it all possible. >> indeed, i say that to all the -- i still have another show to come. steve, it's been a pleasure. i can't quite say you're my favorite, because sara is probably watching, but you're right up there fractionally behind happy new year to all squawk virus. stay tuned cnbc continues throughout the day. good friday morning, women to "squawk on the street." i'm here with leslie picker er d mike santoli there you go we're down on the dow, down on the s&p, marginally higher on the nats gab our road map this morning starts with the bull market of 2021,

the s&p 500 on pace for its third straight year of gains with the energy sector leading the way. >> plus it's been a wild ride for ev names rivian and lucid motors joining the crowded field. and warren buffett refusing senator bernie sanders's request to enter -- intervene at a strike at a berkshire-owned company. >> we do begin with the markets, of course. what a year it's been. s&p for the year, up 27.2%, that is the best year for the s&p broad stocks since 2019. >> remarkable. i don't think a lot of people ants pailed quite this much up side at the index level. just a few observations of kind of the path along the way is, you know, it wasn't's easy as it seemed arguably, not to say you didn't have pullbacks.

you had multiple kind of boom/bust, you know, cycles within this market i not visible on the s&p chart it was the first quarter l.a. years, all about ipos, spacs, ark, speculative growth, and the open trade pretty much peaked in march of last year, airlines certainly did. yet looping the way there was enough rotation and the market kind of healed itself. because youdidn't have any rea macro shocks, even with the inflation running where this did. it didn't tighten financial conditions enough to crimp the market, maintaining its multiple on record earnings, basically. >> i'm curious, given this is also the last trading day of the month, i think people were expecting more of a rally for

december it's been a mixed picture. of course the santa claus rally still in effect, looking to notch some gains during that time period. there's still today and two more days in 2022 as well are you surprised by the picture in december in particular? >> i'm not sure i'm too surprised, given the crosscurrents we were seeing with if you look back at the that is right for the quarter or the year the s&p 500 hits like 4700 in the beginning of november. you have a great jobs report yeah we're concerned about inflation, but we think it's because of the economies in boom times. then you've got, you no, a bit of back and fill bought the market was alternates stretched, and then the omicron case. the navigation there was a shake out of those names you would

have been holding to play that boom, which seems to be deferred, if not at least diminished ultimately. i think that's what interrupted the typical november/december cadence. at the same time, you know, those speculative glamour stocks, they just essentially had to give up trade, so a lot of the liquidation in smaller stocks, and in some of the real story names that we've been talking about so much, that's to me what was the undertowin the market that the index has been fighting against i think it's fairly respectable point to point you never got a big shut down. maybe 4800 on the s&p, it seems like it won't be the eatiest thing to slice through, but, you know, i think it's hard to really complain if you're a bull about exactly how things have gone, even if it sets up a

slight huddle in to 22. >> it's kind of funny, the word of '21 can be summed up with liquidity. i do feel as though sometimes we made it more difficult for ourselves, overthought the process, rather than just focus on the overriding theme of that, how much liquidity was in the system, and not just focusing on the old saying, dance with who brung you. i remember in the financial crisis, after the fed came to the rescues, tiffs david tepper on our abe, who said with all of this liquidity everything is going to go up it really wasn't more difficult than that, it was a way to distill everything down to that particular fact. yes, we had volatility throughout the year. there were peaks, valleys, things like that, of course, but at the end of the day liquidity ruled the day. that's why we find ourselves talking about one of the best years we've had in a while no big shock

why? because of liquidity the only reason we're thinking the calculus could shank perhaps next year as we're coming out of covid is some of that liquidity, leslie, is being pulled away. >> that's absolutely correct it has a lot of investors wondering how to position them themselves now surpassing $4 thrill onfor the first time ever. you look at that under the back drop of massive -- it's the paring back of liquidity, the hoping that active management can get around that as we see the new regime also rising interest rates, the fed tapering, all of that plays a role active managers are hoping that, if you invest with us, we can help protects your down side,

whether it's stock selection or bond selection or other assets, to help you maximize the up side as well, mike. >> i think that's the annual sales pitch. perennially that's what you sell if that's what you have to offer. it is more plausible to say, look, it's the time in tradeoffs, and not just all boats rising i do sometimes like to scrutinize the concept of liquidity. to me, it's not a quantity of a substance like money or fed help it's a promise believed. it's the confidence that you have that assets are priced roughly as they should be, that somebody's going to be on the other side of the trade, that people are willing and, you know, rational holders of riskier assets, and they're going to be there. in theory we're at a point in the cycle where the fed can say the real economy can kind of

take over at some point here, and, yes, the big risk is that the fed feels like they have to do too much to fight inflation before the real economy is ready for it yeah, that's the balance that we're trying to strike here this year >> there were -- i wonder, too, there have been certain smaller shocks that took place under the surface with gamestop, for example, and these black trades. i kind of wonder, will we see more of that next year, especially as things become more pronounced in a back drop where there isn't as much support from the fed, perhaps

i think that's another question. >> maybe one of the other critical stories of the year, leslie, as we're talking about meme stocks, some of the other phenomenon we witnessed this year is the incredible ability of the market to self-correct. maybe that's why i didn't have a larger that is 5% pullback at any time throughout the year, even as you came up upon calls, we're due for a bigger correction the market corrected itself, unlike in prior cycles when we got bubblicious and overheated, whether it was the spac market, nfts, any other area where there was perceived excess in the market, it corrected itself. i think that helped the overall environment from becoming, you know, a large you cave-in in terms instances. no doubt about it.

