all season put a ton of exertion on the body but with the heart rate we saw that a lower heart rate often on the field versus watching the end of the game with the team on the field. >> totally understand. >> he has ice in the veins and feels when he's in control. >> he had a 170 heart rate i get that walking up a flight of stairs. thank you so much for the data we hope to see you again soon. >> thank you. >> "power lunch" starts right now. ♪ wonder if that device predicted the outcome, kelly if it can do that, sign me up! all right, everybody welcome to "power lunch. value hunting. opportunities are emerging among the market volatility and the pro went looking for bargains

and has names to consider. the power run down the topic is streaming we'll dive into the stake in netflix, spotify's decision to side with joe roggin and comcast's decision to double spending on content. apple, of course, on deck. earnings due after the bell. the stakes are high. apple's results could be a catalyst for the tech sector a bounce we'll find out. >> thank you hi, everybody. can the whoop predict this market close good luck. the dow had a 600-point gape this morning we were negative a moment ago. some big tech names are trying to hold on microsoft and amazon are both in the green by more than 1%. and treasury yields have

reversed lower with the stock market back to 179 why almost where we were before the fed yesterday. pulling down jpmorgan and goldman. similar story for oil. the stocks which have been a place investors are going still off the session highs but have some gains and we begin this hour with the fed. the markets are pricing in five rate hikes but a regime lacks forward guidance and could lead to more volatility steve lies marn is here to explain. steve? >> speeding up and increasing the outlook for fed rate hikes where the fed yesterday signaled a rate increase in march while the market had priced in four quarterly hikes this year fed funds futures see a probability of three in march, a

fourth one in september. a fifth one priced in for december based on that pricing the funds rate rising from 0 in march, spend the summer around 90 and end up in 1.25 to 1.5 by december and still below the 1.5 to 1.75 raeng before the pandemic the big change is the withdrawal of forward guidance offering the markets assurances of low rates since the pandemic started how much the fed does now likely tied to the data than long term guidance and likely means volatility for stocks. for stocks it is the return of alpha instead of levered beta. maybe we can get chairman powell to wear a whoop. >> wouldn't that be nice like the briefcase indicator with allen greenspan

you think this is a real signal. like last time >> yeah. i think they're not saying because they don't know. i think there's two levers of policy, really three rates, balance sheet and gui guidance if they knew they would give us the guidance i think what powell was saying, he didn't say four or five but said it's all a possibility out there. the real alpha here might be an economic forecasting not stock picking. who has the best forecast for when inflation goes down that said very quickly this. i think that even if inflation does come down quickly i think the fed is probably still going to do three or four rate hikes to normalize rates. >> all right let me follow up there wouldn't you say basically that the fed has been highly

communicative and transparent up until now? i don't think anybody can be confused. >> absolutely. yeah, yeah here's the thing the reason the fed is communicative is not because it likes to talk necessarily. >> i think some of them do. >> some of them. fair enough. as an institution they talk because they believe it leads to better policy. with something that bernanke introduced and greenspan started it bernanke talks about communication leads to better pricing. 70 bases points added to the 2-year yield without the fed doing anything i think the fed would tell us if they knew and value in guiding the market that way. i don't go there is. i think probably pretty safe betting on four or five rate hikes this year and i don't think the fed knows the

frequency yet or the amount of the balance sheet runoff and in the 50 to 100 billion a month is likely. >> you will remember greenspan i think he tried to speak and communicate but he was anything but trance psparent, man he was as opaque as they come, right? >> right he introduced the statement. right? that was under him to put out the statement. he did that and it is interesting. i was going back and reading the old statements trying to figure out how he communicated. >> could you understand them >> yeah. but he used the phrase measured pace or gradual and people got it more or less and worked out okay. >> thank you >> pleasure. there's opportunities for investors it says. the way to grow is to companies with growing revenue and cash

flow this is the managing partner at dcla and a msnbc contributor are you suggesting that earnings are less important tharn revenue and cash flow? >> no. i think earnings are really important but the emphasis is who will have positive cash flow and revenue growth in the last couple years investors -- they gave somebody a pass that's great investing in the business. what you look at are you truly having a return on capital invested going to return cash back to shareholders by buybacks or difr did he understand or increasing the business that change is coming with the conversation with steve because interest rates are going to be moving so you have to give an option to say do i want do go back to the bond market or companies with true cash flow

