we'll see what approach pays off. we appreciate it. >> all right thank you very much. thank you for watching "power lunch. what day is it tuesday. seems like it ought to be friday thank you for watching "power lunch. "closing bell" starts right about now. ♪ thank you so much. welcome to "closing bell." i'm wilfred frost. another roller coaster session on wall street following monday's turn around the nasdaq up more than 1% in the final hour of trade. >> looking at session highs. i'm sara eisen welcome. let's look at what's driving the action fed chair powell testifying on capitol hill as partof the reconfirmation process reiterating the aim to rein in inflation. the energy sector adding to gains already for the year outperforming today as oil prices pop and technology is also broadly higher.

ubs downgraded the stock to sell we have 59 minutes left to go in the session. coming up today, a great read on the consumer, inflation and the impact of omicron. speaking with the ceos of krispy kreme and crocs about the factors. i got hungry prepping for the interviews plus the world bank out with a new warning about gloeblg growth speaking with the world bank president david malpass. >> mike santoli. joining us to talk about the fed and the economy is seth carpenter from morgan stanley. mike, what are you focused on? big rebound. do you believe it? >> it's actually doing what it is supposed to do to make the case that this is just a routine

pullback for the whipsaws in the sector that is we didn't get to a 5% pullback yesterday before that dip buying reflex kicked in. there's an enough recovery mode in the market. big growth stocks and speculate ifr growth stocks to righting ourselves. back up to the 4700 line that was what the bulls were hoping to hold on the downside and to find that upper end of the trading range. just been hanging around there equal weighted s&p underperforming today and has been okay. at yesterday's lows we were really not that far above where we peaked out in september so you kind of bring the trends into play. but the s&p in general has reaseshted the trend for now and basically in the middle at the moment take a look at the nasdaq 100. clearly the area that might have been over owned last year and

now rolled a little bit. it is not a terrible looking time but it is a down trend to it and almost a 10% pullback you did in the nasdaq come pos composite. basically had enough of a divergence that the largest stocks in the market have actually been able to lead today. this is the s&p equal weight s&p 500 as well as the extended market everything in the market outside of the s&p 500 you wanted to see a huge blast off around the election in small caps and large growthy early stage companies that make up the index not in the s&p 500 that sustained itself for a while. look at the roll that's been the area of the market taken the most punishment equal weight asserted's and closer to the highs and a consolidation in large cap and

traditional industries and see if this represents enough pain being absorbed by the market that in fact that skimmed away the froth and reset valuations in the market. that is the upbeat way the look at what we have been going through. >> the ark etf having a nice rebound today. software and semis hit lately is higher that's coming alongside strength in energy names and the cyclical groups is it something tied to powell that turned the market around to ease the yield story which the market was focused on so carefully especially the high growth names >> i don't know that it necessarily anything powell said or didn't say but the market spent weeks clenching up in advance and the hawkish rhetoric and the idea to price in perhaps four rate hikes this year that anything that seems incremental

less hawkish maybe was an opportunity for relief yields reached a point where it made sense to back off allowed for the sort of mean reversion stuffin the short term to take place and that's where we see fed speak that's not as hawkish as we geared up for. >> very strong intraday bounce mike, thank you. let's get to washington next where fed chair powell testified today as part of the process ylan muoy has the highlighted. >> the fed is primed the market for rate hikes next year today chair powell tried to do the same for congress saying inflation is further away from the goal than employment and committed to using the central bank tools to ensure that prices remain stable. he told lawmakers 2022 will be the year lift the foot off the

gas pedal. >> the economy no longer wants need or the policies in place to deal with the pandemic and the aftermath. that's what that is about. we are moving over the course of this year to a policy that is closer to normal but it's a long road to normal from where we are. >> powell brought up the possibility to shrink the fed policy sheet by the end of the year and touched on crypto saying the fed's report will be out in a couple of weeks and climate change there he said the fed's role would be contained to how it affects financial stability. back to you. >> thank you so much for more on chair powell's testify let's bring in jeff carpenter at morgan stanley. thank you for joining us i guess the first question is whether for you and the colleagues today's testimony changed the outlook for what the

fed's likely to do and what your conclusion is on that front. >> i don't think today's testimony changed things but reinforced the message of a flavor of from chair powell at the press conference from the december fmoc meeting and then the minutes wents into detail just how much they're prepared to start unwinding the balance sheet this year and then looking at market pricing the market's basically fully pricing in a rate hike in march so if balance sheet run yauch happens thereafter you talk about both tools that the fed has to start to tighten financial conditions. >> are you expecting yields to continue their surge that we have seen already year to date or kind of moved enough in the short term >> that's different to say i think if i talk to our colleagues in strategy they don't expect to have continued movements as sharp as what we see now but over time, yeah, it

would be natural for rates to back up a bit, both real and nominal. part is getting closer to the actual liftoff of short term interest rates and then the market has to sort through how much of a price reaction this unwind of the balance sheet is going to take. >> how much pain is the fed do you think willing to take on the equity market? we have seen so many times in the past the fed stepped in sort of to rescue if we continue to see weeks like we have to start the year and that we saw toward the end of last year as the fed ramps up the tightening how much will the fed allow? >> so if we listen to my good colleague mike wilson who's looking for a correction in equities for a while i think the range is 10 to 20% and if at the low end of that range the fed might look through it. remember from the last financial

stability report they came to the conclusion equities might be overvalued and if we get a modest correction there i think they might be willing to look through it and they're looking at how quick is the reaction and also is it spread more broadly across financial conditions? are we seeing simultaneously a big credit spread and a sharp kr correction that will get the attention. if it plays out over time as the market and economy realizes they're serious then i think they'll be a little bit more sanguine about it. >> we haven't seen the credit spreads widen too much or the dollar strengthen that much. thank you for joining us. >> thank you for having me. after the break, the first interview in the series of g guests on the state of the

consumer today the ceo of domino's pizza. the dow up almost 200 points session highs. you're watching "closing bell" on cnbc.

