And welcome to power lunch. Im melissa lee. Check out this rally right now all 11 sectors are in gree green. Taking a look at some of the stocks were watching. Salesforce is under pressure for the second day in a row, down about 7 in the last week as it gets set to report earnings after the bell and reportedly to make a deal. And we have exclusive data on how the bitcoin boom is boosting this payment stock first lets get over to bob for more on todays rally. Hey, bob hello, melissa. Good start to a traditionally good month we got talk about a new stimulus plan, janet yellen on the air and, overall, 11 sectors all on the up side. Bank stocks leading the way but technical stocks also. No dig selloff in tech that was also a november play there. Theres energy you have your value play with banks, energy up you have your growth play with tech, cyclical with industrials up and even more defensive groups, Consumer Staples on the up side as well. This is what i mean when i say the goldie locks scenario, everybody in the pool. Mega cap 10 again. Nobody selling it off. Other parts of the market are rallying we got a great day going for apple, amazon, all of the use mega cap names there we have new highs in the semiconductors. The market loves it when you have lists littered with semiconductors xilinx with a new high as well everybody is exciting about cloicl closing at new highs its up three quarters of the time thats a good month overall. Just bear in mind the important thing is when you have really good novembers up 10 , traditionally december tends to be a little subpar it pulls some of the juice away from the santa claus rally well see but its a great start to the month. Such a nontraditional year. I wonder how much we can rely on those things that you mentioned. Bob pisani, thank you. The s p and nasdaq at record highs after a blackbuockbuster november joining me is Kathy Entwistle and burns mckinney, portfolio manager. Good afternoon to both of you. Good afternoon. Kathy, is it just the season for buying expensive things at no discount . Were not seeing a lot of discounts in the stores. The m a looks expensive. Do you just buy the market here . We are absolutely looking for opportunities we do think theres going to be volatility going through to the end of the year based on covid, the uncertainties in the market with the economy potentially shutting down or closing down for a small period of time so what were doing is were trying to buy on dips and dollar cost averaging on the market the market feels pretty positive right now. Were encouraging clients to be participants and not stand on the sidelines. And if youve already been participating, whats the case this is more of a buying opportunity than a selling opportunity . Well, what weve been telling our clients is that stocks certainly are not cheap, as was noted. I think its instructive to note that the market is up 12 since the beginning of the year on really flat forward earnings and the stocks werent that cheap to begin with. So were not telling investors necessarily to pull back from equities, but they should probably expect a little built more muted returns going forward. That being the case, probably countless on Capital Gains and right now is the time to focus on dividend payers Interest Rates are probably set to be lope e lower for longer a thats the type of market where dividends can make up for a lack of Capital Gains in the coming months kathy, is that how you protect yourself these days . Do you resort to the dividend payers or is this Something Else no, i think dividend payers are great and the yields right now are still pretty good. We have to look at the cycles and trust the cycle. Basically when you look at the business cycles, were coming out of a recession n any time we come out of a recession in the past, value paying, dividend paying and small caps and mid caps. Were trying to focus on that as well we are very positive on 2021 in the markets. And we see probably a 10 plus return, so we want clients to be invested in the equities burns, what does it mean to be cautious, to be conservative as an investor these days . Teslas getting ready to enter the s p 500. Who knows what kind of impact that is going to have. The s p has been so driven by mega cap tech names. Is there a different strategy you need to employ if youre going to be careful now . One way of thinking about it is think about what you try to build with a good football team. About two thirlds thirds of yor are in the trenches and maybe a third are going to score a touchdown for you. When you think about an equity portfolio, those blocking and tackling can be done by companies that have stable, recurring a recurring, predictable earnings. For your touchdowns, were not really in the camp that we feel we should go into those epicenter stocks, those that have been really hit by the pandemic when you can, if you can find Industry Leaders and secular growers trading on sale, thats a way to go. Or just look at stockspecific stories, the type of companies that dont necessarily depend on Economic Growth to appreciate. You were talking about buying on dips, kathy are you talking about some of these names that have dipped because of the pandemic and the resulting economic fallout or are you talking just otherwise strong names that might just take a breather every now and then. A little bit of both. I think its just an opportunity for clients who have been nervous about the markets since march really and the uncertainty of covid and, you know, second stimulus package and have we gone up too much at this point, is it too late did i miss it . Those are all the kinds of questions that were getting were in it for the long haul. We want our clients to be invested long term if youre already invested, great, were adding to positions. And if youre not, were getting clients into the market. I look back to war war i, sp d war one and what followed that, the spanish flu. What came after that was the roaring 20s, people getting back in circulation, spending their money. We all remember what happened after the roaring 