the year, it's been great to be here with you, frank, on "power lunch. that is going to be it for us here today with the dow up 108 points let's see if it can hang onto those gains into the close >> that's right. "closing bell" starts right now. ♪ welcome to the "closing bell," everyone. i'm wilfred frost of the new york stock exchange. another mixed session on wall street the dow could turn its sixth winning day in a row and could notch its first record close since early november >> welcome, everyone i'm sara eisen let's look at what is driving the action in this final hour of trade. treasury yields seeing a meaningful move higher today the 10-year yield now comfortably back above that 1.5% level. that is putting pressure on tech stocks chinese technology companies getting hit particularly hard. and shares of biogen rocketing higher on a report this afternoon it's in negotiations to be acquired by samsung of more than $40 billion.

59 minutes left to go here in the session. >> coming up on the show today, investor dan niles cashed in on a number of his picks for the year including oracle and jp morgan and today he's joining us with his top five list for 2022 plus, the u.s. setting a record for daily average covid cases, and the cdc easing its quarantine rules we've got a lot of ground of cover when we're joined by white house chief medical adviser dr. anthony fauci. >> looking forward to that, of course but first let's focus on the big stories we're following right now. we are going to talk about the blockbuster report on samsung. and watching the crypto space amid this week's increased volatility, a down day here for bitcoin. let's get right to it with the breaking news on biogen moving the stock sharply higher on this report that samsung is in talks to buy if for $40 billion, how much credence should investors put in this one? >> great to be here with you

on one hand, i don't think it's totally shocking biogen has been a terrible stock all year. when stocks get this cheap, they're potential takeout targets. on the other hand, it's an interesting buyer, it's one report out of korea. so, not shocking but we need to see what develops. >> they have a joint deal, i think, a joint venture, michael, to develop biopharmaceuticals so it's not completely out of nowhere that samsung would be interested what about the price, though biogen, has been a pretty big underperformer it's, what, a little bit of a premium to biogen's latest price, but nothing huge. >> yeah. on one hand, i do think that it's interesting because the price is only at 25% premium but what we are seeing is that we think because a major readout

later in 2022 and because of the huge valuation change that that could result if this new alzheimer's drug works, there might be to be a contingent value right payment that would have to be paid over time. it may be a little bit of a complicated deal without getting into too much of the weeds on that, it could be a reasonable price for the base business, and a further cvr for whether alzheimer's plays out. that might be a good end result for shareholders >> it's not a total surprise, but samsung's healthcare business with more medical devices than pharma. is biogen in a weak position at the moment will they have to accept any sort of offer? or do you see this now going quite dragging out and possibly others coming into play? >> well, i think the good news certainly for investors is this

does present some sort of floor for the stock now that this seems to be out there and discussions could be ongoing i do think there could be other suitors for biogen big pharma, pfizer, merck, a lot of players aren't even in the alzheimer's game that said, while people may want the base business and there is 10, $11 billion of other products out there, the alzheimer's part would be a potential lottery ticket, call option, or cvr payment for the future if it works, then the suitor could have that ticket in hand and pay for it if it does work i hope that makes sense. >> how likely is that to happen, michael? because there's been a lot of drama with this biogen alzheimer's drug and the fda >> yeah. i think that's why a cvr makes sense. you have payments made as things get approved, as sales milestones hit those things have happened in

the past different players had those types of things when they had a takeout situation. look, i think it is possible and to answer your question directly, i think that biogen is in what of a weak situation. they lost their head of r&d a couple weeks ago they've had significant turnover there's a lot of media press about how the ceo is in a tight situation as well. there is an activist type player on the board with alex denner. i think all of those things seem to line up, weaker situation, a takeout would be a good scenario, i think, with a cvr. so i hope that makes sense >> michael, thanks for joining us at short notice biogen up about 10% on that potential deal news. let's pivot now to the broader markets as the dow looks to extend its winning streak mike santoli's tracking all the action for us. mike, what's the latest? >> yeah, wolf. market continues to kind of hold steady here at the highs lots of mixed action under the surface.

some of the big winners in the nasdaq like nvidia and and if you look at the s&p 500 year-to-date and connect all of the highs since about march, it creates this kind of nice straight-line angle that would basically project up to just a little over 4,800 on the s&p, in other words, we're very much in the bumping toward the upper end of that trend channel there. again, not too super overbought, but it sort of shows you have reasserted that trend. whether the market is inclusive enough, how does breath look is it just a few stocks driving things it's kind of a yes and no answer to that. if you look at how the top 50 stocks in the market, the largest 50 have clearly outperformed, they'd contradicted much more to the total upside than the rest of the market but the russell 2000 as a whole has done just fine it's more or less kept pace with the s&p 500. now, the equal weighted version of the russell 2000, that's the

same amount owned in 1,000 big stocks, has also done well it's up more than 20%. but you see the big gap between that and the larger stocks you can say there's been a laggard effect and they haven't done much in terms of further upside to me, it's not obscuring some kind of scary macro story under the surface. now, there has been a slight defensive turn in december utilities, staples, healthcare have been clear outperformers in december relative to the s&p 500 and some more cyclical groups. that also might just be mean reversion. they are deep underperformers on a year-to-date basis that's something you'll have to monitor to see if it becomes more of a message that we're getting into a mature part of the cycle. >> buying the losers we'll turn now to the crypto market because bitcoin is having a volatile session following tuesday's downturn still sitting below $5,000

frank holland with a closer look for us at what is behind these moves. frank? >> hey there, sara not just bitcoin ethereum on its worst. as investors shift away from riskier assets with the emergence of omicron you can see the initial spike on the vix when that omicron news hit. and crypto also fell too but even as that settled, investors just have not returned to cryptocurrency. crypto stocks, whether holding or mining, deeply impacted by the correlation between the assets and the stocks. coinbase, micro strategy, riot, marathon, all those stocks falling even more than the coins. crypto declines are part profit taking and investors focusing on other areas of blockchain. >> funds like mine are focused on those early growth opportunities. and, so, that's where the metaverse comes in that's where interoperability comes in that's where game-fi and de-fi

comes in that is where a lot of the growth is. >> the $1.5 trillion in direct covid stimulus also seen as a major tailwind as that stimulus winds down, investors closely watching the price action. sara and wolf, back over to you. >> frank, thanks so much don't miss tonight's special report "crypto night in america. melissa lee is breaking down top trends and looking ahead to what could be in store for crypto heading into the new year. up next on "closing bell," two-thirds of this year's ipos currently sitting below their offering price, according to a new report in the "wall street journal. we'll ask a top vc what's behind the lag and whether 2022 will be a better year for newcomers. you're watching "closing bell" on cnbc. ♪

on "squawk box," what's ahead for moderna in the new year how can their company rebound from recent volatility and variant challenges what investors small businesses like yours make gift-giving possible. now, comcast business has an exclusive gift for you. introducing the gift of savings sale. for a limited time, ask how to get a great deal for your business. and get up to a $500 prepaid card with select bundles when you switch to the network that can deliver gig speeds to the most businesses. or get started with internet and voice for $64.99 per month with a 2-year price guarantee. give your business the gift of savings today. comcast business. powering possibilities.

