Jim Cramer says it’s too early to buy until we find out whether new variant is spreading in the U.S.

Friday’s sharp decline for stocks, spurred by concerns over a new Covid-19 variant, is not a buying opportunity, according to CNBC’s Jim Cramer.

“We’re going to wake up next week and find one [case] in this country, and I’m not going to recommend anyone buy anything today until we’re sure that isn’t going to happen. And I can’t be sure that it won’t,” he said Friday on CNBC’s “Squawk on the Street.”

“No panic. Let others panic. We’ll profit Monday,” he added.

The Dow Jones Industrial Average dropped 800 points at the opening bell, for a loss of 2%. The S&P 500 declined about 1.3%. The sell-off followed the World Health Organization warning on Thursday about a new variant that’s been detected in South Africa.

Cramer said that it makes sense for names like Regeneron and Pfizer to move higher, but that other areas of the market should be avoided.

“I’m reluctant to say this is the time to go buy a retailer, or go buy a cruise ship company because there will be people who are much more risk averse than you and I and then refuse to believe that the scientists can get this under control, so not a buying opportunity,” he said.

That said, Cramer did say there are some areas of the market that look attractive on the sell-off, including Chevron.

“If I had to start buying something today, I would be looking to buy Chevron,” he noted. “There is demand for oil, there will be travel…I’m trying to distinguish between my being concerned about what’s going to happen and what people are doing on the very same day where they may just decide ‘you know what, I can’t take it anymore.’ And I would rather buy from those people on Monday than I would buy from them today,” he said.

Cramer added that Amazon will likely do well on Friday. At the opening bell the stock gained 1%.

Others, however, said Friday’s dip is a buying opportunity.

“Friday is the day after Thanksgiving, probably not as many traders on the desks with an early close today. So potentially lower liquidity is causing some of the pullback,” Ajene Oden of BNY Mellon Investor Solutions said on CNBC’s “Squawk Box.” “But the reaction we’re seeing is a buying opportunity for investors. We have to think long-term.”

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– CNBC’s Jesse Pound contributed reporting.

Tesla bull Cathie Wood says Apple should’ve bought the EV pioneer, but ‘we’re happy they didn’t’

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Closely watched money manager Cathie Wood told CNBC on Wednesday that Apple could have owned the driverless vehicle market by purchasing Tesla when given the chance during the electric vehicle maker’s troubled Model 3 ramp-up.

“We’ve been watching Apple very carefully for years now. Because what is an autonomous vehicle? It’s the ultimate mobile device,” she said in a wide-ranging “Squawk Box” interview, during which also she talked about her Ark Invest strategies, the returns she expects long-term, and buying Zoom on its recent drop.

Apple shares hit all-time highs last Friday and then again Monday — rising solidly above $2.5 trillion in market value — following last week’s Bloomberg report about the tech giant accelerating efforts to launch a self-driving vehicle. Apple was not immediately available to respond to CNBC’s request for comment about its autonomous ambitions. Tesla was not immediately available either to comment on Wood’s comments.

“This is very hard work — and with all the management turnover, we’d be surprised if they’re able to pull it off that quickly,” Wood said, referring to a Bloomberg report in June about the departures at Apple’s autonomous unit of three top managers. In 2018, Apple lured Doug Field, then Tesla’s senior VP of engineering, back to the company where he had previously worked. Apple also hired myriad other former Tesla employees.

Wood — a longtime Tesla uber-bull and shareholder and believer in CEO Elon Musk — told CNBC, “This should have been Apple’s market. Apple should have bought Tesla, actually when they were given the opportunity. We’re happy they didn’t.”

Musk revealed, in a tweet in December 2020, that he reached out to Apple CEO Tim Cook “during the darkest days for the Model 3 program” about the possibility of selling Tesla “(for 1/10 of our current value).” Musk said Cook “refused to take the meeting.”