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who isn't fluent in bureaucracy, or maybe not in their own emotions. so show up, however you can, for the foster kids who need it most— at helpfosterchildren.com domino's the latest restaurant to get hit by food inflation. during its conference presentation today the company said it expects the food basket costs to grow by 8 to 10% this

year the stock had a rough go to start the year shares lower by 13% on the back of a strong year last year let's bring in domino's ceo. richard, great to have you back on the show. welcome. >> hi. nice to be with you. >> so for those that wondering or looking for signs that inflation in the u.s. economy is easing it doesn't sound like you're seeing that is that right? what are you seeing? >> we certainly don't see inflation slowing down in our business we take a look at our food basket as you mentioned. we see an 8 to 10% increase in the food baktd 2022 relative to 2021 and we see continued wage inflation across the marketplace as we look forward this year. >> how are you dealing with that, especially for a domino's which is so known for the promos and the deals that make it so

appealing for people to get delivery and takeout what you add to the $7.99 takeout package with the wings how do you adjust for inflation with the rise in costs >> as a starting point we come into this with very strong unit level economics across the business built on the fantastic work that our franchisees do each and every day. while the cost increases are tough to absorb we come from a great starting point with terrific economics and then thinking about how we manage through it there's a couple levers certainly pricing on the top line we will -- we are taking some pricing actions this year relative to the national offers. franchisees have tools to adjust menu prices and delivery fees. from there to the bottom line we

have initiatives around improving the efficiencies in the store and changing technology and the way we do things to deliver more product with fewer hours of labor. >> to what extent is labor costs a big factor in that inflation for you and the franchisees? >> it is a big factor. we certainly throughout 2020 and 2021 we saw wage costs increase, some driven by minimum wage increases but recently much more by the supply and demand for labor in the marketplace so in our supply chain business that we operate and the corporate stores that we operate we have taken a good bit of wage increases over time and will see more of that here in 2022. ultimately we want to create great well paying jobs for the

team inside domino's and we've got terrific economics in the business to allow us to do that and still serving the consumers with great value. >> we have seen slowing momentum from the consumer, right last quarter was the first u.s. comp decline in years for domino's. >> third quarter we did have a negative comp for the first time in about ten years in u.s. business but that's rolling over a 17 plus percent comp from the year before so on a two-year basis still really strong at about 15% on a 2-year basis. we still see a strong consumer out there. when you take a look at consumer spending, we look at savings that consumers have stockpiled over the course of the last couple of years. we see a robust consumer environment, sara. >> i was looking at the slides

that you're using in the presentation today and interested the hear what you think about the scope there is for you to expand more internationally. >> we think we've got runway for international growth that has been the fastest growing part of the business for sometime now as it relates to store growth as we shared with investors today just looking at the top 15 or so markets outside the u.s., we see runway for incremental 10,000 stores. the pizza segment is still underdeveloped internationally the segments are about the same in the u.s. as international about $40 billion of pizza sold in the u.s 40 billion outside yet 95% of the world's popu population lives outside the u.s. >> only 40 billion pizza in the u.s. i would have thought it was

more just on consumer trends right now, albertson's posted strong sales today and almost 20% growth from this period in 2019. people are still eating at home and have the omicron surge is that coming at the expense of eating out at restaurants or pick up and delivery can they both be firing on all cylinders right now? >> both can grow alongside one another. if you look at our business in the u.s. and look back over two years. pre-covid to what we reported through the third quarter of 2021, what you see on a same store sales basis is 15% growth on a 2-year basis and then when you factor in the store growth in the business we are looking at upper teens, two-year growth over two years prior so

certainly the delivery and carryout, the often premise of the restaurant business have grown significantly over the period alongside the growth with the grocers. >> richard, thank you so much for joining us. >> my pleasure. we have got 40 minutes left of the session at session highs up 200 briefly on the dow. still been a big intraday bounce from the earlier session lows. nasdaq up 1.3. been a year since ryan joined gamestop's board and sparked a revolution we'll look at how the reddit rebellion changed the short game check out the top searched tickers on cc.m.nbco 10-year racing away to a 2022 lead once again.

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welcome back a year since a board appointment at gamestop kicked off the

retail trading revolution. it was a game changing moment. leslie picker has the story for us hi, leslie. >> hey gamestop catapulted the idea of a short squeeze really into the mainstream let's take us back to one year ago. the conditions ripe for such an event. more than 100% of gamestop's tradeable shares on paper held short well beyond the typical proportion a formerly under the radar hedge fund named melvin disclosed a short position making the founder a common adversary with individual traders so as the stock surged over the course of january thanks in part to retail investors swapping stock picks the general consensus online to force melvin and others to cover at a loss. so where do things stand a year later? gamestop short interest has come

way down to just over 13% of the float. in fact, short interest in general is actually near record lows even if bears are out there they're worried about being the next melvin on the wrong side of the queeze, guys. >> the bears are scared away i guess on the shorts. thank you. >> hibernating. coming up, shake shack jumping today after the company released upbeat preliminary fourth quarter results we'll talk to the ceo. later jamie dimon sounding bullish about the u.s. economy. >> would have the best growth year ever this year i think since maybe sometime after -- before the great depression and so next year will be pretty good too. >> the global picture might not be as rosie why david malpass on the new warning about growth this year. check out the bond picture pop in yields that we have seen

in recent sessions takes a pause today persons allowing buying. the 10-year yield caused consternation back down to just below 1.75 we'll be right back.

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treatments and the stock up more than 15% bush health seeing a pop after jim cramer said the charitable trust is adding to the position in the stock buying 500 shares bringing the total position to about 2,000 shares after that trade cramer said the weakness is a buying opportunity and wants to take advantage to sign up for the investing club point your phone at the qr code on the screen boy has the company come a long way when it was embroiled in drug pricing controversies. >> i know. sure has. time for a news update with rahel solomon. rahel? >> hi. here's what's happening at this hour philadelphia fire officials say the christmas tree was the first to ignite in the house fire that killed 12 last week and almost certainly set on fire with a lighter. sources say that a child was

playing with a lighter by the tree before the fire began. a new york city aid is pouring in for that apartment building fire that killed 17 people and organizations from as far away as delaware bringing items. many residents traced the roots to a single town in gambia and new orleans is bringing back the indoor mask mandate ahead of mardi gras season in response to testing positivity rates above 30% and staffing shortages at hospitals. wait times up to ten hours at some facilities. new mask rirequirements go into place tomorrow sara >> thank you. nasdaq rebound continues first back to back gain for the nasdaq since christmas week.

that's where the selling is focused lately but up 1.4% s&p almost good for a gain of 1% shake shack is jumping today more than the market after releasing revenue figures. the company ceo weighs in. plus the world bank just out with a pretty down beat forecast for the "closing bell" economy we'll talk to the world bank president about what's causing the most concern later on "closing bell." will . yeah...uhhh... doug? [children laughing] sorry about that. umm...what...it's uhh... you alright? [loud exhale] [ding] never settle with power e*trade. it has powerful, easy-to-use tools to help you find opportunities, 24/7 support when you need answers, plus some of the lowest options in futures contract prices around. [ding] get e*trade and start trading today.

