down the risk. >> fortress, a new group of investors coming in when they do their c corp. conversion >> pass. >> acls, axcelis >> apache, apa bought it during the show. >> all right good stuff we'll keep our eye on that nice move for apache today guys, great start to a new year. stock summit continues tomorrow. has does it for "the halftime report." "the exchange" starts now. >> thanks, scott markets are trying to start the year with gains, the nasdaq especially some are concerned valuations are too high off a strong year, but is the market actually cheaper now? we've got the numbers. bond yields are popping though in what started as a small breakout this morning, it is gathering pace as we move through the afternoon. ironic, the nasdaq is

outperforming. we will look at the global bond sell-off and more trends to watch. analysts placing bets. we are looking at four top picks for the year across different sectors. the first rapid fire of the new year is coming up. we begin with dom chu on the mar markets way over there >> i miss being next to you on the other side of the studio right now, but with covid protocols it is a different story. still i get to be in front of my favorite part of the wall to show you that the markets are generally positive right now but just to give you an idea where we stand, the dow industrial is up 55 points it is not massive but still green. the s&p 500, 4774, the last trade there. up about 8 points. at the highs of the session we were up roughly 29 or so points and down 8 points at the lows of the session to give you context around the trading range so far today. we have seen negative territory, but to kelly's point the nasdaq composite up, 15,756 the level there, up about three-quarters of 1%, the outperformer in

trading so far one place we are keeping a close eye is the yield picture, specifically with ten-year treasury note yields, currently above 1.62%, towards the higher end of the range we've seen over the course of the last couple of months at one point we were below 1.4% around the thanksgiving holiday or so, so keep an eye on that. those rising yields yielding positive results for the banks one of the best performing sectors out there, the s&p 500 financials look at jpmorgan chase bank of america is up 4% right now. citigroup is up 5% wells fargo is up nearly 6%. and 2.5% gains on morgan stanley on the investment bank side as well best performer in the s&p so far to kick off the new year, tesla, the electric vehicle maker we know the story by now better-than-expected deliveries in all of last year, especially in the fourth quarter. that's helping to drive tesla shares, 1173.06, up 11%, $116

and change over the last year, a 6% gain. we will keep an eye on tesla back to you. >> thanks. with the s&p surging 27% last year, out performing the dow and nasdaq, many analysts wonder if it has gotten ahead of itself or priced to perfection if you look at the p/e, the s&p is trading at 21 times now versus almost 23 times a year ago. what should you guy if stocks are less expensive now i guess everything joining me is mark avallone. it must be snowy where you are, mark >> it is, and it is quite nice actually >> it is beautiful when you don't have to deal with it because you can work from home and the rest of it so i'm curious for your thoughts on the market. what does this p/e say to you? >> well, i think the p/e is gist one measure of a lots of different variables. it is a fair metric. we want to look ate it we are also wondering why the p/e has dropped and why some of the expectations have dropped. we think it is a lot of it is

because we are going to get less fed stimulus, as we know the bond buying is reduced they may raise rates we could talk about that but we're going to get a lot less federal stimulus, and to under estimate how congress has played a role in this rally would be foolish because they literally put money in people's pockets, increased consumer demand, spending that's what is spiraling the inflation hike when the federal government is going to pull back on stimulus, the repercussions will be real, and i think that's one of the reasons growth will moderate at least towards the second half of this year. >> but does that leave you bearish or bullish on the markets? >> modestly optimistic expecting high single digit returns for the year several reasons for that, earnings are still strong. the consumer is still strong we're also looking at no alternative for investigators. i have to put money to work today, and to think about putting it in long-dated bonds and treasuries and high-quality

credit puts me at an extreme risk for interest rate hikes since interest rates will likely tick up -- we don't think they will be out of control, but even a modest move in interest rates can hurt bond prices so we're going to remain invested, as many investors are. it is the only tina trade. it has not gone away >> what do you make of the spike in bond yields to start off the year again, spike relatively speaking we're still around 160 on the ten-year >> i think it is going to move back up to that 1.7 range and stay there for a while if we get north of 2, we think that's the hard ceiling. look, as this -- as the fed reduces bond purchases and then if they raise rates at all, it is going to have a counter cyclical effect to the economy so will higher energy prices so will the increased regulations we are seeing. so are potentially higher taxes. this supply bubble will work itself out, and we think that the inventories that are then on hand, all of that will put a