2021 was a record-breaking year for the ipo market. but 63% of those companies are trading below their ipo price. didi, robin hood all down more than 50% joining us now santos from venture partners thank you for joining us i guess, reframe that as a disappointing year for ipos. i guess that is for the end investor, for you the vc firm that is therefore realizing early-stage investments is value and for the investment banks i guess has been a resoundingly successful year. >> yes and no. there are two sides to this story. the pre-ipo market was humming

it was a record year in many respects, the number of unicorns that came, the number of fundraising that was done. so all of these companies were flush with cash. their ipo timelines got pulled forward because of the rush to get out there, the pandemic did it anything with cloud, anything with supply change, anything that all the buzzwords, they just got pulled forward, they just wanted to ride this wave. so you saw some of the companies, the gates open too wide, too soon for some companies. and that's what happened initially they came out, but then the whole appetite for risk change, the investors were not happy with this high-flying stocks without any profits so suddenly the rules on them change, and they suffered. but they are good companies, they will come together in the end. but they just came out too soon too fast >> how are the valuations in the private market, santyoesh?

are you now making more gains between series a to series b, c, d than you are when the company actually becomes public and it's life it's a public company >> a lot of these crossover funds are coming over. there's a change in the mix of the private markets. they're getting out early, the traditional vcs. but the public market investors are coming in, the crossover funds, and they're driving up the valuations of late-stage companies. so there is definitely a run-up to valuation ahead of this thing. and they just can't keep up in the public markets there you are valued differently. and the crossover funds want a bigger allocation, therefore longer term. there are different reasons why they want to come in but in the rush the demand is driving up the price in the late-stage companies and that's what you're seeing there. there is definitely a run-up in valuation early stage -- late stage rather, but the public market, it's not that forgiving

when companies all have profits or path to profitability >> so what happens with all that next year? does it send a chill through the ipo market, for other companies that are waiting in the wings? >> no. i think there will be lessons learned. i think you have to have a good business model you have to have a clear path to profitability. there will be more discipline of rationality in the markets that's good, it's a healthy process, and this happens all the time so it just goes ahead, then comes back i think you're going to see a more rational market this tremendous iteration going on, tremendous innovative companies on the sidelines waiting to come on, and you'll see that they will continue to do well. the supply will be less. that was another reason also there was so much supply so i think that also got diluted. the money was spread out but i think you're going to see less companies, more quality companies in 2022.

>> wanted to ask you about one of your portfolio companies, which is spacex. i think you've been in there for a long time. there's this brewing battle between spacex and elon musk and china. it's become a bit of a war of words with china now bashing musk for crowding out some of the chinese space station. what is the deal here, and how serious are the ramifications for spacex >> yeah. i think this is just the beginning. there are so many more satellites coming in orbit you're going to see a lot more incidents such as this in this scenario, i was reading about it, i think tesla has more to lose. he's built this good thing in china, he doesn't want to lose that and tesla is 20% of his business so i don't think he wants to really be on the wrong side of the chinese authorities. but there is no central authority in the space right

now. there's no one coordinating everything and we need to get there, and i think there is movement to get there to have some kind of rules of the game. but a lot more satellites are coming on, spacex themselves, they have 1,800 right now. they want to get to 20,000 or 30,000 satellites. but you're going to see a lot more bumping around, a lot more close calls. there has to be some mechanism, and the technology is being worked on, on how to avoid collisions and how to avoid debris in the space. but that's going to take a long time, as elon himself said, space is hard, hard, hard. i think that's his court and it's going to take a long time to get it all together, this tremendous boom in space economy, but there's going to be some confusion and chaos for a while. >> i think what you said about potential backlash for teslas is pretty interesting santosh, thank you for joining us >> thanks for having me. up next, speaking of elon,

musk unloading another big chunk of tesla shares. we'll tell you whether you should expect more selling from the world's richest man. plus, did any ev companies make dan niles' list for 2022? he will reveal his best ideas for the new year he had some really good ones last year, including oracle and energy rostng performers. we'll be right back.

checking crypto in the new year is digital currency and inflation safe haven the future of stablecoins,

regulatory crackdowns, and exploring the metaverse. "crypto night in america," tonight 6:00 p.m. eastern. watch or listen live on the cnbc app. 38 minutes left of trading tesla's ceo elon musk going on another stock-selling spree. according to sec filings, musk sold more than 934,000 tesla shares or about a billion dollars worth of holdings yesterday. he also converted most than 1 1.5 million options. it could signal an end to musk's selling, at least here in the short term musk has sold more than 15 million shares since last month. remember he put out that twitter poll asking if he should be selling.

he tweeted users asking if he should be selling 10% of his tesla stock. they said yes overwhelmingly and he has been doing so shares of tesla initially popped in the premarket on the news earlier of that sale it's turned a little bit lower, down 0.2 it was weak during the early part of that, it hasn't rebounded. i think what santosh rao just told us about the potential heat tesla could be facing in china given the spacex issue and the chinese authorities getting mad at him for threatening their space station is interesting because a lot of people think one of the bull cases on this stock is china and the chinese market, and musk has been doing a delicate dance here. >> for sure. now, the stock is 12% off its high when the rest of the market is of course at a high yet, it's up so much more than the overall tape is this year. so it's hard to really tease out exactly what the insider selling effect should be by rights, it shouldn't have had

that much oven effect on the price. why? tesla trades more in daily dollar volume than basically any stock on the planet. it's done $18 billion worth today, twice as much as any other nasdaq stock it should be able to absorb it these founder or near founder ceos, they sell stock all the time zuckerberg sells every day bezos sells every day. he had to make it his supposed catering to his constituency so, i think it was fitting all around in that sense >> well, i get your point on the volume, mike and i get your point that some ceos are selling every day or every week but musk wasn't. and the volume of his selling is large relative to what he absolutely needed to sell for tax purposes, which is how harry framed it early on

it's a signal he is sending to investors. microsoft is pretty much back to its all-time high. he sold half of his stake which is very rare for him to do so. and, again, neither of those two sales has signaled to the market which it could've done >> that's exactly right. musk -- he's often said all the way up that he thought tesla shares were too high that's kind of a humble brag to me but also the fact that he kind of got it out there that there were these kind of mechanical reasons that he needed to be selling to raise liquidity to pay taxes, otherwise these options expire so there was a bit of a prompt for the activity that being said, i'm very much with you that you could take a very broad view and say musk selling, bezos steps down, zuckerberg changes the name of his company because he seems not to like the social networking business dorsey leaving twitter you can create a story line that

says this generation of tech entrepreneurs feels as if me being in the short term is as good as it gets, but i'm not sure that's going to be a money-making option. after the break our can't-miss interview with dr. anthony fauci on the new cdc quarantine kwins, the explosive surge of omicron cases and what it all means for businesses and the economy. here's a check on bond yields getting a bit of a boost today the 10-year nicely above 1.5% once again, 155 essentially. we'll be back in a couple minutes.