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shares of shake shack popping today. up more than 15% the company expects q4 and 2021

revenues to beat wall street expectations stock's still down more than 40% from the 52-week high just the company presented today at the annual icr and ceo joins us now. randy, welcome. >> thank you great to be with you. >> so that revenue forecast is really what caught people by surprise in a good way despite the food inflation and the staff shortages. what is driving the better growth that you are seeing >> we have had this strong, consistent slow recovery through covid and it really peaked in the q4 anybody's been around new york and doing things in fourth quarter things just were starting to move again october, november, december, early december felt great. we beat sales last year by over 30%. comped over 21%. the comps versus 2019 up for the first time since the pandemic so the team is working hard and it is a strong look at what shake

shack looks like as things began to return to normal. here we are a few weeks in been tougher the last few weeks and cyclical and will come out of this covid momentum as been really proud for the team how they started last year though. >> tough you mentioned in the presentation around staffing issues talk to us about what's going on omicron is still surging hopefully it peaked in new york but still very high levels so what is that like? it is not just new york. across the country as you build out the new stores. >> that's our belief and hope. staffing is hard, hard through covid. it's been exceptionally hard last year and in this moment it is tougher than ever one message to give to the audience at the shack or a person is serving give them a sincere thank you. it matters right now

look we were really able to start to begin to get staffed up again in the fourth quarter. last few weeks whether from an airline or other restaurants we have been impacted, too. had to shorten hours from time to time, had closures on and off but the team is working so hard. we'll get through it and expect it ispart of the shake shack c culture. we'll get back to taking care of people with normal how shalls but even through this the team is faring well for the challenges they have. >> randy, in terms of delivery what's the balance of orders through your we site and app versus other company's apps? one level fewer fees to pay and then the delivery cost on yourself. >> we are happy to participate in the great third parties we prefer the order on the shack

app. there's a digital transformation we make it easier now to preorder, pick up the food an exciting thing we did this quarter first time ever launched a drive through. one in minnesota and missouri. this is a game changer for us. we'll open up to ten of those this year and driving the format the guest is truly an omnichannel guest. when we get people in the omni channel infrastructure they tend to come more often, spend more and dedicated to the brand you see images of great drive through opening and it is super exciting to see that happen. >> seems pretty covid friendly that unit growth of opening new stores and dropping new footprints is key for the stock

and the growth story is that held back by covid as you look ahead to what 2022 brings >> not really. we met the guidance for this year we opened 26 internationally look at 62 restaurants on top of -- more than 20% unit growth. not a lot of companies in our category doing that. we are in china, korea, mexico still growing in the middle east of course here in the united states and that business both license and domestic company business has continued to come back we expect to accelerate development and have the largest class of shocks ever in this country. 20 to 25 in the various partnerships we have outside of the u.s. when you think about us compared to some of the giants you bring on here we are still pretty small in the realm of things and we feel like we're just getting

started in the new formats and the transformation is an exciting runway and what people have known and bet on for shake shack. >> do you have to think about expanding the menu it is great and kind of limited at the moment. >> that's the idea we do various limited time offers get the black truffle burger maybe try that on the way home tonight. we have fun specials coming with shakes, lemonades and chicken. we love to collaborate with cool chefs from around the country and never want to make it overcomplicated especially through the tough time and slimmed the menu a touch and feel that works best i get the burger, fries and a shake. >> what about investors? i mentioned the stock. it has gotten hit hurt

about 40% off the highs. what do you think investors are missing about the story that you are trying to tell do you think it's the lack of visibility on margins with the labor and food costs rising? >> i think the shack investors who are with us long term understand the story and the score takes a care of itself over time. we'll continue to execute. you have the ups and downs and you can see the market reaction today is another indication of people seeing the potential of the brand, what recovery looks like as things return to normal and people mover about the country normally we are kcht where we'll go and keep delivering a shack burker at a time and pay off for the shareholders. >> good to see you. >> thank you take care. straight ahead, ibm gets a downgrade and google is named a top pick those calls and more when we

take you inside the market zone. watch or listen to us live on the go with the cnbc app we will be right back. -hey, fr, -hey. did you know autotrader lets me shop for cars by monthly payment, so i know what i'll pay before i buy. cool. was that a refrigerator joke? kenan, chill. alright, just stick to making ice. i didn't mean right now!

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plus, zero-dollar commissions for online u.s. listed stocks. [ding] get e*trade and start trading today. never settle with power e*trade. it has powerful, easy-to-use tools to help you find opportunities, 24/7 support when you need answers, plus some of the lowest options in futures contracts prices around. [ding] get e*trade and start trading today. welcome back here's a look what's coming in the second hour of "closing bell." eric johnson made timely market calls of late and out with a big new prediction. the ceo of krispy kreme is talk what he's seeing from customers and the ceo of crocs about the state of the consumer following the guidance and the president

of the world bank to join us with a new warning about global growth action packed second hour of the show but first with just 14 minutes left in the trading dbell we ar in the "closing bell" market moour. mike santoli is here as always let's kick things off. the stocks are often with a volatility start fed chair powell on capitol hill for the reconfirmation hearing weighed in on the fed's plan to tighten monetary policy this year. >> i would expect that this year 2022 will be a year in which we take steps toward normalization. that will involve raising the federal funds rate and perhaps this year depending on the run of things to also see ourselves beginning to allow the balance sheet to shrink. >> mike, i guess the takeaway was that the minutes last week

more hawkish than today but the market's more bouncing just because it decided it was time to bounce. >> yeah. largely i think that's true. we recovered a couple day's worth of selling, especially in the growth areas i think that powell's construction of that response by saying maybe late in the year we let the balance sheet run off seemed less aggressive than the calls for run down and do that i think that the market is geared up to already just presume a level of vigilance on the part of the fed and then the market internal dynamics today is not as much of a zero sum game it is not happening at the expense entirely of the stuff that's been strong already. >> let's bring in virtue investment partner joe taranova.