and not just pie in the sky? we have something out there. >> how careful does one need to be in analyzing revenues to separate what is really organic or growing revenues from simple inflation? >> so that's a really good point. taking an example like a delta so delta was cash flow positive before the pandemic. what they have done is said, hey, we won't increase capacity but change the mix within our plane so that you are going to be paying more for premium, business and less economy seats and saying we'll partner with other airlines and see real organic growth on a company with paying down debt and earnings. >> they will sliver the pricing so that if you want to bring the

legs on board you pay extra, right? >> for the legs and for that drink and the bag. that's just going to be a permanent shift. >> continue. i'm sorry. >> no. a reason i like delta. >> all right >> cash flow, growth, organic growth, what will you look for look at uber they have shed all their businesses thatare not cash flow positive. now they're in three main businesses two of which are the majority which is mobility and delivery they have a great fly wheel. one app to use a secular change in how people are transported and having food and now you have a cyclical growth behind it they can have pricing power with

different choices as to what you want to use coming to mobility the company's focusing on cash flow they have an analyst meeting on february 10. this is a misunderstood stock and will start to trade in cash flow and earnings growth and see a company that has a true technology advantage over many com competitors. >> i agree with you. there's many months in the pandemic i didn't use uber and coming back to uber i noticed one thing. and it was that the prices were higher used to lose money on practically every ride but i think they make money on most rides. they had that brand power. they were the go-to app, man. >> and if you look at kind of where we are going, we are in a hybrid world people are less dependent on the

cars once they start to travel they use more uber to go to the airports and become part of the life talking about it it was an option but it's much more of a secular shift and if you have pricing and lower barriers to entry, they've done a good job creating a mote and with pricing to it it's a great balance sheet. i think these things are all tailwinds for uber and stock down more than 50% over 12 months my whoop is also - >> you got a whoop. >> the heart rate goes up. >> he got a whoop? >> heart rate goes up a lot with me and kelly, right? thumps, thumps. >> all the time. all the the time. >> ice in the blood like mahomes. >> i know when he is looking at a 3-foot putt calm as can be >> no. that's when it goes up, tyler.

much more calm doing this than a putt. >> appreciate it. the ceo of raymond james to talk about the fed, yields a strong quarter the stock's up 2.5%. the hedge fund behind the gamestop trade says this will be a good year for stock pickers. he spoke to cnbc to reveal what he is buying now don't go anywhere.

welcome back to "power lunch. let's take a look at where the markets stand right now. 63 points higher on the industrial a yo-yo session. the s&p 500 a modest loss down a fifth of a percent maybe a sixthth. nasdaq composite often at 13464. it's been a week. >> topsy-turvy. >> it's going to be one of the worst januaries ever. >> ever. >> ever. >> depending on how much time? a couple trading sessions. tesla weighing on the nasdaq today but the best performer in the s&p look at service now which did post earnings and showed strong billings growth. best since 2018. a lot of traders pointing to results of microsoft and then

service now to dispel the idea that software is facing a poths-pandemic hangover like we have seen with netflix and peloton. there's the bright spot tofd apple after the bell. >> always -- >> key. >> always, always interesting. never can predict and more on apple coming up. seema mody as a market flash >> i want to draw attention to shares of carnival lower on some new comments from the company on the impact of omicron on sailing saying that in the beginning of the fiscal year we have experienced an impact on bookings for the near term sailings resulting from an increase in pre-travel covid positive tests and challenges in the availability of travelers getting pre-travel tests seeing a dampening of bookings activity for the second half of 2022 relative to 2019 clearly the impact of omicron

having an effect on the sector clearly had some challenges overall since the on set of the pandemic and the stock prices and royal caribbean and norwegian lower at this hour. >> thank you very much. a year ago today gamestop hit a record closing high of $347 seems like a short time ago. maybe not if you're a gamestop holder right now $347 is 95 under $100 some people made a killing others got killed. hearing from a hedge fund that made a killing and what they think of the markets right now look at the nasdaq but a lot could change it has been doing just that in the last two hours of trade. stay with us on "power lchun."