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welcome back time for a cnbc news update with rahel solomon. hi, rahel. >> hi, wolf. and here's what's happening at this hour. authorities in two states are looking for the gunman who fatally shot an illinois deputy. the gunman is also suspected in a carjacking in missouri a couple of hours later. law enforcement agencies formed a procession to carry the deputy's body to a local coroner's office and new york city 30% of the fire department's ems workers are out sick as covid cases continue to rise that is well above the 25% peak early in the pandemic. 17% of firefighters are also out sick and opioid lawsuits against purdue pharma and the sackler family have been put on hold a judge has put an injunction. the judge also ordered renewed efforts towards a renewed

settlement after another judge rejected a previous deal you are now up to date sara, i'll send it back to you >> rahel, thank you. the seven-day average of covid-19 cases increasing nearly 73% over the week, hitting a record of more than 260,000 cases. meantime, the seven-day average of hospitalizations hitting its highest level since back in october, but some good news out of south africa and britain, data from those studies of those countries showing a reduced risk for hospitalization with the omicron variant compared to delta. here to break it all down is white house chief medical adviser dr. anthony fauci. dr. fauci, welcome back to the show it's good to have you. >> thank you for having me >> i did want to begin with the new cdc guidance around isolation, cutting the time for covid positives to five days from ten obviously huge issue for business as they try to get people back to work. and i've listened to some of your interviews and the cdc director's interviews about why this decision was made and i still think there is some confusion and questions that i

was hoping you could address, dr. fauci, about whether this decision was made based on the medical research, the studies, the science, and keeping people safe >> well, certainly that's the primary reason why you make any decision related to public health the cdc decision was made on the basis of the fact that when you have an asymptomatic person, the standard prior recommendation or guideline was to keep people isolated for ten days. when you're dealing now with an outbreak where the volume of new cases is very disruptive of society, you just gave a moment ago showing that about 30% of the new york city fire force is out sick that we need to keep society running in the sense of there are many other deleterious effects, healthwise effects, if

society is crippled in the sense of being functioning to keeping critical things going. so in order to address that, they looked for a balance between what is safe and scientifically based and what could get us to keep society running. and it was felt that if you look at the likelihood of there being spread of infection from an infected person in the first five days is much, much more risky as you get into the second half of the ten-day period, day six, seven, eight, nine, the chances of transmitting is very, very low and for that reason, a decision was made to strike a balance, keep people isolated for five days, and if they remain without symptoms, to go back to their normal function with the absolute requirement of wearing a mask at all times for those

second five days of the ten-day framework. >> and not have to take a test and i know there's been a lot of criticism and a lot of health professionals, dr. fauci, have come out and said it should've included a negative test after that fifth day and i know you've addressed that the antigen test, we just don't know how accurate or precise they are after five days but would you feel comfortable sitting next to someone in a meeting that after five days still tests positive on a rapid antigen test for covid >> you know, nothing is risk-free when you're dealing with covid but the risk is extremely low. and as the cdc director said at the press conference today, if you look at the predictive value that you might act on a result, it is not a predictive value that you can act on because if it's negative, it doesn't really necessarily tell you whether you're transmissible or not, and

if it's positive, we don't know what that means for transmissibility so if the end game is to prevent transmissibility in that second half of the ten-day period, wearing a mask consistently is the best way to do that. >> you mentioned the cdc director there, dr. fauci. dr. walensky also said that the shortening of the quarantine period, quote, really had a lot to do with what we thought people would be able to tolerate, end quote. was that comment a mistake does it suggest that you're no longer being guided just by the science? >> no. what dr. walensky was referring to is that when you want to get effectiveness of a particular intervention, there are a lot of considerations you always make science the major driving force. but you have to have a situation where people will be doing what

it is what you want them to do and what's best for them so science is always the dominant driving force but she was referring to other considerations such as many people even when they know they're infected don't isolate so what she was saying, let's have a balance of making sure the science is solid but something that people will be able to implement. that's what she was referring to >> switching focus a little bit, dr. fauci. i wondered whether you felt there had been a communication error from government officials throughout this pandemic by suggesting initially that the primary reason to get vaccinated was to prevent you getting covid at all, as opposed to reducing the severity if you do or when you do catch it, and whether we're now in rather an awkward position given that earlier

calms that so many people are catching covid, if they have already received a vaccination, even if they've received a booster. it kind of puts quite an awkward spin on things now >> well, i think it was the question of what people interpreted. if you looked at the clinical trial, tens of thousands of people in the original clinical trials, for example with moderna and pfizer, the primary end point that led to the 94 and 95% efficacy in those trials was prevention of symptomatic disease, not prevention of infection. so, although -- you're absolutely correct, there was a lot of people understandably felt that i'm not going to get infected at all. the primary reason is to prevent you from getting symptomatic disease, but, importantly, to prevent you from getting serious disease. now that could have been done better communicating to the

public, i admit. but that is where we stand the goal is to make sure people don't get sick getting a positive test and being asymptomatic, so long as you don't spread it to someone else, is a reasonably good outcome of getting vaccinated when you don't get sick. >> thus, dr. fauci, can you understand why some people are anti-vaxxers, given how they first understood the communication and the results that you see today can you understand how it's possible for some people to have reached that conclusion? whether it was incorrect interpretation of your messaging in the first place or not. >> i would have to beg to differ with you i believe when you look at the people who are anti-vaxx, they are fundamentally anti-vaxx, saying i don't want anybody to tell me what i can do with my body it is not because there's a

difference between getting infected and getting symptoms. i'm very sorry, sir, i would have to disagree with you on that if you go and do a survey of anti-vaxxers, they don't tell you that's the reason why they don't want to get vaccinated they tell you they don't want to get vaccinated because they're fundamentally against vaccination, particularly when the government tells you it's something you should be doing. >> in the meantime here in new york city, i can't find a test still in the drug stores, and this is obviously a big problem that's spreading around the country. i know you guys are working to address this what i think is a question, though, dr. fauci, is how are we this unprepared two years into the pandemic when we have known from very early on that testing is such a critical part of controlling this pandemic? >> well, you know, when a year ago in the beginning of the administration there were no rapid tests, zero. now there are eight and likely will be nine and ten soon.

but your point is well taken we have a rush now on tests that, in some respects, is a good thing because we want people to get tested but you're right, we need to do better it will get much, much better in january where there will be 500 million tests available within the first couple of weeks in january followed by the availability of 200 million to 500 million tests per month, together with about 10,000 testing centers, as well as the ability to go online, order a test, and have it be delivered to your home free. so right now at this moment we're not where we want to be for sure but this is going to change pretty quickly as we go into january. >> also wanted to ask you about another key topic for business

and the economy, getting it open and controlling the spread, which is this potential of a domestic travel vaccine mandate. it's something you've talked about, it was shot down a little bit by the cdc director recently where are you on recommending that to president biden? why wouldn't you recommend that at this point? >> well, i think why don't we get it straight, nothing was said and nothing was shot down here's the situation when you talk about different interventions, one of which would be a requirement for vaccination for travel i had said, and i'll say it again to you for clarity, that that is something that is on the table that we consider, we consider all possible interventions, and to whether or not it's appropriate to make that implementation of that intervention if things change and the situation changes that would warrant making requirement on a

plane domestically being a requirement and the data shows that that would be helpful, we would do it. right now the most important way to keep yourself safe on a plane is to wear a mask, which is actually a requirement on a plane. that's very different from a requirement internationally where the fundamental reason for having people have a requirement for a vaccination when they want to enter the country is to keep out of the country infected people, particularly who might be carrying a new variant. so there really is a difference between international and domestic in the fundamental reason why you do or do not require a mask >> dr. fauci, i wanted to ask what your take was on the way in which omicron is clearly spreading fast and daily case numbers are very high, even in the countries that have taken more stringent lockdown measures