welcome. what do you make of this now two-day rebound for the market did it just get too over done? >> i think the institutional and hedge fund money beginning in december began to kind of rotate in a defensive way capturing positions in consumer staples. moving away from the emerging growth stocks and that positioning continued. i think basically the market was very short yesterday morning and you are seeing right now a short covering rally and that is very well timed once again, the s&p 500 holds the 100-day moving average and places the market in a great position and will not have that technical breakdown as we move into earnings. so now the fundamentals of earnings can shine forth once again. let's remember what a positive

catalyst those earnings were for the market to reverse the decline from september to the early part of october. >> some of the hardest hit names, peloton working really well today up more than 6% paypal ibm the worst on the dow after getting a downgrade to sell at ubs. seeing near term risk to the company's operating estimates leaving shares quote vulnerable. lowered to 124 from 136. i don't know elevated valuation for ibm i guess it's all relative. >> sara, i think it's more i was pulling for alabama last night but they couldn't execute in the red zone and i think ibm is an example of that in technology they have just had an inability to execute while everyone else in the technology sector is doing it so there's other places

to go looking at value technology i could initiate a position in an oracle or a cisco or a qualcomm they're executing better than ibm and i think this is a company to prove itself over a multiquarter period and haven't done it. >> wedbush naming alphabet a top pick for this year driving a stronger product for advertisers and says google have a stronger product relative to amazon outperformed amazon last year up 65% and amazon up 2% mike, i guess we have seen glimpses of buy the dip trades at the start of this year. that is one to talk about within mega cap growth but so far about the sector rotation than within the sub sectors. >> for the most part up seen within sectors value

beat growth and old media against things like alpha bette. i find it interesting this call. what point in the cycle are we at in terms of the tech platform cycle? buy google for advertising it struck me a little bit like we need a bull case on a core holding that was up 67% last year and yet still doesn't look expensive. this is as good as any i guess. >> that chart, joe, that relative outperformance by google over amazon, do you think that reverses or stick with google >> i tell you personally, i have a position in alphabet i don't have a position in amazon i think the distinction has to do with the capital al case strategy alphabet is buying back the stock. they increased the allocation

strategy trying to emulate the success of apple. i think it is searching for a reasoning to reiterate the affection to alphabet. probably the single most important reason is pull up a chart of alphabet and look how perfectly it held the 200-day moving average yesterday morning a sharp rebound recovery from it technical formation is intact. >> do you fear - >> sorry. >> sorry joe, do you fear the entire mega cap group sees a negative rerating we have seen it in the ark universe parts of tech could it happen to this part of tech, too? >> wilf, that's a great question the answer to that would be to a certain extent it may happen but

there is a put underneath the market for a lot of the mega cap equities let me explain from an asset allocation perspective if you see the risk in treasuries rising and taxable fixed income being challenged for a generation that's older and searching for income you have to stay invested in equities longer. why? because they have the fundamental characteristics that you want from the bond market but it's presented itself in the form of an equity so i think that's the put underneath the market and any corrective behavior met with interest of buying from income investors. >> dechesive now energy the sector up almost 14% for the year let's get to pippa stevens >> hey, sara, a continuation of

the trend from last year with energy leading today up 3% following a jump in oil prices and broad strength in the market upstream players are leading the gains today with services companies also sharply higher. coming to majors exxon at a two-year high and chevron at the highest since july of 2019 bank of america said it's a more rational assessment for the traditional energy stocks with the group relevant again in the eyes of investors. so after years of underperformance investors are giving this sector another look. back to you. >> yeah. getting some love. pippa, thank you mike, the year to date gains on the stocks up 20, 21% on top of last year's gains. what do the valuations look like

they had underperformed so long. >> i think last year was the back from the dead trade and an abandoned group coming into 2021 and you had this huge surge from very underowned levels and now 3% of the market cap weight and closer to 2 i think at the lows and now it seems as if they're valued to essentially move roughly in line with what the commodity does and at this these levels there's a little bit of a migration toward table dividend type stocks and the oil majors might qualify for. it's not hated but it's also not super overvalued and overloved just yet if you believe that oil is kind of in decent shape here seeming more supply constrained and the world is opening up again then that is to me things lining up through the sector. >> joe, did it run up too

quickly, the likes of exxon? >> i don't think it has and i think there's a significant un underinvestment and trying to build positioning here i think the thing to think about here is for the doubters of whether chairman powell is actually going to go ahead with a lot of what has been suggested in the monetary tightening not only from ending asset purchases but the rate hikes and the runoff just look at the price of oil, $81.45. that's telling you the federal reserve is going to have to be hawkish. from a price perspective think about this from january of 2012 through december of 2014 the average price of oil $95 the working oil and gas rig count average is 1800. right now there's only 590 working oil and gas rigs in the

united states. they're just not focused on increasing production but returning capital to share holders and the price of the stock. >> let's get to the intraday market analysis. two minutes left of the trading day. mike >> it's been a broad rally today. it started out on the tentative side and then got an all clear people felt as maybe the recovery going on without them not quite 5 to 1 advancing volume and pretty close. definitely making up for some of the weakness yesterday i would say things brings things back to neutral level. take a look at the extreme growth versus extreme value parents of the s&p 500 pure value, pure growth areas, that's a massive spread over two weeks. right? more than 13 percentage points of performance

narrowing with growth bouncing today but that's a thing to look at and say short term should this relax a little bit and come together or making up for years and years? that's the question. i said it doesn't have to be a zero sum game every day. down below 19. made a little bit of a spike on the chart. above the highs of yesterday so that's all relatively benign, as well. >> we have just one minute left and just off the session highs the session high for the dow 202. up 172 as we stand but that's still hatch a percent of gains it was down 300 in the first few hours of trade nasdaq leads higher. s&p splits the difference up 0.9% only three sectors in the red. utilities meaningfully down.