nominal gdp growth, and corporate growth is going to create a cushion that's partially what happens and it map became more rotation. as opposed to immediately going to the sidelines or going into something safer. so i think that's been exactly the dynamic here there's a certain degree of luck in there we could have deepened into a so% correction with a couple things going differently that probably will happen before too long it's rare to have two straight years without one. >> i'm thinking of things like the ark stocks, right? those kinds of stocks corrected tremendously many of those are off sometimes 70% from their highs s why

didn't a pullback in the market become deeper than that? the megacaps never really turned over there's this whole generation of investors and traders who have been following this mantra of buying the dip so, you know, it will be interests to see in that continues. >> meantime, airlines canceled more than 1300 flights due in part to staffing changes

yesterday on "closing bell." >> it's definitely going to help a lot of our crew members, once they've had covid, they don't want to come back but the size of the problem is just the number contracting it. 75%, northeast, and in some areas, some departments, we're seeing between 200% to 300% increases in people calling out than what we expect. it's a very big number. >> so it's interesting seasonally it's already a different period for airlines. you talked about just the fact that a lot of -- they'll get sick anyway, and then, of

course, you people taking time off for the holidays as well but, scott, you have to wonder what it means for rental car companies. am track is having issues. no one is taking a cruise ship so are people going to rent a car if they want to get where they need to be, if it means, say, driving nine hours, which, for even mid westerners is not that bad. >> thinking about the different levels of hospitality, by the way, 580,000-plus new covid cases. it smashes the record. yesterday we were astounded you go 488,000, and you go, unbelievable numbers now, clearly hospitalizations, deaths, they're not spiking to nearly where they were in prior cycles of covid. that's one of the reasons why the market has been able to hold up, but we can show the cruise lines, as the cdc now says don't take a cruise right now, no matter what your vaccinate

status is. of course, the cruise association was out fighting that a little bit. but they're not down tremendously one of key questions going into 2022 is what did you do with those types of stocks, the airlines, the cruises, the residential cars, as les said, hotels, any level of hospitality. >> i think probably for now it continuings to be very tactical. there's another reopening dynamic that's not too far away. another aspect is how compressed and concentrated this wave is. so if you haven't seen the hospitalizations, i think wall street is pretty confident this is a sped-up experiment and, you know, hoping for a good deal outcome in several weeks, perhaps. >> no doubt about that we're wrapping a year in which tesla joins the trillion dollar club

we're going to look at what to the expect in 2022, and this year's best performers on the s&p 500 led by devon energy t more "ua othstetissqwkn e re" straight ahead competition beat us again. how? they have a better finance system than we do. i feel like they might have a better finance system than we do. workday. how do they make better decisions faster? workday. it's got to be something workday. i think i got something. work...

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expect going into 2022 joining us is colin rush good to talk with you about that we've added so much market cap in this area of the market tesla is up a few hundred billion, rivian, lucid together, i don't know what percentage of ford more than doubling is about evs. is that, do you think, the market catching on to the current size of the opportunity? have we kind of overshot in terms of how quickly this transition is going to happen? >> yeah, i think we want to look at a couple things this trend goes back to third quarter of 2019 when tess lay finally broke through in a real way, and we've seen market cap growth from there. what's happening now is we're looking at the transformation, the market cap is reflecting the opportunity size we're really looking at this as

an excuse mere tesla has gone through some challenges in a public view in the last number of years i think we're going to find out who can do that in 2022. >> obviously tesla has shown they can operate profitably at these volumes. it seems as if right now production, the cadence of production, it seems baked in in terms of investor expectations this year. now near does it have to come to reality? >> i think it's about keeping the vision alive, executing

along the way. with the data we have vinyl, we're looking at deliveries. the consensus is 265,000 deliveries in the fourth quarter. and then incredibleal future it's a full trillion dollar year opportunity. and then, of course, the up side to shares. at the end of the day it's super, super hard. and they're also trying to balance and how big it is at this point i wonner if we talked about at

one point the only game in town, and now the biggest -- whether it's bmw, ford, gm, rivian, et cetera, et cetera, et cetera is this a year where that finally matters to tesla >> i think it's an important point. we think there will be a lot of cars on the road i think, you know, having more conversation in the space, you know, benefits the supply chain, it benefits consumers ease comfort level, and then can day and contrast we think tesla shakes out well i think the real key is to continue to strike costs down, efficiencies, and tesla has signaled where they're headed on that the batly evolution, and scaling up production. as we go think 2022, that's -- raektly you'll see it impact

some of the other companies ramping up this year, and you'll see what the vehicles look like, and i think tesla shakes out well. >> you're giving under the circumstances a great primer on tesla, but i want to ask about the technicals this level of can magnify, and detesla higher i'm curious if you think that will continue in the new year. >> absolutely. there's so much volatility there's still a lot to get figured out. we've got advocating looking at strong management teams and strong platforms and strong capitalization there's a lot of, you know, i guess i would call it the wild

west you know, you want to see that options activity i don't think that changes here. >> hey, thanks a lot, and happy new year appreciate it. >> happy new year. a programming note for tonight. don't miss our special "your money 2022" hosted by sara eisen. that's at 6:00 p.m. eastern time another look at the biggest gainers for 2021, moderna and nvidia battling for the top spot you can see big returns more than doubling. "squawk on the street" will be right back love my gold jacket, but that aflac blue feels so right. when you feel right, you coach right. i know that's right! prime never believed in double coverage, but health insurance and aflac...is money. ♪ must be the money ♪ and i know how coach prime feels about money. -aflaaaac. -♪ aaahhhh ♪

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>> announcer: the opening bell is brought to you by -- opening bell is going to ring in about a minute or so among the suspenseful things to watch today, passed on infrastructure or markets desk, and the great robert -- keep an eye on the nasdaq. a decline would be the fourth in a row, the longest daily losing streak to end september. tech remains a question into 2022. >> it's actually a question, so much focus on, you know, sort of the perceived concentration of the really all year. so the nasdaq is up, especially the nasdaq 100 really is a handful of stocks. other on the other hand, you

know, a lot of folks thought it would be the value years growth has actually outperformed, only in the last few months, but it's that balance and that self-healing of the market that you were talking about earlier >> yeah, you're hearing the opening bell, taking a look at the real-time exchange down at the big more house of healers connecticut, and over at the nasdaq -- leslie, one of the big questions, if you talk about laggards, and we're looking at the dow, and disney, the worth performers out of the dow, and a new chairman, susan arnold succeeds bob iger. vip surprising laggard they faced a confluence of

factors related to the pandemic, but, of course, streaming has been a huge tailwind for them. we'll see what happens there i just wanted to point out some m&a figures for the year we saw volumes hit a record high in 2021, reach $5 trillion for the first time you think about the impacts of spacs, the impact of private equity, the impact of strategics, having so much cash on happened and not too much to do with it of course, their stock price is higher, as the market, you know, we've told you the statistics earlier, just have been on a tear this year, how that played a role in m&a. some headlines this morning on that front hunter douglas selling a majority stake to 3g capital those shares surging on that news, but on the flip i'd, amd and xilinx announcing they're