during this latest spike, continental europe, i guess, is a particular example does it make you reassess the effectiveness of lockdowns, stringent lockdowns, as a tool to contain not just this spike but any potential future spike >> well, first of all, let's make it straight we are not contemplating a lockdown and i think when you look at countries that so-call lockdown, the lockdowns are not really complete i don't know of any country right now that unless there is, you know, one or two exceptions that are completely locked down. they're making restrictions greater but not completely locking down >> a new study, dr. fauci, out of south africa, indicated that omicron could displace delta and likely has immune protection or antibody protection against delta. if that proves to be true, how likely is it that this surge that we are seeing right now of

omicron in the u.s. could ultimately result in the end of the pandemic >> well, i would hope that that's the case. there's no guarantee that that would happen but if you have a very transmissible virus that replaces another virus, and that virus has less of a degree of severity, that would be a positive outcome but you can never guarantee this virus has fooled us before remember we thought with the vaccines everything was going to be fine. and along came delta, which threw a monkey wrench into everything then we were going along with delta, and then we have a new variant of omicron so, although we are pleased to see that the results from south africa and now the uk and to some extent in our own country that it appears to be less severe and we would rather have a less severe situation than one in which there's a great degree of severity. what you say ispossible that

that would happen. but there's no guarantee that that would mean the end of a serious outbreak i hope that's what's being foreshown that we're going to be seeing it. >> me too. >> hope so but can't guarantee it >> any sense of when this is going to peak, this surge? >> you know, it's tough to say it certainly peaked pretty quickly in south africa. it went up almost vertically and turned around very quickly i would imagine, given the size of our country and the diversity of vaccination versus not vaccination, that it likely will be more than a couple of weeks probably by the end of january, i would think. >> end of january, all right dr. fauci, thank you for joining us with an update. >> my pleasure good to be with you. >> we certainly do appreciate the time, dr. fauci. and, sara, i don't know if dr. fauci's still listening it, but he doesn't need to apologize

when he wants to push back loud and clear to any of our questions. that's exactly the point and why we like having him on and giving us that time to quiz him still ahead, real money in virtual clothing, perhaps. we'll talk to the co-founder of rent the runway about the rise of retail in the metaverse and which companies are best positioned to cash in. we'll be right back. g. [coins clinking in jar] ♪ you can get it if you really want it, by jimmy cliff ♪ ♪ [suitcase closing] [gusts of wind] [gusts of wind] [ding]

after the break, the old guard versus the new we'll tell you about the battles brewing in payment stocks and energy names when we take you inside the "market zone. we've got 11 minutes left of trading, and we are making session highs just hit an intraday record on the dow, which is up 170 points almost, and tracking for a record close on the s&p 500 and the dow,

nc'sirwould be the dow fst sie november we'll be right back.

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funds and whether the esg scores given to companies actually make a difference and mean anything that's all coming in the second hour but first of all, we have just six minutes left in the trading day. mike santoli, and we've got jason from odyssey capital advisers mike, a very nice rally into the close. >> yeah. obviously it's a bit of a drift as opposed to a stampede but racking up the score in a year and a month already being won by the bulls, also still a little bit on the more defensive laggard side a lot of pharma and staples in the leaders today. but obviously also still a pretty firm tone, a lot of selling got done in november into december. that's for sure. >> jason, do you make much of these end-of-year moves? and how are you set up for 2022? >> good to see you happy holidays so for us i think looking at the market this month, obviously

there's been a shift in tone and sentiment. staples are up almost 10% up to date i think a lot of focus is on the fed. moving from price to earnings, price to sales, i should say due to a price to earnings market. and i really think fundamentals in earnings growth is going to be very important looking into 2022 so for us the sectors that we like are financials in healthcare i think there are opportunities there in both of those sectors and i think that's where you'll see some earnings growth going into 2022. >> let's zero in on flex it is on track to log the best returns of any energy sector this year. the s&p energy sector, which is oil and gas companies up nearly 50% for its best year on record. meantime, the invesco solar fund

is down 26% for 2021 this is a flip from last year when oil and gas companies had their worst year, while solar stocks had their best. within oil and gas, upstream names have been particularly strong with the sop gaining about 70%. despite solars declines this year wall street analysts are generally optimistic sun run solar are some of the top picks. guys, back to you. >> pippa stevens, thank you. is there an opportunity there, jason, in the solar names in particular as a longer-term play despite some of the setback around build back better not getting done by the end of the year >> so for us on the solar stock and energy names, obviously they struggled this year. -- down 25% year-to-date

but energy has led the market 50% year-to-date i would say there's absolutely long-term secular trends for a lot of these names in the clean energy space i think they just -- you know, a lot of them are high multiple names. and there has been some news floating around, some of the tax benefits might be taking off the table. so i think those are some of the headwinds that have kind of pulled some of these names but i do think long term there's opportunity. >> affirm adding to the pain in a number of fintech stocks over the past month but the traditional payment companies doing better deirdre bosa's got a breakdown for us >> it was supposed tomorrow the rise of crypto, buy now pay later, digital commerce. but as 2021 comes to a close, investors, they're shunning the disruptors and moving back towards the legacy players payments giants visa, mastercard

each up more than 10% over the last month affirm, sofi, robinhood are down double digits. it could be a sign that hype is wearing off or habits are hard to change. guys >> deirdre bosa, thank you we've got two minutes to go here in the trading day mike, what are you seeing in the market internals as we look toward a double record close, the dow and the s&p? >> yeah. a little bit mixed actually below the surface. started off on the weaker side in terms of advancing versus declining. it's kind of staying a little bit challenged relative to how the top-line indexes has done. definitely weaker on the nasdaq. still more than 400 net new 52-week lows on the nasdaq today. that's almost 10% of the list. a lot of small stocks being just jettisoned here. i want to look at semiconductors they've kind of swapped leadership a couple of times

this year. semis now reasserted themselves. we'll see if banks can hang in both of them pointing in the right direction on a 12-month basis. banks seem like they probably have to before there's really a breakdown. volatility index really has given way. a click below 17 earlier obviously these calm days end of the year record highs would suggest that we actually should see some softening of the volatility measures. guys >> one minute left of the session. we've just pulled back a fraction in the last ten minutes or so but we are still high enough for a record closing high on both the s&p 500 and the dow if we hold at these levels of course the s&p had one two days ago and a very slight pullback yesterday the dow has not had a record closing high for a little while now but likely to get as things stand. healthcare, utilities the best-performing sectors. energy the worst-performing sector after a decent start to

the week the vix pulling back a little bit to 17. bitcoin not bouncing but not falling back as much as it had over prior days. as we approach the closing bell, a record closing high just about for the s&p 500 by a point or so, and for the dow also quite comfortably up a third of 1% the nasdaq is negative ♪ >> that'll do it looks like a double record close. welcome back, everyone, to "closing bell. i'm sara eisen along with wilfred frost. and mike santoli, cnbc's senior markets commentator. coming up this hour, investor dan niles lays out his five best ideas for the new year, including one tech mega cap that is up more than 60% in 2021. plus, we'll talk to rent the runway co-founder and venture capitalist jenny fleiss about the big money opportunities in the retail space first up, though, on this close, jason snipe from odyssey capital