negative, albeit a modest one, impact on to economic growth we're going to see gdp by the end of the year moderate into the 3%, maybe a 4% on the upper range, but it is going to measure the economy's growth we think that interest rates will spike up to maybe the 2% range, but they're going to hit a ceiling there, and the fed may even lose its nerve at that point if the economy's growth slows enough >> why do you like truist and sandy spring bank? i'm curious what your view on inf inflation is if you are in the camp that thinks growth is going to be moderating >> well, we like financials and we like banks and regional banks for the reasons i have been discussing, a modest rise in rates and a moderately strong economic growth scenario is ideal for banks. banks lose money when people don't pay back their loans if economy is strong enough and credit defaults are low, it is a boost for banks. you add rising interest rates, it helps their operating profits and margins widen.

those are two huge factors then we look at banks that are well managed in strong areas of the country. both of the names you mentioned are in the washington, d.c. area in a big way, and/or the southeast like truist. they will have favorable demographics they're having economic growth they're the ones seeing populations increase that's why we're favorable on banks, and it is consistent with our outlook on modest inflation and modest interest rate hikes >> you seem to think that the high multiple names could face some more downside what are you looking at and when are you going to strike? >> well, we've talked about that for a while now, that where we want to be in technology is cash flowing technology we have also talked about how a slight rise in rates will not hurt big, mega cap tech with strong cash flow and that's proven to be the case. we have also said higher rates hurt unproven companies, and that's also proven to be the case we still think it is too early to jump back in to a lot of the names that got pummelled, whether it is, you know, names

like teladoc and zoom. you could see that today even. some of the -- we're surprised some of the cloud companies are getting hit. >> yeah. >> that's a sector we think we're going to see more capex spending and potential growth, but some of these companies aren't as proven i think proven technology is where investors should be, and i think we should continue to wait to see more of a firmer bottom before going into the speculative names. >> mark, thanks very much for your time today. we appreciate it >> good to be here >> mark avallone with potomac wealth advisers. let's move to the covid front. the fda is expanding eligibility for booster shots as the number of cases in the u.s. hits a new high meg tirrell is here with the latest meg, are they just extending it for the pfizer shot? >> so far, yes the pfizer vaccine now cleared by the fda for kids ages 12 to 15 as a booster. another change the fda made today also applies only to folks who got pfizer originally, is that they are now eligible for a booster as soon as five months

after the second dose compared with six months. for moderna it is still six months the fda explaining that by essentially saying they had data for shortening pfizer and they don't have the data for shortening moderna they also cleared third doses for kids who are immunocompromised between the ages of 5 and 11 still no word on when a vaccine for younger children under 5 will be available. we know there had been a delay for pfizer in that, so a lot of us are still waiting on that this as cases are reaching astro no, mas astronomic highs, reaching more than 500,000 a day in the u.s. you are getting the vertical line-up on the case count right now. hospitalizations are rising, but not at the same clip as cases. deaths have held steady around between 1,200 and 1,300 a day there's hope looking at south africa and also at new biological data coming out about the omicron itself that it is

milder however, there are still a lot of warning about the potential to overwhelm hospitals, some of which we are seeing right now. of course, we pay attention to cases because it makes a huge difference in staffing hospitals, being able to staff flights. dr. fauci talking about the pushback to the cdc's recommendation to be able to end isolation after five days without testing. he suggested yesterday that might change here is what he said >> you're right, there has been some concern about why we don't ask people at that five-day period to get tested that is something that is now under consideration. the cdc is very well aware that there has been some pushback about that looking at it again, there may be an option in that, that testing could be a part of that. i think we will be hearing more about that in the next day or so from the cdc >> so, kelly, we will wait to see if we hear from the cdc about that at the same time though a big problem is just getting that test it is really difficult right

now. >> yeah. >> kelly >> two practical questions on omicron, meg, for those of us who just had it. number one, are we likely to get it again is it like the cold or the flu in that regard, where you might contract some version of it again? number two, are we spreaders can we spread it to others >> well, if you where no longer infected, you shouldn't be able to spread it to others at this point. that question about when you could get omicron again, how long your immunity should last, that is a key question here, and we just don't know we are going to have to wait to see the data as to how long the protection will last, and it will likely come from areas like south africa first, which went through the infection first. we don't know how long lasting the protection will be one good piece of news though, it looks like omicron protects against delta, so that's good news potentially suggesting it could edge the other variant out >> interesting all right. meg, thanks for that recap meg tirrell with the latest on the covid front. coming up, will 2022 be the