delaying the takeover deal to the first quarter of 2022 from a prior yearend target, cease they don't have the necessary approvals at this time i'm hearing there's a lot percolating behind the scenes, and we should see this continue, but so far there's nod end in sight. the spacs seeings deals, i think the number is 570 spacs seeking takeover deals a mike >> leslie, i would argue that -- actually underperformed in m&a this year, relative to the size of the stock market, relative to how generous the credit markets are, how high the existing share prices is, and essentially the abilities of these companies to

try to do these strategic moves. we did 3.5 thrill on15 years ago when the overall equity market value was one third of it, and it didn't seem like there was a lack of megadeals we're natural world of $2 trillion market cap companies, the biggest, most covered deal of the year is $30 billion. maybe that says something about this winner take most type of economy that we have, or maybe there's a regulatory chill out there. >> i think it's regulatory chill. i think there's a lot of uncertainly with regard to the pandemic and how it will impact businesses i personally expected more this year, given the holdover from 2020 where corporate boards were like heads down, let me figure out my business before i can engage in any business discussions.

i remember a 66 bill yor deal, and i said to my editor, do i have to cover there? , when you think back, i think broadly speak, we do have a large total, and just the relations on that front, scott. >> i did want to call your attention to shares of peloton and talk about it for just a minute it did get downgraded this morning, as if it needed any other bit of tough news to digest at such a tough year. it does get downyayed. jmp securities goes to market performy outperform. they cite declining website visits and page views. there's the stock, down 75%, and it's been, mike, a pretty brutal year for so-called stay-at-home

names. zoom is down 44%, docusign is down 30%, chegg down, and just a real critical question coming into 2022 is what happens to stocks like this in the new year there will be a lot of focus on names like peloton it remains a favorite name in some quarters, but talk about crashing the bike. [ laughter ] >> a two-year chart of peloton tells an amazing story you're back down to levels first reached in early february of 2020, so a massive pandemic surge, and then all these stocks are suffering right now for the overshoots that an excitable investor base took them to in the early days of the robinhood mania, and where momentum was all you needed

people were willing to extrapolate what the pandemic would mean when it comes to peloton, clearly the assessment now is these raced to a pretty high percentage in a hurry. now there's a hangover effect. it's also hardware it's a tougher business arguably, at least at this phase, whether it's docusign, which have more of a virtual life to them i do think it's a good question, though, how some of the big losers are the last 8, 10, 12 months will fare, at least in the short term usually it's a scoupe up the wreckage type of trade, and sometimes the laggards end of having some pretty violent bounces. >> that's a really good point. i want to also ask you about what's going on in energy. it's almost surprising, as you reflect back on the year to see that that's the best performs

sector, especially given all the conversation we had. so many large funds have been screening out energy altogether. i think that's why you've seen active management underperform this year. it's been great for the energy companies, great for the sectors. mike, were you surprised to see this year turn out this way for energy >> i think the magnitude of the gains,yes. it's pretty much mirroring what's going on in the underlying commodities that's a good story about the global recovery, to some degree, but like a lot of those, again, the reopening, or the global reaction sell race type of sectors, whether it's retail, energy, all of them, most of the gains were in the first part of the year they have held on to them. a lot of these charges look

similar recently they've had these nice bounces, but still to a lower high. they're not looking like they're challenging the former highs right now. and what's going to happen with raids that seems to be a damp in, so i think that's, you know, holding you back in the short term. >> we mentioned it earlier, but devon and marathon this year, no surprise when i tell you they'r

signaling they're going to report a fourth consecutive quarterly profit as well so there does remain a fair amount of optimism you were right in the center of this conversation, the interesting year it's been for exxon mobil. esg at the forefront, a few board members of the boy, how things changed this year >> you have to wonder because of the crux of that activist fight. welt, they certainly have bene benefited, just as overall investor the

does that dissipate the argument, when they have seen so much in the way of profitability relative to their greener businesses as you see the cost of capital for these projects go lower, mike management seems to have completely reoriented. the company can benefit, i guess, from what's going on in the traditional energy markets along the way. the absolute bullish upside case a lot of folks will talk about when it comes to an exxon, look at the stocks of ultimate tryia and other tobacco stocks the year after the settlements,

where everyone knew they would have to wean off the traditional modes of selling these things. they were hemmed in on the regulatory side. maybe they thought they had to go toward noncombustible, but there was no hurry maybe there could be a cash cow. it's not a perfect analogy, but i do think some people are wondering if the old energy companies can kind of get some of that strategy in place. >> that's kind of the situation that's taking place at shell right now, where you have dan loeb, essentially separating their cash cow from the newer businesses, which require more investment shell has pushed back on that. is it really it is sum of the parts bigger than the whole when you look at this transition. i think what we have seen this

year with regard to the underlying dynamics for traditional oil and gas businesses would suggest that, really it's okay to say together every companies is different >> let's get to bob pisani happy new year, bob. what do you see on this final trading day of the year that's of interest to you it's not a big point move, but 3 to 2 advance to declining stocks we have a shot at a new high most of the major indices are all out up side. remember, this week has been defense tariff dominated, health care, utilities, reits have been doing west consumer staples, industrials, i watched that middle sector,

they're holding up very well that's why we're getting this market staying at a new high let me look ahead and give you two narratives is the bearish narrative that's out there is we're going to have continues problems with covid variants throughout the year. this is going to create more supply chain and inflation problems the fed is going to have to raise more aggressively than people thought to deal with the inflation issue, and the consumer pulls back. i have to tell you, it's not the dominant one at all. the major concern is actually not that the pandemic will continue and we'll have more lockdowns. actually, the major narrative for the market is exactly the opposite you could call it bullish, but there's a warning on it. the bullish way of looking at things is the pandemic becomes manageable that the consumer stays strong, that inflation subsides, because

the pandemic becoming more manageable, and the fed continues on its program of very slow interest rates, and that the earnings are better than expected the bulls are talking 15% to 20% growth in earnings the major problem becomes what is the impact of the stimulus withdrawal that's what we don't have a model for. we have never seen 12 or 13 years where the federal reserve has been this involved in pumping money into the system. on top of that, we have, of course, fiscal stimulus, on top of monetary stimulus there's a lot of people arguing it's time for a mean reversion here look at these numbers beer up 11 of the last 13 years. that's an extraordinary run. the average yearly gain in those 13 years is about 15%.

