 and 2023 ars in terms of all of those assets going back from the licensing structure that we've been enjoying and being able to access major content disney and nbc universal and fox and so in 2022 you're going to see some real challenges for hbo max, for example, which is losing its deals with nbc universal on the movie side as well as tv programming as those companies take their assets back for their own streaming services and,

really, a game of shoring up your own content and doubling down on the ip that is known as well as what we're going to be seeing as an expansion in the independent production realm you're already seeing companies, you know, really invest more in independent content and the value of that content is going up you're seeing roll up with what kevin mayor is doing with blackstone and reece witherspoon hello sunshine and other companies that are independent of these streaming services and will be able to sell to the highest bidder >> that's going to be fascinating. we didn't even get to pricing or international or some of the other dynamics that are going to guide the industry overall that's fodder for our future discussions, heather thank you so much. >> thank you so much good to see you, as well still to come this morning on "techcheck" fintech did promise to disrupt the payment business been a tough year for a bunch of players like affirm and sofi and

coinbase can those names bounce back in 2022 we'll talk about that at the top of theou hr. in the meantime, "squawk on the street" is back after this

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welcome back to "squawk on the street." i'm rahel solomon. in technology we're seeing outperformance among several chipmakers and that includes micron and lam research and micron up 2.6% and storage names are higher with western digital and the best performer in the digital today and tracking for its best annual gain since 2009. scott. >> all right, rahel, appreciate it coming up on "halftime report" little more than an hour one of barron's top advisors with us. p find out if the investment committee agrees with what respondents thad to say about te market view in 2022 and where you should be invested right now. meantime "squawk on the

street" will be right back don't go anywhere.

welcome back to "squawk on the street." more and more investors looking at company's esg scores before

making investment decisions but are those scores even accurate christina has that for us. the cliff notes don't always work, do they? >> when we think of esg we think of one's impact on the environment but measure the risk the world poses on the company and its bottom line. sift slow variables on how a company sources water or deals with corruption and they crunch those numbers and come up with a single esg rating. i asked the global head at s&p global why scores aren't consistent among agencies. >> the metrics and the indicators that companies have to report are changing, there's often not standardized guidelines on how companies should be talking about this >> and metrics vary. take for example ibm they get a 51 out of 100 and 73 out of 100 and philip morris gets an average score from msci and a high score from s&p global

the sg data is so noisy that some choose to ignore it altogether the world's largest believes esg ratings rarely help and instead using tools for picking climate friendly investments the disconnect between esg and environmental impact >> all right good stuff, kate, thank you. that does it for "squawk on the street." "techcheck" begins right now. good wednesday morning welcome to "techcheck" i'm carl quintanilla and deidre bosa. the sector closes out a tough 2021 we're going to break down how the disrupters