The first Model 3s, a less expensive EV sedan aimed at mass-market car buyers, were delivered in 2017, after increasing production to meet demand was problematic. In 2018, Musk tweeted that the car business was “hell” and that he was sleeping at the factory to try to solve the problems.

Fast-forward to today, Tesla has joined the $1 trillion market cap club, and Musk, the largest shareholder in the EV company, has been selling billions of dollars of his stock holdings.

Wood told CNBC she sees “nothing wrong” with Musk selling stock and taking profits and paying billions of dollars in tax bills related to stock option grants.

Regulatory filings late Tuesday showed that Musk exercised options to buy 2.15 million shares of Tesla and sold 934,091 shares worth just over $1 billion. Since his Twitter poll on Nov. 6, asking whether he should sell stock, Musk has unloaded 9.2 million shares worth $9.9 billion.

— Reuters contributed to this report.

Op-ed: Holiday shopping season is here, and these retail stocks offer a host of opportunities

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Betsie Van der Meer | DigitalVision | Getty Images

With holiday shopping on my mind and Black Friday in plain sight, I’m laser-focused on the retail sector and its participation in my clients’ investment portfolios.

Last week was big for consumers: October retail sales numbers beat expectations, and we had a slew of retailers report earnings. Overall retail reports have been positive, but how can investors translate that into buying opportunities? I always try to look for the stories in earnings reports. What is the market telling us?

If we can identify trends and piece together themes, we can start to develop a thesis around investment opportunities and position portfolios accordingly. So, what can we conclude from recent retail and particularly last week’s earnings reports?

Trends and themes

Consumer consumption is strong: Consumers are spending and paying more for the products they want. October retail sales represent the third straight monthly increase in retail sales and the largest monthly increase since last spring. We’ve also seen companies, especially those with pricing power report increases in sales revenue despite passing higher costs along to customers in the form of higher prices.

Retail with a side of tech = $: There is no doubt that we’re in the middle of a digital adoption revolution…it’s a whole thing. Everything seems to get better when you sprinkle a little, or a lot of tech on it. Marrying tech and taxi cabs created Uber and Lyft. Putting tech together with grocery shopping gave us Instacart. In the third quarter we’ve seen digital sales in retail dominate the headlines. Target and Lowe’s both reported year-over-year increases of at least 25% in digital sales. However, the comparison to last year really doesn’t tell the full story. When we compare digital sales to 2019, pre-pandemic numbers, we see that the entire game has changed. Compared to 2019, the increases are real.

Online sales growth compared to the third quarter of 2019:

  • Walmart: up 87%
  • Home Depot: up 95%
  • Lowe’s: up 158%
  • Macy’s: up 49%
  • Kohl’s: up 33%

Data is king: Data helps companies develop more customized experiences for shoppers, retain customers and ultimately grow revenue. The data being collected from online shopping is capturing shoppers’ spending behavior such as clothing size, favorite color, and personal style. It is making companies smarter about their customers’ needs and preferences and they are using it to develop targeted communication to give shoppers exactly what they want. From an inventory perspective, predictive models can use data to help a brand determine how many more sweaters they would have sold if they didn’t run out of a particular size. While online shopping gathers data, customer loyalty programs capture even more data specific to each customer.

Investable opportunities

Macy’s – I’m calling this a turnaround story. The most significant year-over-year sales growth rates in October’s retail sales report, was in department stores. Macy’s reported their third-quarter performance last week, and they beat expectations.

But let’s go back to around 2018. Brick and mortar stores, especially department stores were struggling to keep up with Amazon. Macy’s stock took a nosedive off the high board and kept going down, never to be seen again — until last year.

In 2020, the company laid out an ambitious plan to turn around the brand, the Polaris Plan. They made plans to close 125 of their bottom-tier stores and focus on their higher-end markets. They also plan to focus on their Macys.com business and launch six $1 billion private-label brands under the Macy’s umbrella.