i'm rounding off here. the historic average return, going back into the 20s is about a 10% return per year. we've had an extraordinarily unusual period of market-beating returns. a lot of people believe the liquidity that's being pumped in is a part of this. nobody believes it's not an issue. so if you believe that somehow has helped pump up the stock market, what isle withdrawal of liquidity, the implication is some kind of negative effect we don't know how to model that very well. here's a brief excerpt of ar cashin's poem. have faith this new year will bring a new sign believe in yourself, it will all

work out fine. just lift up your spirits and some fruit of the vine, and kid you a loved one and sing "auld lang syne. look forwarded to singing bobby vance with you in 2022 have a happy and safe new year. >> thank you for that little dose of optimism today as we head to break, it's time for the final bod report for 2021 seattling around -- to close the year however, making a big jump since the beginning of the year. we'll finish with the dollar index, we'll be right back (swords clashing)

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no reason that steel workers at special metals, a southwest virginia company that made 1.3 billion in profits should accept an insulting contract that has major cuts to the health care. leslie, i guess there's no more low-hanging fruit for bernie sanders than a super rich guy and a labor dispute. >> yeah. i mean, interestingly buffett has been, you know, not targeted by bernie sanders thus far as others such as bezos and elon musk has been, but warren buffett does have the policy and he really sticks to it of letting the companies individually deal with these types of issues on their own he doesn't like to get involved. it's not his first time he's really come across a union dispute in one of his companies.

back in 2015, his subsidiary berkshire subsidiary netjets had about 2,700 pilots picketing outside of berkshire hathaway's annual meeting at the time arguing about various issues it's not something he's familiar with he doesn't encounter this on a daily basis, but it's something that he's basically taking more of a hands off approach with, mike. >> yeah. there's no doubt about it. he can lean back on this, you know, decades long policy of giving autonomy to these companies. precision cast parts is the overall company that he bought, that this is a subsidiary of he's been on the record of saying he overpaid for that company, but, you know, you're absolutely right i mean, it would be tough to unspool labor issues across his entire business, although one reason senator sanders probably did target him is buffett does have a kind of a political stance that is more amenable to, you know, workers getting paid

more and things like that. of course, he's planning to give all of his money away eventually meantime, let's check out the dow's biggest gainers of the year home depot and microsoft topping that list. microsoft up more than 50% over $2.5 trillion in market cap. a reminder, you can get in on the new investing club with jim cramer and sign up and find out more at cnbc.com/investing club or point your phone at the qr code on your screen and it will take you right there we'll be right back. together, we can create a kinder, more inclusive world for the millions of people on the autism spectrum. go to autismspeaks.org.

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available now for comcast business internet customers with no line-activation fees or term contract required. see if you can save by switching today. comcast business. powering possibilities. despite the pandemic, the resilient consumer has given retailers a lift this year courtney reagan has a look at what to expect from the group in 2022 more of the same >> yeah. i think so, and that could be a good thing, because in a world that is still in a pandemic with new variants emerging, it's pretty amazing to see how resilient the u.s. consumer has been and is expected to remain job opportunities are ample in the united states. wages are finally rising, home values are appreciating. it's a set-up for consumers to have discretionary income to spend even in the face of the rising inflation it's 42% compared to the 28 %

rebound and many analysts have bullish outlooks for the new year, even if the economic outlook is expected to slow down from the rates we have seen. for all of the negative headlines, many tenants had banner years the dying department stores didn't play out for the biggest department store by revenue. shares of macy's grew 147% this year and it's a top pick for 2022, and dillards gained nearly 300% shares of nordstrom ended down 26% for that name. bath & body works gained 132% for the year and it lands on jpmorgan and chelsea adviser groups top picks for 2022.

and the hypergrowth e-commerce players fell well short of the hype and the potential, even the biggest e com play of them all amazon only grew 3.5 this year and resale may be hot for millennials and gen z as a trend, but investors are not happy about the profit and all three of the names shed ben 53% and 66% of their value in 2021. scott? >> all right, kort, thank you. look at shares of apple on the final trading day of 2021. are we going to get to $3 trillion in market cap today? we have a lot of work to do. 182286 that's the key number to get to the milestone big year for apple, so keep an eye on those shares today. the interactive brers aianokchrm

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welcome to another hour of "squawk on the street. karl david and morgan have the morning off and take a look at the markets here on the final trading day of the year. in you go. the dow is down fractionally, actually we're down fractionally across the board still trying to get revved up here on the last trading day, leslie. >> we're 30 minutes into the trading session. here are three big movers. it's the worst performing stock on the nasdaq 100 this year, peloton and jmp is done grading it to market perform citing a decline in webpage visits. the shares are down less than 1% now. apple staying on top in the chinese phone market the company saying it had more than 23% of market share in november shares are up more than 34% in '21, down fractionally today ending on blinds maker, buying a

majority stake in the company and roughly $7.1 billion, and those shares run 7 -- are up 70% in amsterdam. the s&p on pace for the best year since 2018. and there's a tough take from many growth names. joining us head of portfolio strategy and portfolio manager vance howard gentlemen, good to have you both with us. ben, just as somebody who kind of surveys the world and across asset classes to try to put capital at risk and at work, what strikes you about this moment going into next year when you have had risk assets do so well, you had the u.s. outperform by so much and arguably perhaps, bonds have done better than expected. so where -- which way are you leaning as we head into 2022 >> yeah, i mean, it's been a strong end to the year both in

terms of the economy and the markets, but the key thing is that really the party's not over at the stroke of midnight tonight. and, in fact, the party from a u.s. perspective is in full swing and the punch bowl has been refilled several times already. and so from the u.s. perspective, and asset allocation, the overweight s&p is not that difficult to call. the overarching macro narrative is a mid cycle economy, outside of supply constraints pushing inflation up, there are no major imbalances to be had you have this major earnings gdp momentum cycle that's still going on today it will probably be going on until 2023 and so it's still a straight forward call where it gets dicey and in fact the wild card is probably emerging markets because of the restrictive policy in china and in places like brazil, much more difficult to getting the inflation under