oil itself is up 4 full percentage points. tech, communication services, and materials all up more than 1% in what is the second day in a row of resounding intraday rallies from the session lows following a torrid start to the year last week s&p 500 closing up nearly 1% ♪ breaking the losing streak welcome back, everyone, to "closing bell. i'm sara eisen with wilfred frost and mike santoli, cnbc seen josh markets commentator. this hour david malpass on the down beat outlook for the global economy and the pulse of the consumer when we are joined by the ceos of krispy kreme and crocs. first up on the markets joe te terranova is still with us

you saw a sign of a rebound. the cryptos, bitcoin chinese internet stocks. the ark innovation fund. clearly bargains out there and dip buyers coming in i think the big ers qgest quests can the market rally on higher interest rates >> i thought the middle of the day jim cramer's tweet perfectly timed talking about the 10-year yield pulling back 1.80 yesterday so a little bit of a lower yield is certainly helping markets if we are going to see a 10-year yield continue to move high esch, break above 1.80 to the 2% level then you see longer duration assets challenged the market is going to rotate to a more qualitative in nature

exposure equity holding. >> mike, does the market welcome a day when yields at least stabilize? is that a factor do you think? >> sure. generally the market can always make the peace with a higher yield level coming for the right reasons with economic recovery normalizing rates and not too quick. all those things working together yes that being said i'm not going to kind of go crazy stretching for reasons why the s&p 500 was able to licft back to levels of a few months ago it bounced when it probably had to and should have to keep it contained and beyond that i think the yield stuff coop rated and not sure it was the swing factor. >> home builders stocks rebounding today and a rough start to the year. the group down 6% in 2022. joining us is portfolio manager

aaron brown. great to have you join us. interesting to get this take in terms of a sector to be concerned about. tell us why. >> the builders have been on a tear and outper fortuformed thep up 40% on an absolute basis and benefited a lot from really easy monotash policy and very low mortgage rates and i think the tide's turning as we start to see the federal reserve start to increase interest rates and more importantly pers for the builders looking to the back half of the year and see a balance sheet to unwind back to the federal reserve you will start to see the home builders underperform over the coming quarters and year ahead. if you reflect back on the fed starting to increase interest rates in 2014, '15, '16, '17 the

home homebuilders did okay until mortgage rates were back up and i think we come into that period much faster this time around as jerome powell highlighted today than the last period of balance sheet unwind so as a result of that i think you will see a lot more sensitivity to the homebuilders with respect to mortgage rates and for that reason the fact they did so well and the entire street right now is bullish in the outlook for homebuild eers think we have a bearish view on them. >> what about in the tech space given the pullback any areas you recommend people buy? >> i think tech is oversold. there's a narrative that growth can't do well where the fed is raising rates and because tech

is seen as a long duration asset it can't do well i beg to differ with that. i think they're oversold secondarily tech right now particularly if you pick the right spots do -- are high quality stocks i in particular like the semiconductors which i think have significant pricing power moving through 2022. there still is a shortage of supply on a cyclical and secular base i seeing more chips in everything cars, the household appliances, every sort of -- anything the consumer touches i think that as a result of that shortages remain constrained for the supply chain specifically with regards to semiconductors it's a bull oish outlook. >> want to pivot to breaking news on citi which is part of new kroemplt frazier's refresh

announcing to exit the bulk of its mexico business. that means it's xitding the consumer small business and middle market businesses in mexico essentially the commercial business there keeping its icb business but the big one there is consumer business in mexico and will mean that it's only consumer retail business is in the u.s we have the announcement what it was doing in asia and europe last year. now adding to that what it is doing with mexico and a decent sized part of the business staying committed to retail in the u.s. though and saying that they are still confident about mexico overall the, the trajectory of the economy and the country and the icg business and exiting a part of the business there in mexico equating to 3.5 billion in revenue in the first three quarters of last year.

1.2 billion in profit. about $44 billion of assets. so this exit seems like an outright sale same as with the asia exit last year and explore opportunities and almost certainly would find a buyer for the business slightly more contained rather than across multiple regions and successful in a decent and growing economy. part of this ongoing refresh from citi and interesting to see the price they get from it and will do with it. they have an investor day coming up but seeing the stock jump after hours on the news. >> no doubt that it is an attractive business for somebody where it fits. it was a big bet it had been a priority for some number of years. i think that the reality is citi

in terms of the company, valuation is not really giving full credit for alls aspects of that global business and finding out the value to surface that's not being reflected in the margt valuation. >> yeah. i mean - >> you hear investors come on and say they need them to focus and parts of the business not yielding the return but using capital and this part of the business on average had 4 billion of capital allocated to it and that this type of slimming down is welcomed and i'm sure it probably will be in the short term the question medium to long term is whether you can have a slightly more piecemeal approach to global banking to lever jpmorgan as the big player that does a bit of everything everywhere citi focusing down hsbc doing the same. deutsche bank doing the same the days of that multiple global

pl players in all parents ts of th business is not there. we'll see if it's a benefit or if they have to continue to slim down but the stock reacting well as it has year to date, joe terranova. all the banks did well citi in particular. >> yeah. i think you're correct in your analysis you wonder this is a process that's been for the better part of the decade where citi has been reducing the size of the global footprint but you ultimately wonder now if they reduced it so significantly you question whether they don't have that global footprint and the ability to expand as the global economy expands and increase

i personally own bank of america. that's the one with the highest sensitivity to interest rates. i'm incredibly excited about earnings and going to start on friday morning citi, wells, jpmorgan. hearing from the banks and let's h hope that the fundamentals factor into where the market will go and i suspect it would be a potential positive catalyst. >> erin, how about the banks selling the homebuilders and going for the chip stocks? where do the banks fit in with the new dynamic we face? >> i think fourth quarter earnings will be strong for the banks. probably have more room to run with respect to the banks but keep in mind as we move into the first quarter of the year the comps will get more challenging.

particularly the broker deal irs had a good year last year aen the comps are difficult in the first half to the second half of the year so with respect to the banks i think they're a short term buy but be cautious going through the latter half of 2022. >> erin brown, joe terranova, thank you both for joining us today. good to see you. we are just getting started on the second hour of "closing bell." it was a big run-up last year and eric john ston from cantor fitzgerald was calling that. bank of america with a sweet treat for krispy kreme investors. coming up the ceo on the outlook grth and how inflation is hitting the bottom line. for your full financial picture. with the right balance of risk and reward.