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ordering pentagon officials to step up efforts to prevent civilian deaths and stressing the protection of innocent civilians is success to the operations the newspaper published investigations into cover-ups of air strikes that killed civilians jirkts a man and a teen will be held in the shooting death of 58-year-old girl walking with her mother in chicago. the suspect showed a disregard for human life and police say the teen fired at a rival gang member and as a major snowstorm approaches new york stock exchange towns say they don't have trucks and drivers for the plows and franklin, massachusetts, the public works department offering as much as $200 an hour tyler, the labor shortage strikes again. >> why don't we just rent a

truck and drive up there >> while the wage sounds very interesting, i don't do snow. >> don't do snow. >> i'll hold it down here. >> i don't do snow. >> i'm from philly but not used to the new england winters. >> next time. >> maybe. best performing hedge fund due in part to the winning bette on gamestop. the fund no longer owns the king of the memes but is loading up on other names richard spoke with leslie picker about what hess buying now and why he calls this a good year to be a stock picker. leslie >> that's right. he said an indicator they looked at in taking a long position in gamestop back in september 2020 was the unprecedentedly high short interest in the name and

asked him the flip side and worried on a short squeeze by a short position in the current environment. here's what he said. >> short squeezes have always been a risk. certainly a much bigger risk last year. it will be a good year for stock pickers to differentiate therms on the long and short side. >> he shared some places he sees opportunities on the long side excited by names in the rapid testing space. his belief is that the market is undervaluing the dur kt of at-home testing and likes capri holdings with luxury brands. he thinks this is a value play relative to the individual brands' growth prospects and bullish on energy, specifically canadian energy. his hometown in montreal

you can watch the whole sbir view and subscribe to the newsletter at delivering alpha.com. guys >> i am a skeptic always, leslie, when people say it will be a great year for stock pickers because as a group stock pickers don't usually outperform the broad indexes. some do and he may be one of them who does that but it's -- right? you're sigh leapt. have i brought you to a -- >> no, no. >> dumbfoundedness >> no. you're spot on stock pickers have not outperformed the market, especially over the laths decade or so by and large people are saying there should be more dispersion in stocks once the fed hikes interest rates. that should allow for more

fundamental analysis to take front and center in terms of returns. we have been hearing this for a long time and seeing significant pullbacks that's not necessarily been the case. however we'll see if 2022 is any different. time will tell. >> for pickers like you i'm in favor of a good year. >> thank you i appreciate that. >> thank you >> thank you, tyler. take a look at shares of raymond james. they reported record quarterly results. the fed's policy path could be a game changer paul riley is ceo. welcome. congratulations. investment banking was strong but i start on the yield curve because what we see is a little bit worrisome and last hour we spoke with an investor saying

that's specifically whythere could be pressure on the financials what would you say about the concerns >> it depends on where you are great to be here, kelly. we had a great year with record assets and record every metric going forward but also interest rate sensitive so we said that 100 basis point move is $560 million kind of uptick to earnings banks that are floating and have fundamental with the spread and many will do very well with the rates movinging up the curve you worry about the long term play and the fixed income markets and things like that but in terms of our space the private client group it would be a big tailwind and the question is longer term what will happen to the market. >> still allowing you to make

money if that spread is narrow right now. let's talk about the bread and butter butter deal flows are you facing a lot higher expenses because of the very high bonuses of bankers earning this year? >> the bankers earned more money when year deservedly but the comp ratio is down if you look at the comp to refr knew the bankers are less expensive than the wealth managers why it is variable. it's not revenue the pay goes way down it is a good thing and the backlog is great is the other good news after the record last year and then another record quarter. the backlog of business looks very, very strong right now. >> coming to the end of what is a rough january for equity investors what are you looking

forward to as the year plays out in both the economy and the growth very good growth last year and slowing clearly. theeconomy the market one could say was getting ahead of itself. what do you think this year as you look forward >> it is always hard to predict especially the short term future the question like the advisers as they manage the clients' expectations is look to the long term to me rates are going up but going up from historical lows. in fact in germany they turned from negative to positive. that's how low in 200-year lows in the uk. rates are going up i remind people that my first mortgage was 9 pistons on the way to -- 9% going to 12%. very lo fundamentally and for most corporations the 10-year moves up another 100 bases