20s, too, of course yes kathy, burns, thank you very much minor details president elect biden pushing for any relief package as Steven Mnuchin testified in front of the congress about the economy lets bring in Steve Liesman the president elect has chosen the treasury secretary and the current treasury secretary today all agreeing on one thing, the need for congress to pass new relief for the economy. Heres out janet yellen characterized the Current Situation after being formally introduced by president elect biden as his pick to be the new treasury secretary so many people struggling to put food on the table and pay bills and rent its an american tragedy and its essential that we move with urgency yellen and other members of the Biden Economic team signaling they will focus on minorities and women and those hit hardest by the pandemic. Earlier in the day treasury secretary Steven Mnuchin called for congress to allocate unused funds to the c. A. R. E. S. Act to new relief and fed care jay powell warned of dangers ahead for the economy. There are a lot of Small Businesses at risk of going out of business during this winter, which could be a tough new month. And at the same time were getting new about vaccines so there really is in the medium term upside risk here mnuchin took tough questions about his controversial decision to end five medical emergency lending programs and he insisted he following the letter of the law. He said earlier that he would be reviewing or happy to review the bipartisan 908 billion for relief that is now making the circuit in congress right now. Melissa. Steve, powell in q a said theres a big difference between short term and medium term but for right now its going to be a very, very tricky situation. Do you think he made the case in front of congress for action at this point he didnt really give any numbers here no, he didnt, melissa. And you ask a really good question because its kind of funny that everybody agrees on the same thing but they cant get there so the question is do they all feel like we need relief badly enough that theyre willing to put aside their differences and compromise on the issue of immunity for businesses from lawsuits related to covid by their employees on the opposition of republicans to state and local aid. They all agree on the need for more money they just dont agree on compromising its just hard to know if they think things are going to get bad enough you and i had a nice, interesting chat yesterday, melissa, where i said if the friday number is negative and very bad and up said, yes, and the market sells off, that might be what lights a fire under congress to compromise we got new records today. Steve, one comment you made to me a while ago about yellen and powell and how they are in complete agreement about the need for stimulus but they might not be in agreement when the hard part comes and thats when the economy heats up there is some expectation there will be inflation copping somin are rather than later. Is there reason to believe these two could disagree when that medium term comes and things heat up . Sure. Its Monetary Policy that the fiscal and monetary side come together when there is need for stimulating the economy. Thats when they come together and agree on policy. When things get better, they should necessarily go their separate ways. So theres a time they will part in terms of their duties and responsibilities to the economy. They wont always see eye to eye. We wouldnt need two different agencies or groups if they always saw eye to eye. The fed is pledging to remain low for a very long time so i dont know if its win a year but i suspect it may have be longer than that, melissa. Steve livesmesmans are thanku coming up, we are watching shares of vaccine maker moderna reverse midday, now down about 7 well have more on that. Plus, paypal is riding the bitcoin wave as a top analyst said its about to pay off for that stock and what lryar fink just told investors about the crypto phase. Thats all next. I have an idea for a trade. Oh yeah, you going to place it . Not until im sure. Why dont you call Td Ameritrade for a strategy gut check . Whats that . You run it by an expert, you talk about the risk and potential profit and loss. Couldve used that before i hired my interior decorator. Voila maybe a couple throw pillows would help. Get a strategy gut check from our trade desk. Before money, people tools, cattle, grain, even shells represented value. Then currency came along. They made it out of copper, gold, silver, wampum. Soon people decided to put all that value into a piece of paper, then proceeded to wave goodbye to value, printing unlimited amounts of money as they passed the buck to the future. Thats why its time for Digital Currency and your investment in the grayscale funds. Go digital. Go grayscale. Helafter the yearya knwe just had, . The usual gifts are just not going to cut it. So we have to find Something Else. Good luck what does that mean . We are doomed. laughter thats it. I figured it out were going to give togetherness. That sounds dumb. No, santa, were going to take all those Family Moments that make the holidays and package them. Oh, you are getting so big woahh its down to the wire, the teams been working around the clock. Im not sure its going to work. Itll work. I didnt know you were listening. Hmm. laughing that works. Bitcoin has climbed back to record highs in the past month old school investors have embraced it. Lets bring in seema mody. At the council of Foreign Relations this morning larry fink acknowledging that bitcoin has caught the attention and the imagination of many people its still untested. Pretty small relative to other markets. And he says it is seeing big, giant moves every day but its a thin market. Can it evolve into a Global Market fink said possibly he noted having a Digital Currency has a real impact on the u. S. Dollar, making it less relevant, not for americans but International Holders of dollarbased assets. He did also raise a question that i think many economists and embassy tifs a executives are wrestling with. Are