control. so for 2021 as a whole, emerging market assets have been a value trap in other words, they're cheap, but they're cheap for a reason and what we're looking for in 2022 is opportunities for that macro to enter those positions when the macro scenario ends up turning. so overall, we need to raise -- still comfortable with the overweight equities and we like the u.s. and we're looking for the right time and we're focused on what is the right time to jump into the emerging markets. >> i mean, certainly good reminder that trends do tend to persist and don't obey turns in the calendar vance, you're somebody i know you have a model for investing in the stock market that essentially tries to stay with the trend and looks for clues as to whether the market is on firm footing or not what is your strategy telling you at this point in terms of being long or not the u.s. market >> well, good morning to you, mike, how are you? well, the trend's still up

our indicator is very, very positive it's been positive since april of '22 you have a thousand reasons it will go up our down, but the trend is up, any pullback you should be buying on that's what we have been doing for the past 24 months and is working out for us don't fight the trend. don't make it harder than it needs to be. we came up with a thousand reasons that it's going up or down trade it long, 100% long. >> ben, what's your expectation for emerging markets in 2022 we're looking at how the balance sheets of em look a lot better than they did in 2013 given the taper tantrum. is that a place to be in terms of the monetary policy right now? >> yeah, that's a really good point on policy, and i think as asset allocators one of the things -- one of the areas we can truly add value is thinking about getting the timing right on emerging markets. i would say that's a much bigger call to make in '22 than say

something more marginal like europe versus the u.s. emerging markets have a few things going for it. one is that as you expected, policy has been on the front foot in terms of the global inflation spike. just that emerging markets, inflation tends to be more persistent and more difficult to get under control. times the policy when the inflation tops out that's crucial for getting the em call right. and so i think we're cautiously optimistic by tend of '22 we'll be looking at a situation where we return to a bit of a barbell approach between the u.s. and em that's a position that we expect to be very state dependent and we're looking at what is inflation doing, what is monetary policy doing in response to that, and what are the underlying growth dynamics how costly is it to get inflation under control? >> i hear you loud and clear, to stick with the trend

but you still expect three rate hikes in 2022. does that wreck the trend? if that's not it, what does? >> it doesn't matter you have to trade the market we have, not the one we wish we had. so we have to trade through it we are active managers that means we actually manage so we'll deal when that happens i expect we'll have a garden variety, 10 to 12% correction in 2022 we see that coming i don't think anybody should be shocked by that after two great years that we have had in the stock market so you trade through it, you learn from it. you buy on the opportunities that it creates and it will create opportunities we're not long bonds here. i think the bonds, you have to be very, very nimble to make money in the bond market and volatility is not always a bad thing. >> for sure, yep we can all kind of predict the 10 to 12% pullback

thanks for being here. >> same to you, mike. >> happy new year. let's turn our focus to one sector that's outperformed the broader market and that's semiconductors, but will the rally continue in 2022 joining us to discuss is matt bryson happy new year to. will that trend continue >> so yes, i think certainly it's from a demand that we saw in 2021 where there was an extremely strong semiconductor business driving a lot of what occurred in the market i certainly see that continuing in the coming year, both as people catch up to demand that couldn't be fulfilled and then some of the underlying technology trends like ai that continues to proliferate and needs more semiconductors. >> 75% of those surveyed said

they believe that with in tech, semis will be the outperformer where do you see a lot of the opportunity right now? >> i think a lot of the trends that are driving semi content, they really benefit the broader semiconductor market so there are some areas where you haven't seen as much outperformance certainly nvidia is best positioned in ai and when i think of artificial intelligence, for instance, you need a ton of storage. artificial intelligence based upon these very large datasets and so you look at a company like western digital, that supplies the hard drives and they are relate -- they are needed to store that data, it hasn't seen the same rally that nvidia has i think areas like that, some of the underperformance in 2021 will still benefit from the trends and where we'll see our

performance in 2022. >> matt, does it pay to try and be a kind of value or contrarian player in the semiconductor space with something like an intel at this point or is it just in the -- you know, kind of too difficult category >> so i think it pays to be a contrarian it's just with intel, the difficulty in my mind, some of the things that they are struggling with, so being behind in technology, losing share, seeing some of the major customers like amazon go and develop solutions internally, i don't think those challenges go away in 2022 rather, i think it's a three year, four year process, and to get it off the ground. certainly a longer time frame has been alluded to and in particular in 2022, we're still looking at a lot of the road map created. i think intel is going to continue to struggle with

increased spending and at the same time, they're being -- they're going to lose share. i personally like contrarian names. intel is not one i like right now. >> yeah, matt, you know, you mentioned nvidia as being kind of at the center of the big picture trends and, you know, spilling off the need for storage. what about nvidia as it's valued right now? $750 billion, you can kind of argue, you know, it's well off its record highs but is it all realized in the price already? >> so my view on nvidia, i move to the neutral and my concerns aren't really around the ai space. rather, i don't have a good grass up on what -- grasp on what the demand is going to look like i think that's fuelling some of the demand for their client graphics cards and what we saw two or three years ago is when

the crypto market tumbled, nvidia also struggled with some loss of demand so that plus the valuation, that's what kept me on the sidelines, but you look at the artificial intelligence next year and moving forward, nvidia has established itself as a dominant name and space and i don't see that changing when and if -- i think they will play a major role there and so i think it's a great company. i think there are real significant demand drivers ahead, but i worry about that crypto space. >> we'll see what next year brings thank you. as we head to the quick break here's a look at the road map for the rest of the how were flight cancellations, ships stuck in port, how omicron is impacting travel and those stocks plus, interactive brokers

thomas petterffy on his outlook for the markets in 2022. and then many cities canceling their new year's eve celebrations, but not new york we'll talk to the man in charge of the ball drop "squawk on the street" is just getting started. stay with us