points they'll be fine they'll finance cheaply. the market's continued for another four years i look at the market there's inflation but there's more supply. there's more demand than supply and part is inventory. we have low unemployment but we still have jobs that can't be filled because we are looking for more people in the workforce. to me that will drive the economy and be choppier and will be more variants but i expect that this year will be a pretty good year for equities. >> a final question if i might do investors care or should they care that putin appears to want to reassemble the soviet union >> any economic instability, markets don't like instability individuals don't like instability. a skirmish will create volatility and more importantly

more world instability what happens if something happens there and taiwan and something happens in -- what does that mean for the world order, stability, trade? that's the real concern. >> yeah. >> peace and harmony do well for equity markets. >> yes thank you very much. congratulations on thegood results. paul riley of raymond james. ahead on "power lunch," we fade into the final 90 minutes of trading the dow is up more than 600ality the highs. apple is set to report after the bell that could also whipsaw sentiment around quickly shares down about half a percent into the results we will have everything you need to know about e po nt thrertexon "power lunch." you want your data to be protected and secured. and your customers want seamless and easy. with ibm, you can do both.

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we want to get you caught up on stocks, bonds, markets generally. commodities. take a look at what to expect from apple reporting later this afternoon. let's begin with bob pisani on stocks hi, bob. >> hello there, tyler. we are at the session lows for the day. i want to show you problems. we have had problems right from

the open semiconductors have been an issue throughout the day a significant source of weakness look at teradyne they were talking about supply chain restraints lam research the same thing. guiding lower on guidance. you can see the affect on the other semiconductor area this goes down generally you have problems in the tech sector and then energy started positive oil at a multi year high and then off the highs in the middle of the day the stocks were at new highs all of them went straight down after that dramatically kind of maybe overbought a few sectors overbought maybe a pullback and caught people by surprise a midday decline. industrials, some problems in the beginning with industrials

textron is a big global industrial big in the aviation business with disappointing numbers and guidance that was a surprise to the street because they with re respect -- weren't expecting those numbers from them. dover down 3%. had surprises on the downside and then confusion on supply chains and raising pries some successful and some not if you take a look at for example dow, inc. why they raised prices 39%. whirlpool tried but costs equalling them you see confusion on supply chain and the ability to raise prices >> thank you yields are falling and it's not the fed we're focused on but the gdp report, rick. >> absolutely. whether we brought that out at

8:30 eastern it was a whopper. 6.9% it was up 5.7% for all of 2021 that is huge but here's the problem the price index deflator is 6.9% 40-year high what is that actually? that's the adjustment made between nominal not adjusted for inflation and real gdp which is adjusted for inflation that ratio of 6.9 brings it back to reality the market didn't like it. intraday of 10s. it was somewhat okay at 8:30 eastern. but as the notion wore on you see what yields did. go to 30-year urks only maturity up 10s are down 7 on the day. 30-year bonds down 8.5 on the day and below yesterday's low yield as you see

and 5s to 30s a favorites of the yield curve spreads with the 5 is the flattest since december of 2019. wlook at the 2-day of dollar index. it's on steroids it likes what it hears from jay powell higher rates more aggressive fed. stronger dollar. back to you. >> thank you very much oil is closing for the day reversing course turning lower. pippa is at the commodity desk and going to explain natural gas. >> don't give it away. we start off with oil pulling back a little bit after hitting the highest level since 2014 today. wti is down after hitting $88.54 this morning

brent crude is down. we have had firms of goldman, jpmorgan on bank of america talk about $100 oil citi is saying that they see brent averaging $69 in q3. he thinks that supply is catching up and next quarter seeing building stocks and now to nat gas that contract is surging nearly 40% today but the more act ifrly traded contract for march delivery up 5.6% tyler? >> thank you apple, that is a big one set to report earnings after the bell it often is a volatility of its own. calling for revenue. that's almost a billion dollars a day.