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julia boorstin has it. >> tony shu of doordash is elected to the board of directors. getting food and more from restaurants and small businesses saying i have thought it's great to have great tech leaders and tony with experience running a tech company and solving problems this comes as meta fortunatelierly known as facebook pushes bringing to commerce to the platform back to you. >> thank you. stocks rebounded today the nasdaq up more than 1.4 pshs and nearly 7% below the all-time high joining us now is eric johnston. thank you for joining us looking through the recent notes i guess you weren't surprised by

the early year pullback in general. give us your take now. still expect further pullback? >> i do. i think we'll see a material sell-off over six to seven weeks and four main reasons why i think this is going to happen. the first one is this is a historic change in monetary policy that no one has seen before the fed bought $4 trillion of assets 1.3 trillion of assets over the last year. rates pinned at zero. the treasury pulled 1.6 trillion from the deposits at the fed this is all completely reversed this year and although the market is aware of it because this has never happened before to this magnitude is market is unaware how equities handle it we think it will be negative equity exposures right now globally are at historic highs

looking at allocations in the u.s. it's high short interest is at multi-year lows if you look at margin debt, how much investors borrow to buy more stock increased by 80% in the last 2 years so we think that when the market sells off there won't be an increment alibier because they're full with yields higher the pena argument will start to fade and then looking for -- seeing early signs that the consumer who's really been incredibly powerful part of the economic rebound is going to start to fade over the coming months for a number of reasons. for the reasons we think the sell-off is material and gain steam as the momentum comes out of the market. >> so what do you make of the

bounce essentially the s&p got to 5% from the recent highs. the nasdaq comp 10% from the recent highs and bounced aggressively does that make you lose confidence in your call that we're go iing to see further weakness >> risk levels haven't taken down a fair amount so you will get the short term bounces a thing in front of cpi tomorrow is a view in the market that the whisper number is very high and that this could be a better than feared number so i think that's part of the rally. getting a pop in the morning there will be a sell event but no i think there's going to be volatility likely not going to be a straight line down and really i think this whole year is really going to be a trader's market. >> so the flip side just to play

devil's advocate is the economy is strong in the u.s we can handle a few little 25 basis point rate hikes off of of 0 especially when you have this kind of strength that we have not seen in years and that the fed can engineer a so-called soft landing and something jamie dimon talked about on cnbc yesterday and doesn't sound as turbulent for the market. >> i think it's a fair point a big difference in this cycle is that the fed policy that we've seen has really caused a mass speculation that's gone on in the market and causedernings multiples to increase and could have a situation where the economy does fine and the sp speculative assets that have been inflated by the fed is

where it could come out. not necessarily the economy. but one thing is that if urn to get a downturn in the economy that will affect confidence for the consumer because the increase in net worth of crypto and equities is a powerful force to the upside and could have the same powerful reverse on the downside. >> thank you for joining us to talk through it. >> thank you. up next, krispy kreme ceo on the labor shortage and whether consumers are cutting back on spending world bank president out with a new warning about the global growth outlook details in a first on cnbc interview.

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shares of krispy kreme higher by 2.5% after bank of america initiated the stock with a buy rating citing the product offering, ability to drive returns and growth opportunities in the u.s. and canada the bullish outlook follows krispy kreme reaffirming the

2021 guidance earlier today. joining us is krispy kreme president and ceo. thank you for joining us. >> good afternoon. happy new year i think we were supposed to do this live in orlando but we are back on the zoom or webex. >> it has indeed but it is great to have you with us, mike. i wanted to start where we have with a number of other consumer ceos today but what you see on the inflation front with raw materials and labor costs. >> yeah. from raw materials, our top three items comprise around 50% of the cogs. just to give you an idea that's 10% of the total sales so we are able to manage through that we have a view on that for the year so we are pretty comfortable how to do that in terms of labor we are able to attract labor into krispy kreme

and fortunate. there's almost three applicants for every opening there and as we run the new omni channel model driving a fresh experience 10,000 points of action around the world and it is working. >> we mentioned there the prospect for u.s. and canada expansion that the bank of america note spoke about and you mentioned the omni channel points talk us through the plans for u.s., north american expansion and which channel to focus on most of all. >> so again, in the u.s. we shall about 300 donut shops. the hot light shots and built and changed the business model to follow customers where they are. they can go from fresh urban locations in the u.s. and unlocks delivery and then the u.s. we have about 5,000 points

of access or spokes which is the convenience and grocery store and the last year we can do it now so it's fresh daily. 381 hot light shops and run about 10,000 points of access so we see the ability of growing the points of access about 1,000 points or 10% a year we see that opportunity. we can see that driving in the u.s. and international we are a global company and more than 50% of the sales happen outside the united states. >> people don't realize because it's a new ipo it was an old oirp and a really old company. 84 years old can you continue to post doesn't digit organic growth >> if you look at what we perform it does drive the business to get fresh donuts

we posted the earnings, at least announced earnings in the last couple weeks of december and upped the guidance and will be at the top end of the guidance we laid out a track that has a 9 to 11% growth organically. 18 to 22 we believe the biggest driver will be the points of access as we get to those fresh donut shops and opening up within the grocer and convenience business, leveraging the donut shops out there, 381 hot light shops and then follow the customer we see the global opportunity. international business is absolutely just doing incredible now we are in a position, we know what works on a global basis and can start opening up three new countries per year, as well. >> it's -- you mentioned the people weren't aware of the international sales.