advisers is still with us, as well as mike santoli a record close for the dow, which is a little bit more meaningful given we haven't seen that since november. nasdaq underperforms today, and so do the small caps what does that tell you with the narrative still pretty much being around omicron >> so, even if i think about omicron for an example obviously cases are surging, which is very concerning but hospitalizations and deaths are not. i think that's playing out into the dow obviously in this kind of experience, really a santa claus rally over the last few days also, there's a lot of data that's behind us there is not much news over the last few days. and i think earnings will be the next catalyst for us going forward. but, obviously, it's great movement, and i think earns will be important to look at it over the next few days as we kind of move to turn the calendar to 2022 >> mike, i know we always make comparisons to past years and histories to which this is the closest to

s&p 500 up pretty much 30% total return have we ever had those sorts of levels of return without any 10% pullbacks? is this a first? >> no, not a first 2013 was a classic year when we were up almost exactly 30% of the total return basis as well and it was very similar in terms of the trajectory of this year that's one of those years, again, a post-election year, as was 2017, which was a lower return lots of rotations protected the indexes. the big question is what tends to follow those years? well, the probability says maybe a little bit more choppiness, 2018 we ran into that with a really huge head of steam, big peak in january of 2018. and then it was kind of sideways and chopping around and we did have that big selloff in the fourth quarter 2014, on the other hand, which followed this really great levitation in 2013, it was a little more volatile, but it was still a positive year.

this is the third straight year basically of 20% gains or more the only time you've had a really great calendar year following that type of a streak was in the late '90s when you didn't go on to have great years two years following such a three-year streak. >> let's bring in cfra research chief investment strategist sam stoval as well i think the most clear conclusion was you think there's going to be a lot more volatility next year is that with overall positive return to the s&p 500? or is that not certain at this stage? >> no. we're looking for positive return our year-end target is 5,024 for the s&p 500, which equals about a 5% price appreciation from recent highs and our expectation is that we are likely to see increased volatility just looking at a simple backdrop, we're expecting the second year of this president's term in office typically called

the sophomore slump, which usually sees a 40% increase in volatility as compared with the other three years of the presidential cycle, and the second and third quarters which are traditionally negative, have seen increases of 30 and 80% respectively in terms of volatility >> what does the data show, sam? what does it show on fed interest rate hikes? because we are looking at a few, markets eyeing two or three potentially early of next year >> absolutely, sara. well, first off, the analysis shows that there is a very sharp negative correlation between interest rates and pd ratios in fact, minus 0.5 so typically when rates go up, pe ratios go down. when we're close to about a 2%,

10-year yield is 18 versus the more than 21 that we're looking at today so, if history repeats, and obviously there's no guarantee it will, we could see some multiple contraction in 2022 >> so, mike, coming with that in mind to microsoft, which you described earlier today as richly valued but not overly so. break it -- qualify that for us. break it down. what's it on at the moment, and why is it not overly richly valued >> well, i would basically say let's say mid-30s, clearly it's been the biggest contributor to the upside in the s&p this year. you could look at other, you know, very predictable mega cap growth stocks and say this is kind of what the market is paying for, alphabet's a little bit below that but also had a great year i also would go back to if we're really going to compare it to the heyday of microsoft when it

traded 50, 60 times earnings, that to me would be the wild stuff. and it's interesting because the market is much more kind of placing a premium in these instances on the predictability right now as opposed to kind of these really aggressive predictions of just exactly how fast things can grow we might be going into a year where earnings growth could be a little more selective and it retains that kind of a premium i think it's much more about will there be other themes that allow the rest of the market, you know, to kind of support the indexes and find other ways to kind of go higher rather than just something like a microsoft going up 50% in a year >> speaking of tech broadly, and, jason, with what sam said about the fed, and we all know that fed hikes interest rates, multiples tend to contract what does that mean for the nasdaq in particular because it really is a tail of two different types of tech stocks, the mega caps which act sort of defensive when there's a

slowdown and some of the more high flyers, the unprofitable names, the arc names what do you do with tech, broadly, next year >> yeah. so, i agree with sam i think obviously all those points are duly noted in a raising interest rate environment, a lot of the high multiples which we've talked about ad nauseam for the last several months will feel some pain so i do think, you know, a name like microsoft, for example, has 140 billion cash flow. to your point, sara, a lot of these names act defensively and i think they are just fine but some of the high multiple names i think will experience some pain, particularly in the second half of the year as i think we move into a raising rate environment and also we're also going to be dealing with midterms at the end of next year i think that's absolutely a good call here. >> sam, which sectors do you think are most vulnerable to multiple compression

>> right now one of those groups is consumer discretionary. right now it's trading at a more than 31 multiple to 2022 estimates. so, if we do end up seeing interest rates rise, then that could put a lid on retail spending and consumer demand if you also think that it's going to be a repeat of the 1970s, well, then energy tended to be on the top whereas tech was on the bottom along with consumer discretionary so, it's usually the growth that's on the bottom, value and defensives that are on the top >> so, is that why in december, sam, you think consumer staples and utilities have been the best performers the worst on the year but the best so far in the last few weeks. >> you're right. and actually going back over the last 31 years, utilities has been the best-performing sector in december. and technology has been the worst performer. but what you get in one month,

you tend to surrender in the next month and, on average in january, we've had tech by far the best-performing sector of about three times as much as the second-place sector, which was consumer discretionary so, if you're thinking about volatility, then the swap from what you see in december into january will be pronounced >> sam stovall, can always count on you for all the historical data thank you for joining us >> my pleasure jason, before we let you go, we wanted to zone in here on the "market zone" on one of your best trade ideas what is it >> yeah. so i really like palo alto here. it's been a great year they're up 60% year-to-date. there's a number of names in the space that has really done well. crowdstrike. but i think that they've spent a lot of money this year investing back into the business that i

think will be accretive going into next year unfortunately cybersecurity continues to be an issue, and names like this will benefit from the protection that we need to put in place from an enterprise business perspective. >> jason snipe, thanks for joining us much appreciated we are just getting started here on the second hour of "closing bell. after the break, one of dan niles' top picks for 2021 has seen gains of 50% this year. now he's back exclusively to give us his top five picks for next year. plus, biogen shares popping. we'll talk to a top analyst abt at touwhhat deal could look abt at touwhhat deal could look like, still later in the hour.ny delivers quality candidates matching your job description. visit indeed.com/hire

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all the major averages on pace to end the year high with the s&p 500 the best performer of the indices rallying by nearly 30% among the biggest sector leaders for 2021, energy, real estate, technology. for where he's finding opportunities heading into 2022, let's bring in portfolio manager dan niles who joins us in a "closing bell" exclusive dan, always good to see you. thanks for joining us. in fact, before we get to the picks for next year, kudos on the picks for this past year, in particular the xle energy stocks, oracle, and jp morgan up 30 to 50% respectively and what i think's interesting looking back on last year is those performers aren't what we typically think of dan niles tech investor. they're sort of value-type plays that perform well of your picks. >> yes i mean, i think with valuations where they are, i'm a reasonable

price type of investor i'm not a momentum investor by nature and i think with market valuations up at these levels, we've talked about it before, market cap to gdp, a 50-year average of 0.8 tech bubble peak at 1.4. i think you have to get more defensive as the market goes up, especially if you are finally in an environment where you have high inflation and a very aggressive fed probably coming up that's a much different backdrop than what you've seen for 13 years since the global feminancl crisis >> as we get into the picks for next year, two key areas carry through from last year, and that is energy and banks, though you're changing the specific picks. talk us through the reasons behind that and what those picks are. >> sure. if you look at oil prices last