there other ways to efficiently transact overseas as well as here in the u. S. Fink really joining a prominent number of highprofile voices, melissa. The move were seeing in bitcoin and currency in general is activating a discussion. Seema mody, thank you bitcoin is just about as record high a rewards credit card will give you bitcoin instead of cash or miles. And mizuho claims bitcoin is boosting engagement. Dan, great to have you with us thank you great being back going into bitcoin and allowing users to trade bitcoin, this is all about engagement what have you found in terms of how much more engaged users are because of bitcoin its a great question the survey we did, we surveyed almost 400 people. Surprisingly almost one fifthfo them already traded bitcoin. So this is a huge number 65 of them actually want to use bitcoin as a currency. But the key thing is not the bitcoin revenue which is minimal, its the higher engagement turns out those who trade bitcoin are more than three times more likely to engage with the paypal app you use more product, use it more frequently, which enhances p paypal is this cause and effect or coincidence . The people who trend to trade bitcoin tend to be more digitally savvy and willing to engage the app in all the different ways that you outline . Is if because you trade bitcoin they are using the app more . We actually thought about it, is it a selfselective group we asked what percent of you saw your own personal engagement increase and 50 said that they saw engagement go up versus only nine that saw it now so the uptodown ratio is huge. Its not just a selfselective group. Those people that start trading bitcoin use the app more often and this creates the fly wheel of more revenue, et cetera, et cetera, which is going to be very, very visible starting in q4 and into 2021 what are your expectations in terms of that incremental dollar and how much a bitcoin trade could add in incremental dollars in usage in the other parts of the app . Okay, so what we did is we actually looked at, for example, square as a competitor square cash app has been allowing bitcoin for a long time square general rites 3 or 4 pr user thats not the big deal. The big deal is the engagement for every point of higher engagement, remember on average, paypal users engage about 40 times or year. For every onepoint increase, if you go from 40 to 41, its 2 to 3 of Revenue Growth if you move by two points 40 times a year versus 42 times a year, thats 5 to 6 of higher revenue next year. Next year theyre facing ebay drag ebay is moving to managed payments we think this drag will be offset or more than offset due to higher bitcoin engagement and i dont think thats fully appreciated by the street. But, dan, how much of this is because of that dopamine effect of these folks bought something thats been going up quite a bit for much of the year i mean, if bitcoin takes one of its flights downward for a bit, is that engagement going to tail off . I think youre raising a very interesting thing. The more bitcoin goes up, the more people trade on it. Weve seen this with square two years ago when square became a, quote unquote, bitcointrade remember, they didnt even open venmo. Thats on happenihappening next. They didnt let people use it to trade or current scy next year so theres more coming next year thats not here this career. There is an element of this being sort of a peg on bitcoin but i think the benefits outweigh the risks great to speak with you any time. Markets and Many Americans are focused on the light at the end of the covid tunnel, a vaccine. Right now the cdc is meeting to decide who gets the vaccine first. Well tell what you theyre likely to do the mystery chart, this high flying stock is up 50 since the start of the month the name and the trade next on power lch un. We love our new home. Theres so much space. We have a guestroom now. But, we have aunts. Youre slouching again, ted. Expired, expired. Expired. Thanks, aunt bonnie. Its a lot of house. I hope you can keep it clean. At least geico makes bundling our home and Car Insurance easy. Which helps us save a lot of money oh, teddy. Did you get my friend request . Uh, ill have to check. doorbell ringing aunt jonis here for bundling made easy, go to geico. Com. Hello . New projects means easy, you need to hire. Gers. I need indeed. Indeed you do. The moment you sponsor a job on indeed you get a short list of quality candidates from our resume database. Claim your seventy five dollar credit, when you post your first job at indeed. Com home. Welcome back power lunch. Virgin galactic shares taking off again. The stock is up more than 60 in the past month your trading nation team, tom gordon and mark tepper mark, you say, and i quote, this is just one of these ridiculous robinhood names thats pure speculation. Just because its trading at 250 times next years revenues how do you trade it . Id have egg on my face its a pure speculation, pure hype stock it amazing me that this thing has a market cap of 7 billion and will do less than a Million Dollars in sales this year the valuation is absolutely crazy. These flights are priced somewhere in the 250 to 300,000 range. My question is who can afford these . And then what is the total addressable market, the tam. What i keem sp saying is i h a lot of clients with a net worth between 5 and 10 million and i couldnt imagine any of them requesting a distribution to pay for a trip from space if they did, wed have a tough conversation i think the tam is for people with 10 million or above and it goes from 2. 4 down to 1 million and that changes everything. The most interesting part about this country is not space travel but high speed, pointtopoint travel, hyper sonic travel, which is supposed to go eight times as fast as an aircraft but thats a long way out. Virgin to no touch. You like the stock whats the best argument for why virgin should still be chased by investors. Well get to the technical calls in a second. I understand the valuation is astronomical, pun intended, but it seems to be rewarded visionary ceos high for this i th