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in the weeks ahead joining us is fred hassan. welcome back and happy new year i can't hear you i'm wondering if we're having a problem with your audio. i'm going to try it again. i'll ask you the first question and see if we go from there. 580 new covid cases yesterday. can i get your broad thoughts on where you think we are in the pandemic >> can you hear me okay? >> i can hear you just fine now, yep. >> okay. perfect. so i think we need to get ready for a million cases a day. i think this thing is a very, very sharp surge, and it's going to have a very sharp peak and then fall off very quickly so if we look at alpha and delta which came earlier there were

waves, six to eight weeks and this is more like a flash flood. about four weeks we're just seeing the way that all the -- all the cases are going up exponentially, but then they're going to come down exponentially so this thing is going to be over by the end of march for sure probably by the end of february. >> i guess that's the reason why the market, fred, which focus so on heavily has been able to look past omicron if you say we'll do a million cases a day, i can only imagine we'd be reacting to that a year ago or further back, and the reason we're not in large regard is because of the vaccines and the incredible science that has created them is the most -- maybe the most important thing of the year, if you want to say -- is it the mrna technology? i mean, that's what your real expertise is, sort of speaking about this incredible innovation that we have witnessed in science and biotech. is that the most important

thing, mrna technology >> yeah, i think that's been the story of the year. so mrna has been known for decades, but we finally made that into a tool that can greatly help us in public health and in many other ways so with mrna, which is a small molecule, it's a small molecule, that's an information molecule, it's just magical. it can tell the cells of the body to make proteins the way you want them to be made so we've got two great covid vaccines and now that we're confident that these things are very good, very effective, they have been on the market for a year, we are now going forward with using the same concept in other infectious diseases such as the flu and especially for the flu, that will be a great breakthrough, because we can get to the problem fast as opposed

to going through the long cycle of cell culture. it's a major advance finally, the big one that we hope will happen and the data in rodents is excellent, it works in many, many cancers. so we can be very specific in going after certain cancers with mrna that was the big story of this year. >> fred, i'm curious what the investment response to be that to because as you mentioned the velocity of innovation in monoclonal infusions, antiviral drugs, all of that seems like it would create this rush of capital. but then on the flip side, you see hedge funds that traverse in biotech have been suffering, because they're not as rewarding or as excited about this velocity and this innovation. >> it's very interesting, it's been paradoxical so on one hand, the innovation flow is astounding, it is very, very good. and the capital flow into the markets has been astounding.

in fact, the market is swimming in cash in terms of capital coming in there. what's surprising is that the index, the biotech index, has come off 30% since the peak in mid february, and the reason i personally think is that they're just too much -- too many ipos competing for cash just a lot of cash out there with some imbalances, not enough people to do all of the research that cash is going after and maybe the stock moved up a lot in the prior year. and there's some readjustment. but one should expect that these indices around health care, pharma industries, they should remain pretty strong as we go forward because the science is now unfolding beautifully. >> fred, you know, there's also been quite a divergence, even within the large pharma companies -- i mean, pfizer and

lilly, great performers this year is it as simple as who's got the pole position on the pandemic-related solutions or is there something else going on there? >> i think it's a little more systemic so i think pfizer was a little bit more of a financial engineering story for a long time and now it's become a serious pharmaceutical company with a very good head of r&d who i'm very proud to say used to be in one of my prior companies and they seem to be coming out -- coming out with one product after another. either first to market, second to market. it's again like back to '91, '92, '93, '94 when they came out with great drugs like viagra, and all kinds of great drugs and pfizer got it all back finally you hear very little about financial engineering.

it's more about product flow of innovative drugs so here, they have come up with a vaccine that's fantastic it's doing a great job around the world. and now they have come up with an antiviral drug which is going to take care of not only the alpha variant and the delta variant, but also the omicron variant. and the problem is that only 180,000 courses are available and we need lots of that drug now to deal with that surge. >> fred, appreciate it see you in 2022. >> happy new year. all right, coming up, bitcoin trying to break a three-day losing streak to end the year many calling for $100,000 for bitcoin as we head into 2022 right now, price is about half atsqwkn e mo "ua othstreet" is up next.

welcome back to "squawk on the street." bitcoin down about 15% over the last month, but still poised to see gains of more than 65% this year our next guest runs a

$1.5 billion crypto fund with us now, tricapital partner, and jared, thank you being here. i want to start with the venture capitalists who like yourself have invested nearly $30 billion into crypto start-ups this year. that's quadruple the amount from last year. what do you think the big driver is and will that continue into the new year >> i think many investors are just coming around to the fact that crypto truly represents a paradigm shift akin to the internet and web 1.0 and 2.0 so the increased capital attention is just respective of if fact that people realize it matters. >> some critics though would argue what's going on in the crypto ecosystem is reminiscent of the late '90s where you saw capital flows into the companies. do you get that sense, do things

feel frothy right now? >> look, any time there's a massive accrual of value there's going to be some froth not all crypto assets are made equal and as a firm we try to focus on the ones with more long-time value. one of the things that people forget about is these narratives continue to compound over the next 20 years and still compound today. and the top crypto companies and protocols will likely have the same. >> so jared, you just saw not all crypto assets are created equal. which one are you most bullish on then as we head into the new year >> yeah. so look, we're hesitant to say any one specific crypto asset, although from the narrative perspective, we're bullish on all things decentralized finance. we believe that the future of financial institutions are front ends that operate on top of the decentralized block ends and we're long all infrastructure to help make the quote, unquote

metaverse. and a lot of infrastructure is going to need to be built in order to on board the hundreds of millions of users to all of the systems that we expect will come we're incredibly excited about the structured products across multiple different ecosystems, and lastly, we're very excited about all of the development happening across multiple different layer one smart contract solutions besides ethereum we are talking about the terra lunas, the algorithmic stablecoins are another trend in 2022. >> and one thing -- the volatility -- sorry. >> if -- yeah. with volatility, if you were trying to mark to market private companies and start-ups on a day to day basis, if you speak to

any founders that i will say some days it feels euphoric and other days they feel like the sky is going to fall and that's reflected in the price of the earlier crypto projects. my advice to all investors, just zoom out and things get easier when you have longer time horizons. >> jared, what's always been unclear is what the real link is between a lot of the development activity and a lot of the investing in businesses around blockchain and crypto, and what ever corresponding value to the tokens and coins has to be it seems to me, we don't have a control on that experiment we don't have all of the development going on in the absence of massive, very sudden wealth creation from the trading of the coins so in your view, can you detach those things in other words, is the excitement around crypto and block chain just because there's so much kind of house money been piled up in bitcoin and associated cryptos >> the fact that a lot of people