year, they were up 58% -- or, sorry this year, which we're finishing up the year before they were actually down 21%. but oil demand was at about 99.6 million barrels per day back in 2019 where about 3 million or so barrels below that as we adjust to the fact that covid's going to be with us forever, become endemic and everybody kind of goes back to living life by the end of next year, i think you're going to see oil demand actually surpass the levels that it was in 2019 at the same time, you've got environmental concerns restricting the supply you're not handing out big drilling performance and this is across the globe, not just in the u.s. i think you're going to see oil prices head up into the 80s, 90s next year when you put those two things together. when you look at banks it's sort of a similar situation where you've got 10-year treasury sort of at that 1.6% level, 1.55 or

so and i think you're going to see that go well over 2%, probably in the first half of next year as the fed stops buying treasuries and starts raising rates. at the same time, with the easy money gone, people are going to have to go to the banks to get loans, and you're not going to get it from the fed or from the government you're going to go to a traditional bank so i think you'll see loan growth pick up hello? >> hey, dan, sorry, it's sara. i thought wilfred was getting in >> i thought you'd lost me >> gave you a lot of grief last year about oracle. called it boring you were right, really good call but you managed to pick one that was even more boring than oracle this year, which is cash

[ laughter ] >> yes that is definitely the most boring investment possible well, i think people 99% of the time owning cash is a bad idea the one time it ends up being a good idea is if you think you're going to get a big volatility event, big drawdown which we think you're going to see next year in the s&p 500. we think down 20% is very likely at some point during the year, if not more. and at that point you get to pick up a lot of really good stocks with that cash that you have in your portfolio and, so, for us, to a large degree it's one of our favorite picks going into this next year because i think the valuations the record levels with inflation at 40-year highs with an aggressive fed as well that's going to be cutting back on their bond purchases very quickly and then starting to raise rates i think in the first half of next year.

multiple times in that environment i think sitting on cash makes a lot of sense because when they start hammering the markets, they take everything down. they take the good stuff down with the bad stuff so you can pick up a lot of really good bargains because right now you're in grieve mode where everything kind of goes up, and those are two very different environments you're absolutely right, cash is way more boring than oracle, but i think it's going to look pretty smart at some point in the first half of next year. >> we've had three of your five picks so far the uso which comes in, in place of the xle and the kre regional banks index instead of jp morgan the last two picks you've gone for tech names talk us through what they both are and why. >> sure. facebook is more of a defensive tech pick if you want to look at it that way because you think about this last year and their guidance for next year you've got regulatory pressure

on them, you've obviously got all the social things where bad body image, et cetera of facebook, instagram, et cetera you've got people trying to break up mergers they've done in the past but most importantly, they've got their guidance for next year of expense growth of about 33% and cap x growth of about 66%. so you've got earnings forecasted to be up just 3% next year now everybody's talking about the metaverse, you've got to be in this stock or that stock. facebook literally changed its name to meta and those investments are for investments in the metaverse so, you put that together, the stock's trading at about a 22 multiple, the s&p's at about 21 times. i think you're going to see revenues come in better than forecast, profits come in better than forecast, and if you really like the metaverse, they've gone all in on it i think that's the name you want to be in because it gives you offense but with a lot of defense in the name where you

don't get that with a lot of incredibly high multiple stocks or names that don't have any earnings so we like that. google, that's probably the most risky because obviously google had a good year this year. but 10 to 15% of their revenue comes from verticals like travel, leisure, hotels, airlines s, where the world hasn't gone back to normal we canceled our vacation plans given what's going on. i'm glad we did. but i've also gotten three shots and so does the rest of my family as of this week so i think by the end of next year, all of those industries will be advertising again. it's 10 to 15% of google's revenues hopefully that gives them a little bit more ability to withstand any kind of slowdowns that we see next year. so that's why we like google for next year. and it's a 23 multiple, market's up 21 times. that's pretty cheap for a company that's growing revenues this fast.

we've got a write-up in more detail on danniles.com for all of our viewers who want to learn more >> always plugging it. i love it, dan so it seems like the biggest risk, i'm just thinking about it to your world view and some of your picks next year would be if the fed doesn't raise interest rates as aggressively as the market thinks or as people think if inflation starts to come down as you just said, you just canceled your own vacation yes, it's encouraging to see omicron isn't as threatening or severe perhaps or won't lead to quite the spike in hospitalizations but this is still happening, and it is spreading fast, and these positivity rates are scary, and people are making decisions. and the economy is showing signs that it's having an impact do you think the fed's really going to start hiking rates aggressively coming off of that kind of environment? >> absolutely. because here's why remember when they first made that switch, we had just had omicron start to pick up and people were, like, oh, the

fed won't be aggressive because they can't well, when you've got inflation sitting at 40-year highs, you've got a problem because half the population of the u.s. own stocks and that's great because that inflation in your gas bill, your home heating bill, your food is being offset by the fact that your stocks are going vertical but you've got the other half of your population which doesn't own stocks, about that 45% doesn't. they're impacted very much by the fact that food, energy, all these prices are going up, rents are going up a lot and where i'm talking about the website is we have a lot of the data that backs this up on why we think inflation's going to be persistent and if you remember we've been saying that all year really from the beginning of the year. so, i think with that backdrop for the least well-off portion of the population is getting hid the hardest, the fed has to focus on inflation you've had russia, brazil, over 20 central banks raise rates

multiple times you've had some over six times this year already because their populations aren't as well off as we are, fortunately so they're having to deal with it even more aggressively. >> dan, my final question was just to come back to the fact that you picked cash as one of your five stocks for the year ahead. and if you could just gauge for us the level of optimism or bearishness you have for the overall index levels for the year ahead is your own 20% cash at the moment, or is it not quite as clear as that? >> no. it's pretty high you're a pretty good guesser what i would say is that we almost put in -- well, yes, i think -- let me put it this way. i think the s&p can be down at least 20%. when you think of market multiples at 1.9 times, the peak of the tech bubble's 1.4, and the average market multiple is 0.8 in terms of market cap to

gdp. you can do the math and figure out what happens if things go really south you go back to the 1970s, the s&p multiple went from about 21, 22 times to seven times as you went from a low inflation environment in the 1960s to a high inflation environment in the 1970s. stock prices came down 50% so, you kind of want to extrapolate because it's really great to think, oh, we're in a global pandemic and the market was up 16% last year and it's up another 28% this year and clearly global pandemics don't count. or you go this is all driven by the fed and government stimulus which is going away because inflation's getting to be a massive problem globally that's a very different environment for market multiples and investing. so, that's kind of why we like cash quite a bit and i think what you're seeing in smaller cap stocks like the russell that peaked out, you can argue back in march, and it's down about 9%, and some of the carnage

you're seeing there, yeah, guys are crowding more into the microsofts and the apples, et cetera but that should worry you a little bit when you see that kind of divergence between the broader market like the russell and some of the mega caps that are driving the overall averages >> dan niles, happy new year thanks for joining us with some of those predictions >> thank you take care. >> not the most optimistic new year message coming up, a potential blockbuster biotech deal, shares of biogen surging, topping the s&p 500 today on a new report that it's in talks to be acquired we'll talk to an analyst about whether he thinks the deal could get done plus, we'll be joined by rent the runway co-founder jenny fleiss, her outlook for the retail world she's in venture capital right now. and later, are esg scores actually accurate? we'll discuss whether the systems in place are really measuring impact and what could be at stake as a result.