year of the divided states of america taking center stage? we will look at the nation split and what it means for policy and the economy what top strategist next plus, shares of tesla soaring to start the year after posting their first month of losses since may we will dig into the auto maker's record delivery numbers and ceo elon musk's ambitious nine-year goal here is the dow heat map evenly split there goldman leading the way. home depot, interesting, big winner of last year. it is lagging. it is the biggest decliner right now. we will be back in a moment. this is "the exchange" on cnbc zero-commission trades for online u.s. stocks and etfs. and a commitment to get you the best price on every trade, which saved investors over $1.5 billion last year. that's decision tech. only from fidelity. ♪♪

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and for even more value, ask how to get up to a $500 prepaid card. get a great deal for your business with the ready. set. save. sale today. comcast business. powering possibilities. ♪ the closely divided congress makes it unlikely any major legislation will pass this year. my next guest says watch action on the regulatory front as a result issues like antitrust, crypto and the supply chain, we could see big moves with stock market impact r brian gardner is here with stifel great to have you. >> good afternoon. happy new year yeah, like you said, it is going to be quiet on the congressional front, at least unproductive on the congressional front. antitrust, the ftc has already been gearing up, looking at the

rules for antitrust laws i think you are going to see more of a push than you have already started to see in 2021, you will see more of the push in 2022 with a couple of sectors probably most in focus a ag, health care, farm s pharmaceutical, transportation as well, tech. those are probably the primary areas they will put interest on. >> some interests we don't talk about like ag, health and transportation at the risk of sidelining them, let's ask on the tech piece of it if i'm an investor in facebook, amazon or apple, what are the big risks you see out there in terms of policy? >> you know, i'm not sure that we are talking about that breakup, but i think the focus of these investigations and policy initiatives will be heavy on data security, privacy, consumer rights, that area so i think that's -- and i kind

of know that in with antitrust, because i think the ftc will use the antitrust powers to get sbeeinto these areas in addition to the consumer protection role >> with that said, is it a lot of big announcements but not a big market impact kind of year let's broaden to all of the topics you mentioned which do you think could have the biggest market impact? >> you know, on market impact, i think first reaction a lot of people have is that regulations, bad, and stocks are going to sell off i take a slightly different view in that it raises the barriers of sbrentrants, so it locks in e current market and protects current market players, industry players that have built-in advantages i think the current players actually benefit there's less of a risk to them than people perceive so i think people could be surprised across the board by the market reaction. there could be a short-term

sell-off but longer term i think it actually benefits current players. >> interesting so then out side of tech you mentioned a couple of areas to watch. what are you hearing in terms of the kinds of actions we could see, whether on health, ag or transportation >> so, you know, the doj and ftc have already gone down the road of looking at a couple of mergers in the railroad space. i think we're going to see more of that. in financials, we talk a lot about banking, but the -- there is a big merger in the insurance world with aeon and willis that was blocked. i think you could see more of that you know, kind of pivoting back to financials since i mentioned them, i think you are going to see a lot of work outside the ftc, more of the banking regulators of them revising their merger guidelines. that's going to affect mostly the largest banks. you are going to see more of an

emphasis on financial stability. does a larger bank pose a greater risk or how much of a greater risk to the financial system and then competitiveness issues in line with what the biden administration had put out earlier in 2021. >> all right as a final call, brian, what do you think happens in the midterms >> in the midterms i think it is an easy call on the house. i will start there i think republicans are really well positioned to pick up the house and win it back. the senate is tougher. the senate is not a -- it is not a national election, so only a third of the senate is running if you look at the senate map, it is not that bad for democrats. so i mean i can go through a couple of scenarios where i can actually have democrats picking up a seat in the senate, but i can also see republicans winning the senate the senate is too close to call this far out the house is definitely, you know, to the extent you can say ten months out something is definitely going to happen, i feel very confident the republicans will win the house >> all right we will check in and see how that turns thank you so much for your time

today, brian we appreciate it >> thank you, kelly. >> brian gardner with stifel still ahead, 13,000 flights cancelled in the final week of last year, but airline stocks are off to an auspicious start today. you see a lot of green on the screen we will ask one analyst what the rk imaets anticipating for the airlines in 2022 ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq

♪ welcome back to "the exchange," everybody stocks are regaining some of the earlier momentum the dow is up 94 at the highs it was up 164 and at the lows down 90. the nasdaq leading the way with a 123 point gain positive start for reopening names. royal caribbean's ceo takes the

helm today richard feign stepping down but staying on as the board's chair. the casinos also out performing. wynn, las vegas sands, mgm resorts, all gaining 1% 203%, a more modest rally. >> the stay-at-home stocks are seeing slight declines to kick off the year wells fargo is higher after barclay's upgraded the stock to overweight they say it stands to benefit from higher rates and see the stock climbing 30% from here pretty significant because this company shares just posted their best year since 1997 up 60% for more on that call you can go over to cnbc.com/pro and wells is up 5.5% today now to frank holland for a cnbc news update. hi, frank. >> hey there, kelly. happy new year here is what is happening at this hour. majority leader chuck schumer says the senate will vote on

filibuster rule changes to advance voting democrats say it is needed a settlement between jeffrey epstein and one woman who accused him of sexual abuse has been made public the deal promised her a $500,000 payment, but the settlement includes protections from law sites filed by her against other potential defendants it is not clear whether it includes her sexual assault lawsuit against britain's prince andrew the head coach of the tampa bay buccaneers says wide receiver antonio brown did not tell coaches he was injured before leaving in the middle of yesterday's game against the jets the coach said brown made the decision on his own to walk out of the stadium in a viral way. it is on the screen right now. on the news, how did it come to this and what brown is saying about leaving the bucs that's tonight at 7:00 eastern that's the very latest, kelly. back to you. >> i am looking forward to that, frank. thank you very much. coming up here, the first

rapid fire of the year and we're going over some of wall street's top picks. we are looking at fast feed, fast food, big oil and a big bank does our panel agree with the street it is up next on "the exchange." your record label is taking off. but so is your sound engineer.

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♪ welcome back, everybody. let's catch you up on a couple of stories that should be on your radar today, four big calls from wall street for 2022 in this edition of "rapid fire." to help me break down the calls, nancy tangler. kim seymore, and dominic chu rounds things out for us welcome, one and all our first name is nike guggenheim naming it a top pick in '22, raising their earnings estimates today for the year as well, saying digital investments including the metaverse could be a key catalyst for a move higher this year. nike's share up about 18% in

'21. i see you nodding along, tim you own it >> i own it. i love it. not only is it an iconic brand, it has proven the innovation behind the product and certainly the wow factor, i think. i think that the investments that they've made in logistics in the rp, but obviously the dtc business is -- you know, the target is 50%. john donnaaho is the guy leading that, but, again, we think of a guy on the consumer side and having comps that are blowing it away and giving you relief around concerns around asia. i think if you look at guggenheim's upgrade, stock is still at 25 times 23, but it deserves a premium and i stay there. i love it. >> nancy, what do you think about nike >> i think nike has done a lot of things right. i agree with tim they get about 18.5% of their sales from china and they've been able to thread that needle nicely as opposed to some other

retailers. that said, we don't own it in our portfolios anymore because of valuation i love the brand, i own it personally, but i think you have to be sensitive. i would advise to wait for a pull back. it is at 35, i think is what tim said, for '23. it is at 34 on '22 earnings, and the yield at .75, so you're not getting paid much in terms of yield premium. i think there are probably some better places to hang out in the near term. >> it is one of those stocks, dom, that makes you go, yeah, that's why it has the high p/e you know, when it is pretty much a sure thing you have to pay up for it >> it is not just that, it is the brand cache. it has been there a long time. there was a highlight in note that caught my attention, it is the metaverse. after reading the note, i thought about it in many of the conversations i have had with investors, traders up and down wall street, when we talk about the metaverse, either in an optimistic or critical way, the one brand that comes up more often than not with regard to who could benefit as a