moving here i was surprised. it is easier to get a krispy kreme in london than new york city itself. maybe i'm exaggerating a bit mike, my question was going to be about the delivery craze that's taken off due to all sorts of apps. do you miss out on that a little bit given the type of food you sell and have to expand more into fuller meals to make the most of that or not? >> no. you know, we really see people continue to look for a sweet treat. now delivery up to 17% of the retail sales and in fact in some of the countries it's up to 25 pshs people use the donut experience as a desert, breakfast item or a sweet break. we maximize around specialty occasion halloweens we are a sweet treat and tend to

really pat earn around the sweet treat occasions are, the holiday, valentine's day, mother's day, easter it is an opportunity to capture that people are always going to want to do gifting and occasions. we like where krispy kreme sits in the space of sweet treats and the goal is to be one of the most loved brands in the world and making progress on that. >> you have fans in this household. thank you for joining us >> i really appreciate it. i thank the krispy kremers for the job they did in 2021 and beyond thank you very much for having me on the show appreciate it. whe have breaking news meg? >> med kash and medicaid services with a coverage

decision or a draft decision on whether to cover the alzheimer's drug that biogen has. and what they have come out with a restrictive coverage suggestion to pay for this drug for patients in clinical trials. certain clinical trials and seeing biogen down on this news affects eli lilly with a similar drug in clinical trials here the center saying that these drugs are not covered for patients outside of clinical trials that they detail here in the announcement we expect an update from a media call in a few minutes and will try to get more context. this is a controversial drug and space the entire time and this coming in a lot worse than investors expected

biogen continuing the fall there. >> thank you for a -- time for a news update shepard smith has it. >> thank you president biden's in atlanta speaking at this moment calling the city the cradle of civil rights and making the case for passing civil rights legislation and to reform the filibuster to get it done. senate democrats set next monday as a deadline to pass the legislation or revise the filibuster rules. kids in chicago back to school tomorrow. they have been home for five days while they battled over covid protocols. there's a deal but details have not been announced. a close call in philadelphia this afternoon a medivac helicopter crashed in a neighborhood happening in upper darby wers of the city the flight with an infant patient, that baby, a nurse and two crew members somehow

survived none of the injuries life threatening. the police chief on scene calling it a miracle now calls for prime minister johnson to resign. that and the rest of the day's happenings on the news 7:00 eastern cnbc. back to you. >> i'm delighted you're covering it it is obviously the biggest story back home. it's not getting much coverage here. >> he had a run of late. >> of parties, he has it seems. >> yes >> against all the rules and regs i look forward to your coverage of that. world bank president on how inflation and the omicron covid variant increase the risk of a hard economic landing. crocs is a big winner in the last year. shares down 30% since november

the company ceo on whether the new record revenue outlook will turn the stock around. new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today.

fed chair powell testifying

before the senate banking committee today. here's what he said about how the fed to deal with rising inflation. >>if we see inflation persisting at high levels longer than expected then we will -- if we have to raise interest rates more over time we will we will use our tools to get inflation back. >> the world bank issuing a grim forecast today seeing a global slowdown this year joining us now for a first on cnbc interview is world bank president david malpass. how tied to the inflation story and to what powell is planning to do this year is your grim forecast for the global economy? >> hi, sara. the grimness is the developing countries have a hard time in this environment, both the inflation and the prospect of interest rart hikes puts a burden on them

they're not getting the new investment they need to create jobs and means shortages we are seeing them in the u.s. but it is worse abroad. >> 4.1% growth this year you see for the global economy 3.2% in 2023 which is still not bad it is still growth which areas of the world are you most concerned about >> that's true any real growth is good except the population is going up rapidly and developing countries so in many developing countries so looking at the per capita income they need more growth than that and it's a two tiered global economy where the u.s. and china are doing and even now japan somewhat producing growth and not much left over so the big challenge is the people in developing countries and especially the poorer ones are left further behind.

>> does raising rates in the developed world hurt that further or a sign that growth in the developed world, excuse me, is strong which should help the developing world accordingly >> it puts pressure on the financial systems in the emerging markets we already see that in a third of the countries have already had to themselves raise interest rates so that's a credit tightening going on in a region of the world that already didn't have enough credit so the challenge here is how do you reduce this inequality that's so prevalent in the world with most of the assets in wealth going to people in advanced economies and the other people elsewhere not catching up that puts strain on refugees, on governments themselves so we are seeing pressure throughout the

developing world from inflation, interest rate hikes, slow growth and the prospect that it is really not going to improve very much in 2022 i'll mention education where kids are falling behind because in some parts of the world schools are still closed which the data is crystal clear. they go backwards in terms of literacy. >> it's a huge problem, president. how do you propose we deal with it in the u.s. at least coming to inflation fighting the mantra is the fed has to do something about it it's getting the levels we haven't seen in decades. >> since 2008 there's a sea change in both fiscal policy now much bigger fiscal deficits as a percentage gdp. that drains resources from the world because the u.s. government is just borrowing

constantly and true also of european and japan on the monetary policy side it means that the central banks are doing a huge amount of borrowing from the commercial bank system to target a certain part of the credit market, the long end of the market that's the end that's most used by corporates, governments and big business and that just doesn't leave space for the small business growth and credit that's needed. think about the supply chain problem. it needs to be solved by small businesses doing the trucking, the distribution, the innovation that can get us back to a full supply chain and it's not happening right now under current conditions and those are going to get i think tighter. >> i read your report and it

looks like you guys think at the world bank that the inflation story is going to be transitory. i think you used that word which is kind of a forbidden word since the fed is wrong on it and since nobody expected it to last this long. where do you see the path of inflation for this year in the advanced economies like the u.s. >> it may persist if the supply chain doesn't get improved and it also is as we think about transitory some countries will see inflation peak and come down but the bigger problem is just the pressure all yearlong on -- from the inflation rate, it directly hurts the poor and also as interest rates go through that has an unfavorable impact i think that's clearly stated in the report anyway, as we project out, the critical thing is to recognize that we are in this unchartered

territory on both fiscal and monetary policy. we never had a situation where there's giant amounts of long term assets and it puts the bias into the capital allocation in the world. >> will have a lot to talk about at the g20 meetings. thank you. >> thank you. up next, why there could be signs of optimism in earnings season later the ceo of crocs on whether casual apparel will still be as popular post-pandemic. we'll be right back.