realize that maybe more than that could the iphone maker be a safer harbor good to have you with us what are you looking for out of apple? what would the downside surprise be to be most concerned about? >> thank you for having me i think three things that investors are looking for, how the semiconductor shortage is impacting them jit's a $6 million impact in december and as you mentioned the company earnings supply shortages is an issue. one thing to monitor secondly is the u phone. the supply chain data points seem to be pretty healthy. apple iphone numbers seem to be pretty good in december and march on a year of year basis. services not a lot of high

expectation heading in people expect it to be strong. typically march mid season is strong in china to see how they start. and then the last thing i would probably say is that kind of like korss are an issue and semiconductor components -- are you paying more for those. that's going to be a head wind. >> how has the latest iphone been selling as far as you know? >> the feedback is great if you look at the numbers obviously apple doesn't disclose units but we have them close to 2 82 million units in december i would say if you look at the historical numbers probably all-time high for unit numbers for apple in the december

quarter. so overall it is good. the traction in china i think over the last -- some of it has to do with huawei falling off but apple is aal excising on that especially in china. >> a thing that many analysts look at with apple is gross margin what are you looking for there how important is it and why? >> i think gross margin is important. we are in the -- range maybe a couple of like -- base i points for march from december give or take like i said i think component costs are inflationary pricing has gone up but things like memory goes up. deinflationary i think somewhere in the 41.5 to 42.5% range is kind of where people are i would say.

>> how -- sorry. how important do you think the guidance is today? >> i think the guidance is very important. we don't have a proper guidance. i think the reason is right now if you look at it most people expect flattish year over year and keep in mind first half of 2021 is a very strong year for apple and flattish year over year anything more than that is viewed positively. operating a tough constraint environment. >> thank you so much we appreciate your time today. >> thank you for having me. coming up, we look at dow components that maybe didn't get enough attention mcdonald's and dow itself. plus seagate and te ra dine. much more coming up on "power lunch.

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percentage gainer on the index guided higher for the first quarter. higher prices offset supply chain challenges seagate off the percent levels of the day the company raising guidance for the coming year. teradyne crushed earnings were good it is the guidance that's scaring investors. the company lowered guidance as they ramp up production for a new chip shares down 25%. today's early gainsfaded and the safety trade is working. netflix today getting a boost as bill ack mman buys the stock those stories coming up next

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welcome back today it is time for a power rundown. the big bet on netflix neil young's bluff and spending spree for peacock.

casey, welcome let's start with bill and this purchase of more than 3 million netflix shares. >> good to be hire. >> no word on whether he would -- do you think he'll try to shake things up >> well, you hasn't mounted an activist challenge in a long time, and when you read what he said about this pu purchase, he seems excited about netflix over the long term those shares were down about 50% from their high and i think he saw this as a good time to make a move >> and so what do you think? i want to drill down a little harder when he makes a move, often it is not just a buy and hold kind of move. what do you sense he might be up to, if you sense anything. >> well, look, there are definitely reasons for netflix to be concerned, and we'll talk about one of those, peacock, in a minute when you look at the streaming

landscape, there was a vision netflix may have had a couple years ago when they thought that they were going to be the ones essentially buying up all of the content out there and netflix was going to be the one streaming home for it. what we have seen instead, though, is that many other streamers, whether it's hulu, hbo max, paramount plus, they also want to play this game. they're spending a lot of money, so netflix is having a harder time growing its subscriber base if i were bill ackman, that's a concern i would have as i look to the near term future of this stock. >> it's up at $390 on an 8.5% rally. let's talk about spotify, which calls neil young's bluff, removing his entire catalog after he blasted them for spreading covid misinformation through joe rogan's podcast. promising to bow out if rogan wasn't removed here's my real question. what does spotify do if taylor swift is next? >> it is such a great question and believe me, this is not

going to be the last time we see an artist clash with spotify over one of their podcast hosts. spotify is making a huge bet on podcasts and we know that those controversy conspiracy oriented podcasts are often some of the best performing, so i think we should absolutely assume that maybe let's say more contemporary artist than neil young is going to throw a fit and they may be able to give up that streaming revenue because as we also know, spotify doesn't pay that much per stream so if i were spotify, i would be developing a much better response plan than we have seen from them so far >> but spotify is the big dog in this space, isn't it neil young himself concedes 40% of his streaming revenue comes from spotify >> that's true but keep in mind, artists are typically only making fractions of a penny per stream there, and much of that is going to their record label so i think you're going to see more artists willing to make a