consumer brand from a metaverse play, that could be big in the future, happens to be nike it gets mentioned a lot. when we talk about the future for nike, capitalizing on the brand in a whole that's like farmville 2.0 could be something where it could really drive some of the financial performance in the future the question, of course, is to tim and nancy's point the valuation. >> yeah, listen, with omicron we are all looking for a metaverse tomorrow we can do a tv show in and all be virtually at least in the same place it is accelerating some of the trends let's move along and talk. yes, tech is involved here but mcdonald's is kind of an old school call, a top pick from sandler. according to their survey, consumers are loving the drive through, as always the hamburgers and chicken, all of which mcdonald's has a leg up in shares were up 25% in 2021, dom, so a similar story to nike >> i would say if you are a viewer out there or a listener

to us right now, think about when you drive past any fast food chain where i live out in the new york metro area, what i have tended to see during the course of the virus pandemic, and even as of late in the course of the last few months is a lot of traffic at the drive through and in the parking lots, for kind of the curb-side pickup at places like mcdonald's i have not seen as much of that, as much as we talked about the chicken wars between popeye's, kfc, wendy's and everybody else, i haven't seen as much of that traffic there. mcdonald's maybe has a position where they can now say they've driven a lot of the efficiency into their operation around the pandemic operations. if that is to stay, that could be a big reason some traders are getting more optimistic about mcdonald's in coming months. >> tim, do you own mcdonald's? >> i do and i'm going to make sure i'm not behind dom on the road because he clearly breaks for mcdonald's i think you have a case where the celebrity innovation, the partnerships with travis scott,

you name it, is part of the wow factor mcdonald's is cool again relative to their peers, they're even claiming esg scoring, which is not something we thought about with mcdonald's in terms of the quality of the food the food has changed i think the other dynamic here is not only are u.s. comps 18 out of the last 20 quarters outperforming the peer group, but the unit growth on the stores there was a time mcdonald's needed to close down stores. they're actually opening in high-growth areas. you will see it more as a growth company. add in loyalty, which helps the valuation, and a stock that did nothing for 18 months started breaking out in october and i think it is going higher i am long the name >> i keep trying the chicken nuggets, but i still don't -- i will take wendy's, but i still can't get on board with mcdonald's what do you think of the name? >> we own it it is one of the largest holdings in our equity strategy, pricing power, low price point restaurant and that appeals to a broader universe of consumers. also, we are seeing a shift to services spending in 2022, so i

think all of that benefits mcdonald's they've got a healthy yield. they grow the dividend as tim pointed out comps are outperforming their score. many years ago they got a higher rating on treatment of the animals that they purchased than chipotle did, which is another one of our largest holdings. i think there's a lot to like about this name as you go forward, but the stock has not outperformed the market for three years. it has kind of muddled along with the s&p >> and it still has a 34 p/e, so it is not -- it is still up there, even given the under performance. >> right >> interesting one more pick and then we will throw you a curveball. let's talk about energy space before we do that. chevron is the top pick from the analyst for the energy space this year, although they think the sector overall is going to outperform again exxon did slightly better than chevron last year, but they say the balance sheet for chevron is the epitome of capital discipline and offers better risk

we all know the story, and exxon still had a better year. i guess it is because they can benefit more on the upside but maybe hurt more on the downside. >> i think that's right. at the margin in our portfolios we have been moving away from some of the upstream names where we made a good bit of our money, but we think the majority of price moves in oil has been made we expect oil to continue to appreciate in the coming months. we put our allocation, we moved marginally into chevron. i think it is the best managed of the integrated. it has 4.5% yield, grow the dividend about 4.4% annually over the last five years it is a name if you are worried about keeping up with inflation because real yields are still negative, this is a name you might want to park in. i don't think forever, but certainly for the next 18 months >> tim, do you think energy can have another good year >> i do. look, i think energy prices overall, but specifically prices are going higher this is a finkunction of the bin

energy policy, it is very carbon friendly look, a lot of the companies cut capex dramatically as noted, chevron is probably the most efficient in the space. in fact, i would argue chevron is the company exxon wants to be who would have thought that ten years ago? but what they've done on cutting capex and being efficient and the free cash yields here i think for the whole sector remember, integrated oil companies never used to run their businesses for you, the equity investor. i think they're doing that now now. i think there are more investors coming in in '22 as we start to realize that the energy sector is for real on being more efficient, and i think they are. >> i want to mention bank of america was the top pick from barclay's for 2022 they say it is the least exposed to capital markets which they think is a positive. we want to mention, look at shares of apple. they are getting very, very close to the $3 trillion mark. not just a story for the last year obviously they still haven't hit that level. in fact, we au analysts like dan