are playing with house money is not to be underestimated however, most companies will integrate the crypto's systems over the next ten years and what that means, the tokens that govern these protocols will likely accrual a lot of value. it's still unclear what the exact framework we should be using. it's not as easy as doing a chemical company, but as the instrument matures, we're working on a lot of ourselves and we know other funds are as well and we're excited to see that maturation and expect the industry to continue to grow over the next 20 years >> yeah, difficult to do a dcf when there are no cash flows jared, thank you for being here and happy new year. >> thanks very much. now let's get a news update with rahel solomon. >> hi, leslie, and good morning. this is what's happening at this hour for the second straight day a new record high for covid infections in the u.s. 640,000 cases were reported on thursday that puts the seven-day total at

almost 2 1/2 million so far hospitalizations are growing at a more modest pace, but health officials are worried they'll be swamped the daily death rate is down slightly over the past two weeks. tens of thousands of people near denver, colorado, have been evacuated from their homes fast-moving wildfires burned almost 600 homes and they have been fueled by strong winds with some gusts topping 100 miles an hour and sydney is 16 hours ahead of new york so it's already 2022 in australia 2 1/2 hours ago, they held the famous fireworks display, but instead of a million spectators at the harbor, crowds were limited to tens of thousands due to covid concerns. scott, of course, we'll see something similar in our times square when the crowds are scaled back. back to you. >> thank you well, if you're not first, you're last and that's how the market feels about silver. this year down about 12% and on pace for the worst year since

2014 gold is in the red as well interactive brokers thomas petterffy is with us after the ea n ms that interview in two minutes. here. aspercreme arthritis. full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme.

let's get a market check now. we're an hour into the trading day and we are red across the board, but it's been a great year for the s&p all poised for double digit gains this year. joining us now is interactive brokers founder and chairman, thomas petterffy welcome back nice to see you and happy new year to you. >> good morning, and happy new year to you too, scott. >> thanks so much. so the question of the moment -- what does 2022 look like after a darn good 2021 for stock investors? >> well, i think basically more of the same. the government has put by my --

they're up $6 trillion into the economy since covid started. this money just keeps circulating. we cannot meet demand due to labor shortages and bottle necks and people choosing to stay home and clogged up ports i do not see anything on the horizon that will quickly change this this imbalance creates rising prices initially, employers are having have had to raise the wages to retain workers with special skills so i think this is gaining momentum and people say that it is -- they expect it to slow down, but i do not see why it would slow down the fed raising rates by 1 to 2% when inflation is 5% it's not going to stop people from

borrowing money so i think it's more of the same i think it will go much higher and the debt service will add to the deficit and further increasing the inflation and pressure so i think - >> how will you look back -- >> sorry >> let me -- i'm sorry for interrupting you how will you look back on 2021 in terms of the overwhelming presence that the retail investor has had this year, the mean stock mania we all witnessed. how will you process all of that was that a moment in time or is what something that's here to stay >> so actually, the mean stock mania scares me because that says to me that people are not looking to fundamentals and this is just people throwing money at

things, and that cannot come to a good end but otherwise, i -- the way i see is where do you put it you can put it into real estate or you can put it to stocks that's it. and by the way, when you put the money in there that doesn't mean that the money has been spoken for because for every buyer, there's a seller and the seller will not have the money and, you know, will have to do something with it, right so, you know, the money keeps circulating and price levels will have to raise -- rise by an amount that has been added to the deficit which is roughly 30% in the last three years or so. so and we haven't seen prices rise by 30% over two years, so

it's still a lot to go. >> yeah. thomas, you know, separate from the actual mean stocks, one of the features of the huge public rush toward trading and investing is this tremendous surge in options trading volumes from retail investors. i know you do back to the list of the derivatives trading so it's been growing more quickly than cash equity trading for a long time and we have seen this acceleration is it sustainable and what have you been seeing with regard to using options more than ever is it a positive is it a risk >> so internet brokers represents our -- our customers represent roughly 10% of the options volume, and only 7% of the stock volume so, yes, our customers are more

active on the option front, and there is no reason to believe that that will not continue. >> thomas, similar to that, i'm curious about what you're seeing with regard to crypto. i see in the notes that you have about 30,000 accounts who have asked to upgrade to trading crypto what are you seeing so far in terms of flows and are you concerned at all about regulation in the new year >> well, no, i think we will welcome regulation in the crypto space because right know, we're just feeling our way in the dark and we don't know what we're doing and it would be fantastic if we had some regulation. we need that so i expect the crypto space to become much more active this year, and just goes in line with the way we expect inflation to unfold. >> you know, speaking of

regulation, mr. petterffy, payment for order flow is one of the hot topics of 2021 i'm wondering if you think that 2022 is the year that regulators will take a stronger hand against that >> well, i think that the s.e.c. will certainly make some definite statements and will probably issue comments, but i do not expect them to band payment, although they will try. >> but you don't expect any big changes on that front? >> no. i expect them to ask for much more disclosure and much more detailed disclosure. i just do not see how they can campaign on -- basically, the

same thing has been happening mostly for 200 years now the big bank sales departments get the orders and they give it to the trading department, the trading department fills the order. they just do not have exquisite payments as that happens at times when there are new sales orders and they have to -- then they have to disclose the payment because they're two different companies. but when the payment happens inside the same company, there is no disclosure so people don't know any better, so they don't know there's payment, but in fact it's the same thing. >> mr. petterffy, once again, i wish you happy and healthy and we look forward to speaking who with you in 2022. >> thank you happy new year to you too. as we head to a break, economic out the biggest winners

on the s&p 500 for the year. two energy companies really came back to life marathon oil and fortinet and moderna and signature bank rounding out the top five. coming up, more on the cdc's guidance on avoiding cruise travel that's in three minutes. digital transformation has failed to take off. because it hasn't removed the endless mundane work we all hate. ♪ ♪ ♪ automation can solve that by taking on repetitive tasks for us. unleash your potential. uipath. reboot work.