all atnd mth aore when "closing bell" comes back

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strengthen your financial plan for the new year. cnbc has the tools to help reach your investing and saving goals. sara eisen hosts "your money: 2022." continues tomorrow 6:00 p.m. eastern. watch or listen live on the cnbc app. shares of biogen soaring this afternoon following a report the company is in talks to be acquired by samsung in a deal worth $42 billion

the stock finishing higher today by 9.5%. he has a buy rating and a $362 price target on the stock, chris. a korean report says that samsung is in deal talks do you think this could happen >> hey, sara yeah, i think, you know, our take on this is we've certainly seen crazier deals and this actually, when you dig a little bit deeper into the details, samsung actually has stated specifically their strategy is to do more deals and specifically in a biopharma space. they have about $100 billion in cash and, so, i know this is just one publication out of korea, but when you do a little bit more digging, it does seem to make sense, especially given the history that these two firms have of having a jv, at least going back to 2011 >> what about the price? is it fair

>> yeah. i guess it depends on a fair to who. again, this would value biogen at about 15 times 2022 that's obviously not a massive premium over where it is now but for samsung, i think it would be considered, you know, pretty fair multiple to pay for a business like this absolutely. >> do other companies come into play, either the target or quisitor >> that's a good question. this is not certainly something we would have drawn up at the beginning of the day today is it possible some other company comes in over the top? certainly. in retrospect, and that's kind of how this plays out always when you see a deal announced like this, it makes perfect sense in retrospect, but not when you're looking forward. to me, i think there's a lot of stars that are aligning that

this might make sense. for somebody else to come in over the top possible, but i really don't see, you know, really an obvious player sort of tof fill that role >> i guess back to the price when i asked if it was fair, i'm sure fair for samsung but what about biogen shareholders specifically given the questions lingering out there about the future of the amyloid profile and their ability to fight alzheimer's. >> sure. i don't have a perfect polling of investors but i certainly got a lot of questions when this was announced. it's just my general sense that a lot of investors, people that own the stock are going to feel relief this is obviously been a name that's underperformed since the -- launch. it's been well-documented, the missteps, and the difficulty of that launch and the controversy around it. and they also have a base basis and their ms franchise, while

it's the largest, it's also the most vulnerable. i would argue there's certainly a population of investors that would take it. >> chris raymond, thanks for joining us much appreciated >> thank you after the break, strong holiday spending has retail investors cheering but what could be in store as omicron continues to spread? we'll discuss with the rent the runway co-founder jenny fleiss and speaking of the rise of omicron, we've just caught up with white house chief medical adviser dr. anthony fauci. what he had to say about the surge in omicron, telar. here. aspercreme arthritis. full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme.

tonight, the latest on the covid spike. shattering daily covid cases

time now for a cnbc news update with brian sullivan hi, brian. >> hi, wolf. thank you very much. here's what's happening at this hour the san antonio spurs and miami heat will not be playing tonight. the nba postponing the game after the heat were unable to suit up the minimum of eight players needed under league

rules. this is the tenth game postponed by the nba this season chicago is getting ready for a big show on new year's eve mayor lightfoot says the city is putting on its biggest-ever new year's eve firework display to ring in the year multiple outdoor viewing locations will be set up, and the show will be broadcast for those who prefer to stay home. freezing temperatures just north in wisconsin, causing multiple highway wrecks. the state police responding to hundreds of traffic incidents in just 24 hours. severe weather stretches west to nevada's lake tahoe as well where a state of emergency has been declared due to snowy conditions and up to seattle and portland, oregon, where another winter storm is on the way. more snow in the west and northwest to end the year. where it will come down and how it may cause even more cancelations and travel nightmares that is tonight on "the news" with shepard smith, 7:00 p.m. eastern we will see you there. sara, back to you.

>> looking forward to it brian, thank you retail and apparel names rallying today target, macy's, nordstrom, nike all outperforming the broader market the proshares online retail ticker oin on pace for its worst month since october 2018 names like real real, doordash rent the runway, while it rallied in today's session is still down about 60% since it went public back in october. joining us now for an exclusive interview is rent the runway co-founder and volition capital venture partner jenny fleiss jenny, welcome back. nice to see you. >> good to see you thanks for having me >> i definitely want to get into some of your ideas and where you're excited about in the startup world. but i do have to ask about rent the runway's debut you're still on the board, our founder. what do you think happened to the share price and why it sold off so sharply since the ipo

is it a narrative? is it the broader ipo market or is it just the business struggling to come back? >> in general, i think what we're seeing with many of the stocks that debuted in this past year, some of which you also just shared on the screen, is a lot of volatility and a lot of question marks around stocks that went public during this moment when the market is generally in a great place but there are still a lot of question marks in terms of a lot of the new players so i think they all need some time to settle you've got a lot of new business models, a lot of analysts trying to figure out the right way to read and interpret numbers and think about complex business models so i think we'll see stabilization, but it'll take time, there's a lot of new players out there. >> it does raise the question about now or whether a few months ago was the right time to go public. any regrets on that front? >> you know, i think for us at rent the runway and likely many of these other businesses, whether you think of realreal,

airbnb, you don't know how long the covid variant's going to last or change you kind of at some point need to just focus on the business and plow forward and do what's best for the business. so i think all these businesses have long-term sustainable models that are very forward-thinking and will be there for the long term. so we're thinking big picture long term as are i think all of those other companies. >> yeah. two, had thirds of ipos that went public this year are trading below their ipo price. and i wonder how you guys are seeing that. was it too much supply or something broader in the market, for instance, the changing liquidity or inflation in the fed? >> i think a lot of momentum often in the stocks when they first came out, a lot of excitement and exuberance and still a lot of new people kind of playing into the market creating more volatility where they're trying to figure out the right way to interpret some of these newer players. again, analysts trying to get the right models and the metrics

out. meanwhile you have consumer behavior that's changing at a faster rate possibly than ever before and whether that's because of the covid variant driving more people onto online shopping and having them change the way and the amount and where they shop and where they spend, whether it's components like web 3 and the metaverse and having some kind of additional share of wallet being taken there-whether it's supply chain issues there are a ton of variables that i think everyone's just getting excited about at one moment and then scared about the next moment and trying to find the right happy place for them all to settle in and obviously with newer players, there's a lot more volatility >> i believe you are bullish on this idea of the consumer and retail in the metaverse. nike's dipping their toe in. i'm not sure if we've seen a lot of other examples. what do you think -- who do you think are some early winners here that we should keep an eye on >> i'm really bullish on the metaverse web 3 and what has in

store for luxury brands. but i'd say just brands generally. so you have seen many brands, whether it's gucci, burberry, nike, taco bell, charmin, exploring the metaverse and how their products might have a digital impact there is a business that i do some work with called dress x, another one called bos that focuses on how do you bring fashion into this digital world. and i think at the end of the day it's just another tool to enable experiential commerce this idea that consumers want to immerse themselves more holistically with brands that they buy from. so a brand is no longer just a way to transact and get the product you need it is a statement about who you are, the values that you believe in and that you hold deer, it is then shared on social media as a way for you to kind of push that out to the world, people you know, people you don't know. so i think we now have this digital tool of the metaverse to let you explore this even