ives yesterday writing they will be the first mega cap tech stock to do it this year they could achieve it on the first trading day of the year, dom. 182.35, about 50 cents away from the mark right now >> what was it, like 86 cents. >> yeah. >> whatever it was, that was the number we needed to cross over maybe it is no surprise. given the fact we have talked about apple a lot over the course of the last year. what is interesting is the tale of two apples we did talk about last year. in the first half of 2021, a severe underperformer. nothing to really write home about, nothing going on the stock. all of a sudden in the last three to four months of the year, it started to take off to the races. this notion that investors had a dual threat approach to what was happening with apple they could use it as a growth engine for their portfolio they could also use it as a safety haven for some of their trades in uncertain times. so i don't know. apple is just a weird thing to watch because you don't know what is driving it, but it seems

to all be positive, which just gives me a little bit of pause i guess. >> you can still look through the financials, tim shall and understand how it is worth $3 trillion on a soup-to-nuts price chart earnings and yet go, wait a minute, we are talking about a $3 trillion company. it was only two or three years ago we crossed $1 trillion for the first time and wondered in many cases how long it could hold i guess we have our answer >> and so dom's point is, i think, just the passive flows into the equity market and the dominant position apple holds on a weightings basis is part of this move. the part of it that i think has been the multiple expansion has also been around the services business i think part of the call on webb bush is $100 billion in services revenue by 2024. it is a 30 times sales number gist as a services company right now. if you believe that number, without getting all of the other stuff. but the 5g, the product cycle, the fact that i think we are still very early in this

refresh, the best brand with a billion installed base, you can always own apple, at least at these valuations, in a market that's not cheap >> crazy nancy, i will give you the last word >> yes, kelly, we have owned the stock since 2013 and increasingly became enamored of the services story we were building when the yield was 3% we still own it. we own less than we used to own from a valuation standpoint, it is fully reflecting its value. but it is a safe name for investors to be invested in, and we're at that stage in the cycle where we're shifting to quality growth i think in the coming years. so i think you stick with it if it dips, you continue -- you continue to add to it in your portfolio. it is hard to argue with it, at least for the near -- intermediate term. >> it is almost like as we talk we are seeing if it can go above 182.52, for those who can't see the screen again, the $3 trillion mark is at 182.56. that said, it could take a week.

who knows? i will leave it there. thank you, nancy tengler, tim seymore and dom chu for the rapid fire stocks had 20% returns last year and are starting in the green now, but there's always a threat lurking around the corner up next, morgan stanley's chief global strategist gives us his arggest risk for stocks this ye oh yeah, we gotta take off. you downloaded the td ameritrade mobile app so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard before we board. excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position. you two are all set. have a great flight. thanks. we'll see ya. ah, they're getting so smart. choose the app that fits your investing style. ♪♪

♪ welcome back to "the exchange". covid cases at a record high a worker shortage, rising deficits, high inflation numbers. those are the typical market risks we hear about, but my next guest says they're not the ones he is most focused on. he just released top economic trends to watch this year and there are a few things he would add to that list like greenflation he is also the author of "the ten rules of successful nations. ruchir sharma, great to have you

here what are some of your top concerns >> i think you pointed out greenflation is a concern for me because we are all obsessed with this world, but some basics are being forgotten, which is to build this new tech world and also as we get more concerned about climate change we still need to use a lot of commodities to get there what i think is sort of under appreciated is how under invested we are in some of these nature commodities it is not just oil it has to do with copper it has to do with aliuminum the under investment in these commodities over the last five to ten years has been pretty significant, and yet demand is expected to only increase for some of these commodities as we look to build a new green infrastructure yes, green station remains a top concern for the year >> while it could be a concern and a problem for customers,

overall some of the concerns you have, baby bust is one that underpins everything we talk about from the debt and deficit situation to the worker shortage explain how you think it could be a risk this year. >> well, i think this will be one of the big surprises of the pandemic, which is the fact that we have had a baby bust, which is that people thought that staying indoors maybe we will have a pick up in birth rates. instead, we have had a decline in birth rates in most major economies around the world china's leading that decline in some ways. i -- significant growth implications because the world's labor force in many countries was already shrinking before the pandemic, and that shrinkage has been accelerated by the pandemic now, remember that the main reason the global economy grew at a very fast pace in the