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yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq . welcome back let's get over to mike for a look at earnings forecast for q4. >> the forecasts are holding up right now. supposed to be based on the consensus a sequential decline from third quarter but third quarter was a huge beat. this from b of a strategy group shows that the typical path of earnings folk for this quarter would have shown that they get down scaled over the course of the quarter itself 3 or 4% you expect to have them revised lower and then companies tend to beat so we have been resilient in terms of the fourth quarter for the s&p 500 and maybe there's less room to beat and every quarter last year companies beat by so much

perhaps analysts are not going to lower the numbers to have them beat by so much and see where valuations sit some adjustment here s&p 500 steadily going down. but it's the nasdaq 100 where you've got to the huge lofty levels and it's come down and still in that upper range that you never saw before 2020 but the equal weighted s&p and blending and getting rid of the large cap effect is down to actually below where we got to in this peak right here in early 2018 if there's further compression to happen maybe it will come to bear on the largest companies that got the big premiums for the long term growth rates in recent years. >> yeah. nasdaq 100 might have some room there. thank you after the break crocs betting the consumer has more

spending to do could rising covid concerns impact the forecast? we'll discuss when "closing bell" comes right back

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crocs announcing this week it expects record annual revenue growth of 57%. the company presenting at the consumer conference today and the ceo joins us now welcome back, andrew your forecast, the adjustment on revenues the same day as lululemon. what are you seeing that they are not? >> yeah. so i think one thing we are seeing is very strong consumer demand and seeing great traffic, large traffic increases to the stores, to the websites and to wholesale partners we saw strong sellouts lulu commented on difficulty keeping the stores open. our stores are smaller and easier to staff with an easier operational challenge but we are seeing strong demand for the brand, all through the year.

67% growth is a huge number. and as we look forward into '22 we are really excited about both the growth prospects of crocs. 20% growth rate and made an acquisition of hey dude and super excited about excited ab, too. >> the stock reflected everything you talked about up 70% of the last year i guess the question is, how do you run with that momentum you've nailed some of the partnerships and the collaborations with justin bieber and oughts. how do you keep it cool, in other words? white house crocs has gone through waves. >> i think that's the thing. we got to keep it cool been we keep it cool, we have to stay focused on what are the consumer drivers what is the consumer looking for? i think the consumer on a local effort is looking for comfort,

sustainability, easy on and off and working dim tally. we're looking to lead into all of those trends, on top of that, we're trying to inspire them with our collaborations, our social marketing, with some celebrityen doorsments so i think you got to be, have a strong foundation with where the sil consumer is and is going whether they're long-term trend. they're not going away they may have been accelerated after the pandemic, nobody is going to stop shopping digitally. nobody is going to reject personalization i don't think even as you know the consumer gets back to work and maybe covid ends at some point >> it's interesting, andrew, the selection of crocs you have behind you and which the celebrity endorsements have been done well for you. i wonder how much of the plain colored crocs do relative to the newer versions you've brought

around in recent years >> so, that's a great question, w wilford, the majority are on the vanilla crocs, the classic clog chassis that's seemed to liberate us. if we can make the classic clog special, the consumer will be interested in buying what we call the core ordinary colors. those have driven a huge part of the business >> i haven't been able to get my hands on the lightning mcqueen toddler crocs. i don't know if it was me or a hot item are you seeing shortages of materials and are you able to meet demand with the production constraints that we're seeing across the board right now in? yeah generally, yes there are shortages on isolated products, absolutely but as we look at the trajectory during 2021, we got better and

better in terms of being in stock close and our channels are putting our wholesalers of being in stock i think one of the reasons we had a successful holiday season is we were in stock. not every single item. there are obviously some misses. but in general, we had good stock levels when consumer was out there, especially in the two-to-three weeks before christmas when nay have to make that purchase, we were in stock and they bought the product. >> finally on that acquisition you mentioned. i want to ask about the hay dude acquisition quickly, do you think wall street understands it you put some outdated numbers out today on that? >> i'm not sure they fully understand the year. one of the reasons is, look, this is what we think will be a $700 million brand this year, right, in 2022 that's our guidance. we've issued 700 to 750 as a revenue. it's a top ten global footwear

brand. yet the sales are concentrated in the mid-west, texas and the south. a lot of wall street or investment professionals tend to live on the coasts really haven't heard of it and don't see it around. so they're a little mystified. i think they're trying to put together the price we pay, the size of the brand and the fit with crocs we as a company are super excited. we think it's a great fit with us as a company and with the consumers that we're reaching. we think we voided at a good price. we think it's highly profitable. it's growing very fast and has a long runway. so we think this will play out extraordinarily well i don't think the broader investment community has fully understood or digested it yet. i'm sure they will have the time. >> andrew, thank you so much for joining us we do appreciate it. >> okay. thank you. >> up 3% today up next, slashing fees one of the nation's top banks unveiling the new policy for the

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welcome back bank of america announcing significant changes to its overdraft fees, reducing the main free from $35 to $10. it will also remove new fees for newspaper sufficient funds, which essentially is levied when someone bounces a check. this is the latest step in what they describe as another decades-long move to reduce revenues they say the revenues will be 97% lower than they were back in 2009 well, there has been an increased pace and scale or announcements from bank of america and its peers in recent months, due to both political pressure and competitive threats from various then texts that have various fees for consumers. for example, in december, j.p. morgan chase announced their own measures, which included limiting there return item fee, again the bouncing the check fee. they expanded their overdrop cushion from $50 to twhere a

charge gets triggered. they ultimately play into the hasn't hands of the bicker banks to the smaller banks to invest heavily into tech does too, mike clearly, they have the scale to take this rather than the smaller banks which have less scale to do so >> absolutely. no, it's a great point it showed us both masters a little bit here. clearly the neobanks are making these consumer friendly proposition, maybe too consumer friendly and a longer suspended point of view. it's become not that much of a big revenue stream at some of the bigger banks relative to the rest of it it's not too much of a hit, due politically sort of right thing as well. >> we got some bank share prices down we can switch to get citigroup off the rouse, to see what it's dock after the news, it's slij down the international foot print further and remain as good as global player everywhere,

exiting now mexico consumer business as they have been doing across asia in some markets in europe, ahead of which was announced last year. up about a persont in after hours off bad news,which will be interesting to larry more about within they report their earnings, which is on friday but we are out of time today on closing bell, thanks so much for watching. "fast money" which starts with sarah starts now. >> tonight on "fast," we are trading the tech takeoff the big guys like amazon, meta, apple, all ripping higher while multiple names, peloton, docusign, is the tech on shake shack, sizzling hot, the stock 13%. i just spoke with the company's ceo. what he says about the future that has investors licking their lips later, we have a guest trader, taking the mound, why she thinks this regional