welcome back to "squawk on the street." turning to the cruise lines the cdc urging people to avoid sailing. vaccinated or not. this is just a recommendation, not a mandate, but are you seeing any immediate effect in terms of bookings? >> well, the cruise lines are responding and the number of ships with covid continue to increase now at 91, last friday for some context we were at 75, health officials say the chances of getting covid on cruise ships is very high

the latest guidance is drawing criticism from the cruise executives you don't get asked for vaccination status while flying domestically but on a cruise you do and others point to the low hospitalization rate the ceo of royal caribbean said they saw no hospitalizations for who tested positivity of omicron so far and the broader lobby calling the cdc's guidance perplexing. they stopped short of unveiling any restrictions and that's why we're not seeing the stocks trade down sharply but they did reverse yesterday's gains currently trading in negative territory. but it's seen as a sort of setback for the wider cruise industry which unlike hotels or vacation rentals are still far away from getting back to pre-pandemic levels, having just restarted sailings over the summer after being shut down for nearly 15 months due to covid. so 2022 will certainly be, leslie, a show me story for wall street

they'll want to know whether the companies can emerge from this pandemic stronger. your question on bookings, yesterday, we heard from ceo richard feign of royal, we're starting to see the cancellations due to omicron, but the broader narrative that they have always tried to convey to wall street, the longer term picture, we are talking about the second half of 2022 looks very strong. >> i'm curious what it is about cruise ships in particular that gives cdc pause, because they're not telling people not to fly, they're not recommending you don't fly or eat in an indoor restaurant is there something about cruising in particular that's giving them pause with omicron? >> yeah, it's a great point. this is a conversation that often comes up when i speak to different cruise executives. over the past year or so, why are the cruise lines getting singled out here i think scientists would point to them being the large vessels, indoor and outdoor, where you have a high level of proximity with other people. and in the past, at the height of the pandemic, we did see a

covid outbreak that became an international story and the poster child for the pandemic and the key goal is for the cdc to ensure history does not repeat itself i think that's why you're seeing these type of measures and guidance coming out of the cdc some would say it's an overreaction and others are saying they're taking things very seriously being very conservative as the cruise lines get back to sea here. >> yeah. obviously, i mean, you know, just people spend days at a time on the ship, unlike the flight, where it's more in and out kind of situation i wonder on the books question, this is guidance, right? this is essentially, you know, the customer ultimately chooses if they want to book is there going to be any way to tell whether the cdc guidance itself put further -- can put a

further dampening on bookings? >> we'll get the report from royal caribbean and that will tell us how omicron, how that's having an impact on customer sentiment around sailing is it discouraging people from getting on or you know what, we'll ignore it. the next few weeks is when we'll get the precise number leslie knows this because she's been on a bunch of cruises as i have, so you tend to book ten months out there are real bookings they're using toindicate that the longer term story is still very much intact, mike. >> yeah. all right, couple of weeks we will certainly be combing through those numbers. thank you very much. coming up, are further declines still ahead for disney after it looks poised to finish the year the biggest laggard on

the dow? plus, are apple's air tags being used to track people and steal cars all that startat1: a. stn mes 100.m stay with us

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the final countdown to 2022 has begun. some countries around the globe already ringing in the new year, many deciding to cancel their celebrations with the latest omicron outbreak new york city, however, among those deciding to move ahead with its annual times square celebration requiring proof of vaccination, masks and cutting the number of attendees by 75% joining us now is tom harris president of the times square alliance that helps organize tonight's festivities. thank you for being here and happy new year to you. just kind of going to discuss the elephant in the room new york broke through its largest singal day covid record yesterday reporting at least 74,000 new cases i'm sure you've been having some very tough discussions over the last few weeks

are you confident that the measures that you've put in place and the limitations you have put in place are doing enough to really not help exacerbate the spread that is going on in new york right now >> leslie, thanks for having me on yes, we have beentalking to medical experts and it's all about choice you talk about choice in one of your last segments we are welcoming revellers back to times square as long as they're fully vaccinated and we require that they wear masks and the spectator viewing areas are going to be less densely filled. so we recognize that not everyone will be able to be in times square and they can tune in and watch the festivities from our website at tsq.org or on one of the net, works. >> what are you seeing so far in regards to sponsorship to this year's event sponsorship is an important money driver for new year's eve celebrations in times square are you seeing regular interest

back to 2019 levels? >> yes, we have some great sponsors planned, they have really stayed with us throughout this pandemic and we're very happy for them and we value them without them, we couldn't put on the event. >> how much of this, tom, and this is scott, by the way -- >> hi, scott >> -- how does a decision like this work? is it in conjunction with the mayor's office is it the mayor's decision and you have no choice but to go along with it? can you take us through the process of the decision to lessen the crowd >> i had a conversation with mayor de blasio, who's absolutely fantastic he wanted to know our thoughts on it and our thoughts were that we are a symbol to the world

times square is a reflection of the city and to the world and we thought it was important to show that we have recovered and that we can find safe and responsible ways to carry on our old traditions in aresponsible way covid is here and we need to find ways to live with it, live with it responsibly and also carry on those old traditions and have some fun. so, we recognize that not everyone could be here, so that's why we're giving people a choice you can be in times square if you're here, if you are one of those that are able to get in so that it's an not an overcrowded event or you can watch it from the safety of your home at tsq.org or on one of the net, withes >> i want to ask you about broadway because we've seen a wave of cancellations in recent weeks due to omicron cases prevalent in the cast and crew others are dark until the new year due to the covid cases. what has been the impact on the

times square economy which depends so heavily on these shows taking place and the tourism that comes to see those shows? >> broadway drives the economy of times square and also drives our humanity it's so important that these shows do everything that they can to carry on and they really have been trying it's a tough decision for them to cancel. i know they don't take it lightly. but the safety of the cast, crew and audience is their biggest factor so, when a show is canceled, it's because of those reasons. so, we should support broadway and all of the efforts that they're making to have the show go on in a safe and responsible manner and know that when those shows are canceled, it's because they just can't do it safely and they're making that decision on their own, which shows that they are putting people over profits and safety is their number one

concern. >> this is the most lucrative time for broadway shows because people come in for the holidays. tom, thank you for joining us. i will be watching >> thank you very much happy new year >> happy new year. all right. s&p hasn't fallen on the final trading day since 2017 little work to do. i wish both of you a happy, healthy new year and look forward to the new year, as well that does it for us on "squawk on the street. "techcheck" is right now. happy friday happy new year's eve and welcome to "techcheck" i'm deidre bosa