post-world war ii period was because we had a baby boom there was a massive demographic dividend that the world reaped after the second world war that demographic dividend is over for most countries in the world. there are more than 50 countries now where the labor force is shrinking. that number was just 17 at the start of the century, so a major trend which presages slower economic growth in the decade ahead. >> one more because we can only handle three pieces of bad news at once. >> right >> let's talk about the paradox that is important and underpins everything you are saying it has already petered out and it was only in the u.s. where we saw that >> yes you know, like we saw a big surge in productivity and a lot of people thought that something was going on here in terms of increased digitalization, which is true. but i think with the data, it is just not bearing that out because usually you do tend to see a big surge in productivity at the start of an economic

recovery, and that tends to fade that's the pattern we are again following, only just more quickly as people seem to be working longer hours from home but not producing anything significantly more so i think that is another concern. now, it is not all a gloomy picture, but since we picked on three concerns, the productivity paradox is something i find very disconcerting given the kind of technological advances we are seeing in the world. >> yeah. ruchir, we will leave it there ruchir sharma joining me from morgan stanley investment institute. know that apple just hit the $3 trillion mark in total market cap, first $3 trillion company trading in the u.s., probably trading in the world a couple of years after we crossed a trillion for the first time it has doubled and tripled that level 182.86 was the place

we are about 10 cent below the level and we punctured through it a moment ago. a 2.9% rally for apple oday. there was good news over the weekend, some positive analyst commentary helping it to get across that mark dominic chu, tell me your thoughts here. >> i'm watching it right now i'm looking, you know, at my screen to look at the fundamentals about it. we talked in the last segment about some of the reasons people own it the differ denied yield is maybe one of them. it is not really a huge dividend even though we know they are one of the biggest buyers back of their stocks and also dividend pairs out there in terms of total amount, but a half percent yield it is difficult. i mean the idea that the high was 182.88 almost makes you feel there were folks wanting to push it to that level just to say we have gotten it there and then we backed off a bit still though, if you look at the relative importance where apple has been over the course of, say, the last decade and kind of where it is right now, it has assumed kind of a leadership position up until now the idea of having

a $3 trillion company in this marketplace was bound to happen, and it might have been apple the real question for many traders and investors is just how quickly it can get there you mentioned before, kelly, how quickly it got to the $1 trillion to $2 trillion mark, and now to the $3 trillion mark, it goes to show how much appetite there's been over the course of the last five to six years for you. what you are seeing on the chart is the march towards that $3 trillion like we said, back in august 2018 it was $1 trillion. it was a year -- or two years later it got to $2 trillion. here we are now at $3 trillion if this is a situation where apple has become this kind of generation's darling, what does it then mean for the future of apple? we have seen many companies over the course of the last 50 years take up that mantle, take up that figure head, that standard, because the standard bearer of the market, only to see them kind of top out where they were and maybe start to fall off a little bit how long is it going to be

before apple gets there, if it ever does? that's the reason this $3 trillion mark is an interesting point, milestone in the overall narrative, kelly, for what is happening with apple >> i am looking at dan ives' note for yesterday where he is writing, demand looks strong for the cycle. we believe demand is outstripping appleby 12 million units in the december quarter. he goes on to say apple is on pace to become the first $3 trillion in 2022 we are talking about it taking place on the first trading day of the year. pretty incredible. >> it is incredible. call it maybe five, seven years ago, this notion whenever we talked about apple and the driver really for the valuation, it was really about the hardware it was about iphone sales and for good reason. it is the biggest driver of sales and profitability for the company, it has been for several years now. to the point of our "rapid fire" conversation with nancy tengler and tim seymore, there's an

emphasis from investors these days about the services business, without the recurring revenue it can generate without having to sell another hand set base of the installed base if there's a reason investors are putting a premium multiple on a certain aspect of the business, it is one of the reasons why in the past on certn aspects of the business -- earlier in the year we talked about the margin pressures around ams but then there was a point where the narrative turned toward globe services and cloud computing. we are at a stage right now where apple has to become a story about whether or not investigators really believe that the services business is going to grow past enough kelly to justify that valuation of. >> i don't know. saudi aram coat $2 trillion was rivaling apple at $3 trillion i have to imagine they are in a class of their own? i think that you are right. >> dom chu, we appreciate it. speaking of trillion dollar