further and to kind of have that deeper interaction and often level of ownership with many of these brands >> where do nfts fit in? because we've also seen a lot of luxury brands experiment there >> nfts are a way that consumers can feel a sense of ownership and connectivity to various assets, which at the end of the day is really powerful because when you buy designer product, you know, we're used to buying let's say a physical handbag, that's a statement about who you are, it's a statement about a product you are able to afford and some sort of stature, some sense of style, perhaps. so now you have the ability with a broader set of assets to connect to those products as a consumer, but, in many instances, also to feel a fractional sense of that ownership of that initial digital item that you are then able to let other people kind of fractionally have ownership pieces of. so i think it's just giving us a lot more flexibility of shared

ownership models, ways to engage with these products in the digital world. brands i think are more important than ever. if i look at the nfts out there in opensea, most of them are right now of celebrities or logos of famous brands i think people are still trying to get their hands around how to convey and bestow value in this metaverse, in this digital world. and so the easiest, quickest way for that to start is often with brands that we know and trust, celebrities as a form of a brand and these kind of icons that we can connect to and relate to that's i think where we'll see a lot of the initial momentum into the metaverse in what's already started. >> i think we will be having you back on in 2022 to talk a lot more about all of this thank you. happy new year >> thank you you too. >> jenny fleiss. up next, mike santoli back to break down the charts with a look at what he is calling the most important stock in the market and later, defining esg. the appetite for climate change

and social justice, certainly strong in 2021 but a standardized rating system for companies' esg policies is a major missing piece for investors. we'll have the story when we come back.

stocks closing at another record high, number 70 for 2021. let's send it back over to mike santoli for a closer look at the stock he says is the most

important to the market. and, mike, close followers of yours like me know exactly what this is. >> that's right. microsoft, i've kind of been thinking this for several years now. and it's not just because it's so big and this year kicked in something like four percentage points of s&p 500 performance. but because it encapsulates a lot of what investors seem to really value there's the buyback, there's the steadiness, this idea of a platform company it's not really just about hit products and things like that. so it's somewhat of a defensive as well as a growth tail look at what the stock has done since satya nadella was named ceo. it's got this great huge addressable market, adobe, very predictable and also traded at a huge premium well, microsoft is now ten times the market cap of adobe and has essentially caught up to it in terms of performance it's also caught up in

valuation. i look at free cash flow yield as one way to say what the market is really placing on each dollar of cash that comes in the door and as the free cash flow goes down, it means they're paying more for each dollar you've seen microsoft on a forward-free cash flow basis a little pricier than adobe even maybe that means we're getting to that price perfection type of level for microsoft. i do think it's quite interesting, it's something of that scale getting that kind of premium back guys >> i do think there is this question about next year, if people think it's going to be defined by the federal reserve shifting this policy, raising interest rates, taking away liquidity, trying to normalize and fight inflation. what happens to a microsoft or a facebook or an amazon? because if they continue to work as defensive plays on a slowdown, then the indexes will work but often we do see tech getting hit when we hear about higher rates. >> yeah.

i mean, i think the playbook is not that clear in terms of what should happen in terms of sector leadership what we do know is the first rate hike is almost never, really never been the thing that truly kills a bull market. yes, sometimes it does coincide with some sort of a correction with high valuation stocks kind of coming in for some comeupance but we saw that this year, this saw a mini 2000 meltdown microsoft, apple, they occupy this different realm where it's all actually about this idea that you have secure long-term profit streams as opposed to hopes and dreams so i do think it's a real big question how the fed filters into that. i think if credit markets stay relatively sturdy, it's hard to see too much of an undercutting of valuation and, by the way, we all can say it's about the fed next year and maybe it isn't all about the fed because maybe something comes at us left field. >> very interesting to see,

mike again, incredible reminder there of satya nadella's performance and tenure at microsoft. up next, the big esg debate, hundreds of billions of dollars have been invested into esg funds globally but it turns out there are some major flaws in how progress is actually being msud.eare we'll explain when "closing bell" comes back

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at helpfosterchildren.com billions of dollars have poured into esg fund this is year but investors still lacking a accurate way to measure overall impact kristina partsinevelos here with the story for us >> hi, wolf. so when we think of esg, we think of impact on environment but they measure the risk the word poses to the company and its bottom line. so rating agencies and providers need to dig through hundreds of variables like accounting practices to electronic waste, they have to crunch these numbers and come up with a single esg score metrics vary across the board. take for example ibm it gets a 15 out of 100 from s&p 500. or s&p global i should say and a 73 out of 100 from

refidive and philip morris gets an arth score on the left-hand side of the screen as well as a high score of 84 out of 100 so the esg data is so noisy that some choose to ignore it completely altogether. norway sovereign wealth fund, the world's largest believes esg ratings rarely help and instead they use their own tools for picking climate friendly investments. demonstrating the disconnect between esg ratings and environmental impacts. sara >> kind of confusing christina, thank you up next, omicron surging across the u.s. and the big question is when cases could peak. what dr. fauci told us earlier when "closing bell" comes back you want your data to be protected and secured. and your customers want seamless and easy. with ibm, you can do both. your company can monitor threats across your clouds,

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we are not contemplating a lockdown and i think when you look at countries that so-called lockdown, they are not really complete i don't know of any country right now that that are completely locked down. they're making restrictions greater, but not completely locking down >> not contemplating a lockdown. that was dr. fauci earlier on

the show when we asked him about when he expects the current omicron wave to peak here in the u.s., here is what he said. >> it certainly peaked quickly in south africa. it went up almost vertically and turned around very quickly i would imagine given the size of our country and the diversity of vaccination versus nonvaccination, that it likely will be more than a couple of weeks, probably by the end of january i would think. >> first time i've heard him put that date out there, the end of january for a peak which is important. and i'm not sure the fact that they're not contemplating lockdowns is that important because stuff is already happening. cincinnati, my home town just declared a state of emergency amid staffing shortages at the fire department and in new york city where city m.d. locations, where new yorkers get tested are having to close because of short staff because everyone is so sick and mike, the market is looking

past it and encouraged by the fact that the disease is less severe but clearly this is going to have an economic impact. >> yeah, looking past it but i do think making some allowances for the possibility that the economy gets off on a little bit of a soft footing in the start of the year. we not only have the impromptu haphazard curtailed activity and then the child tax credit rolling off later in january so to me it is a more of a moderating factor on the view if you thought over heating was issue number one, that takes a little bit of that concern away. and maybe explains something of the kind of slightly defensive posture that the market is tak taking here, at the 70th new high of the year, more than one every four trading days. >> and less of an economic impact given that they shorten the quarentine time from ten days to five days should make probably quite a big difference

as many people could work from home but don't miss tonight, a cnbc special, crypto night in america. melissa lee is taking stock of cryptocurrencies in 2021 and looking ahead to where they could go in 2022 that is tonight at 6:00 p.m. eastern time the evening shows just get better and better. i started them melissa picked it up and seraphinished them we're out of time on "closing bell." "fast money" is next. >> tonight on "fast," biogen and what it means for investors and who could be next. and plus going bargain hunting five stocks down double-digits, will they be the comeback kids of 2022 and find out on trade it or fade it and out with the new and in with the old. best bets in fin tech. welcome to "fast money," i'm melissa lee. tonight'