stand here you know, artists are often quite political by nature and they increasingly have more ways to make money directly from their fans and may not need streaming revenue as much as a spotify would be counting on >> spotify shares down 2% today as they weigh all of this. casey, so let's circle back. you mentioned peacock a moment ago. comcast just revealed plans to double content spending as the streaming arms race heats up what does it say to you? >> look, what this says to me is that there are any number of big players out there who still think they can build a scaled upstreaming business, and they're willing to spend big bucks to get it. this is the problem that netflix had. i think a few years ago, they didn't think they were going to be in this position. they thought comcast would want to sell a bunch of stuff to them now they have to compete directly then again, if you're working on the peacock side, you're in for

a long battle against some entrenched opposition. >> this does feel like there are a lot of competitors here, and it feels like one of those businesses where there will be two or three dominant players. do you agree or disagree with that >> i think that's probably right. i mean, maybe it winds up being three or four, but gosh, i know right now, i'm subscribed to too many of these tv services and it seems like a new one is popping up all the time. over time, consumers are going to want to consolidate those >> all right casey, thank you very much interesting conversation casey newton well, higher costs are hurting mcdonald's, yes, they are. up next, what it means for the ocice of mcnuggets and for the stk. >> what about the fries?

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welcome back, everybody. shares of mcdonald's drifting lower along with the rest of the marbt right now. after the company missed earnings estimates rising costs weighed on profits and mcdonald's is warning costs could rise even further. kate rogers has the details. >> hey, tyler. that's right revenue up about 13% year on year that was outpaced by a 14% rise in expenses which you mentioned squeezed profited for mcdonald's they said on the earnings call cost for paper goods and food increased by 4% in 2021. that will roughly double in the u.s. in 2022 to high single or low double digits with the bulk of the impact there being felt in the first half of the year.

incentive based compensation also led to higher costs in the quarter. mcdonald's did report u.s. same store sales increased 7.5%, beating analyst expectations this was in part to what the company called strategic menu increases including promotions including the mcrib and the crispy chicken sandwich. staffing at restaurants has improved in recent weeks with about 1% of stores impacted at the moment with shorter hours. drive-through times have gotten longer due to those staffing challenges, but that drive-through business, of course, remains essential due to the lingering pandemic wages increased about 10% last year at mcdonald's franchisees also concerned about labor and cost a survey out this week with some franc franchisees saying they exspectg they haven't seen pullback so it

remains to be seen what it looks like this year >> what do you hear from other companies that do kind of what mcdonald's does? >> the big one we have heard from was domino's. they said the food basket inflation for the year is up between 8% and 10%, which is unprecedented. they're doing uyeek things there. instead of raising prices on one of their proemose, they're offering eight chicken wings instead of ten so they're pulling back and reducing some of the size of the food that's being offered in the combo deals. mcdonald's is the first big name to report so we have a few weeks with more big names to come. >> i'm sure the commentary will be fascinating to see. kate, thanks >> let's do a quick market check as we are about to enter the final hour of trade. if you're brave, so let's rewind to yesterday going into the fed meeting, we saw the market perform poorly during that, especially during chair powell's press conference. more poorly when the futures

started trading last night this morning was a different story. we were about 605 points on the dow at the highs >> the way you begin is not the way you end. if your rurp, you're down. if you're down, you're up. let's see what happens in the next hour. >> close your eyes thanks for watching "power lunch. "closing bell" starts right now. . >> here we go again. thank you, kelly and tyler welcome to "closing bell." i'm sara eisen the wild swings keep coming. the major averages trading in another wide range today, giving up substantial earlier gains nasdaq down more than 1% as we head into the close. >> and i'm wilfred frost good afternoon let let's have a look at what's driving the action tesla and dow inc. on the back of their results some strong data coming in fourth quarter gdp trouncing estimates with a 6.9% print, and weekly joble