companies, elon musk congratulating employees for strong deliveries. he thub should be thanking them for making him 10% or 11% richer how much could they end up delivering this year i am hearing huge numbers. >> you are starting to hear people say 1.5 million, close to 2 million. we will talk about that. let me give you the numbers in terms of what they delivered for the fourth quarter and all of lastier. both were better than expected i want to "the news with shepard smith" you the annual sales growth that tesla's deliveries have shone over the last ten years. look at the growth, from 2020 to 2021, 936,000 vehicles delivered last year, up 87% compared to 2020 now 95% of the vehicles delivered from models and model y. that was how it has been

designed the last several quarters they are expanding model y production in 2022 that's why so many people are optimistic about what they might see this year when it comes to deliveries here's the consensus, 1.34 million vehicles that's what the analyst are expecting. if they hit that, that's an increase of 43%. a lot of people are saying, shouldn't it be growth of 50%, 60%? which is why you are starting to hear people say the texas and berlin plants are opening, maybe it is close to 2 million an analyst at morgan stanley put out a note saying at this point we describe 2 million as a stretch target but one that looks more realistic following 4q deliveries. we will find out more about where tesla is in terms of its expectations later on this month or early next month when the company reports q4 results deutsche bank, jp morgan all out today with new estimates for the

fourth quarter results, that are expected to be very strong, especially with growth margins that's the area where you are going to see emphasis as the analyst notes indicates what we can expect in the q4 results and increasingly the focus will be what do we think can happen in 2022. >> we used to have a poke game, me and my husband, tesla, tesla, but now they are plentiful on the streets. at least for today, airline stocks are rallying. after two years of bad luck and bad news,l the skies clear in 2022. the big story of the day, apple crossing the $3 trillion at cap level, first u.s. company to do that got two pennies before that mark it is just below that level right now. much more coming up on "power

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2021 was a tough year for the airlines it seemed like the travel recovery was on track, then della hit, then omicron hit, and labor shortages and severe weather have caused airlines to cancel more than 13 tlou scheduled flights just last week today the stocks are doing well, rebounding in the range of 3% to 4% joining me, connor cunningham, you reevaluated and upgraded your stocks. >> we upgraded united, downgraded others. it has been a challenging start to 2022, the operational issues and staffing shortages that are a big issue in the near term however, you can still kind of paint a relatively positive demand picture come this summer as we move past the peak cases right now.

we are optimistic about the recovery this year we expect a modest profit from the industry as a whole and an overall better mix shift with business travel and international coming back. >> you are looking at those as key catalysts for dealta and united delta, your top pick, and you upgraded united. how far below are the airlines from their all-time highs. >> in terms of demand or business travel. >> or the stock price, yeah. >> in general, i would say business travel is down 50 in 2021 we expect that to gradually improve. we are not expecting a full recovery in 2022 by any stretch, but a potential full recovery come 2023. that itself should drive, i would exempt, overall stock movement this year and next. again, it is more of a better mix shift than anything else, which will be positive for pricing overall. if you haven't bought your

tickets now, it is probably a good time to start thinking about it because it is going to be expensive next year. >> american has the most potential upside from the recovery this year, you think? >> i would just say that american, its balance sheet can't get much worse they have added debt over the years. they are refleeting, and near the end. they should start the use excess cash flow to pay down debt from here they do have a balance sheet history relative to some of the others it should get better from here. >> how much upside do you see for delta, united, alaska and allegiant? >> we are thinking potentially 20 to 30% upside this year really, again, it is going to come down to how much the pandemic head winds ease throughout the summer. again, come summertime frame we should be past omicron at that

point. should be a decent outlook for the group during the big earnings period. so there is potential, a significant upside this year i would say. >> conditioner, thank you for joining us today i appreciate night thank you >> and like he said, go book your tickets now prices are going up. connor cunningham from mkm partners that does it for "the exchange," everybody, thank you so much stick around for "power lunch," which begins right now ♪ welcome to "power lunch," everybody. and happy new year they may put kelly and me in separate studios but they can't keep us apart. welcome to the first "power lunch" of the new year i'm tyler mathisen, the new year begins with a major milestone for apple. here's what's ahead -- a chip glut a shortage of semis could give way to an oversupply that's the call from one top analyst who has a list of stocks he says could benefit from that about-face. and out of