I believe the future of Macy’s lies in their online business. We can look at the spin-off of Saks.com earlier this year as evidence of what an overhaul of a department store e-commerce business can accomplish. Saks.com is now a fully functioning and thriving tech company. Sales are up 30% since they spun off in April, the number of visitors to the site have doubled, and the total merchandise value on the site has increased 80%. While I don’t believe Macy’s should spin off their online business, if they are able to transform their dot-com business into a marketplace — so it becomes the main event, rather than an extension of the stores — they can ride this digital adoption wave all the way to the bank.

Macy’s stock was up more than 20% last Thursday in reaction to the earnings beat. It took a tiny dip this week, but it’s up over 183% year-to-date and up over 283% over the past year. Macy’s currently trades at a significant discount to pure e-commerce companies. If they successfully make over Macy’s.com, I believe it is a deal at its current valuation.

Farfetch – When I look at which areas within retail represent the most opportunity in digital adoption, it’s the luxury space. Luxury brands have been slow to adapt to e-commerce partly because they want to be seen as elite. Some believe that their je ne sais quoi may not translate if customers must “click to add to cart.” Also, luxury brands have always relied on their premium in-store experience to woo customers.

Farfetch, a luxury e-commerce marketplace offers retailers and brands an online sales platform and access to their 3.6 million luxury shoppers. I believe it is best positioned to capitalize on luxury’s shift to online sales. They have over 1,300 brands, serve more than 190 countries and in the first half of 2021, they had 60% growth in gross merchandise value, or GMV – that is, the total dollar value of processed orders – with an average order of $593. Since the first quarter of 2020, they have been adding about 450,000 new customers each quarter and kept up that rate into 2021, when most stores had reopened.

Farfetch reported earnings last week. While revenue grew 33% year over year, and GMV was up over 27% year-over-year, management’s expectation was 30% growth in GMV. The main reasons they fell short of expectations was due to increased costs for demand generation or campaigns to build brand awareness and target specific customers.

Despite the miss, I believe Farfetch is just getting started. 1) They have more brands and inventory than any other platform. 2) In the past two quarters, they have grown their digital platform faster than any other luxury retailer. 3) It is not easy to open a retail store in China, but that nation is Farfetch’s second largest market. The company is providing their 1,300 brands instant access to Chinese consumers – the most important market in luxury. 4) At its core, Farfetch is a tech company and has leveraged its expertise to help brands create tech-driven, in-store experiences that extend to online.

Farfetch stock has seen better days. Year-to-date the stock is down about 42%. However, if investors have the tolerance to be patient, there is a great possibility they will be rewarded over the next one to two years.

Tiffany McGhee is the founder, chief executive officer and chief investment officer of Pivotal Advisors and a regular CNBC Contributor. 

Rocket Lab CEO says companies not reusing rockets are making ‘a dead-end product’

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A look at the company’s production floor shows a series of Electron boosters, with the typical black carbon fiber rockets in the foreground and a metallic-looking reusable booster in the center.
Rocket Lab

Rocket Lab CEO Peter Beck was once confident that his company would never reuse its rockets like Elon Musk’s SpaceX — to the point that Beck promised to eat his hat.

A few swallowed threads of blended hat later, Beck has dramatically changed his tune. Rocket Lab is nearly finished with a development program that uses helicopters to catch Electron boosters after launches, and the company is designing its Neutron rocket to be reusable when it debuts in 2024.

“I think anybody who’s not developing a reusable launch vehicle at this point in time is developing a dead-end product because it’s just so obvious that this is a fundamental approach that has to be baked in from day one,” Beck told reporters during a press conference on Tuesday.

Beck’s declaration aligns in sentiment with Musk, who told CNBC in response to a Rocket Lab recovery video that “full & rapid reusability is the holy grail of orbital rocketry.”

Traditionally, the rockets that launch satellites and spacecraft are expendable – meaning the booster, which is the largest and most expensive part of the rocket that gets it off the ground, is discarded after a launch. SpaceX pioneered reusing orbital-class rocket boosters, with Musk’s company regularly landing its Falcon boosters after launches and reusing them up to 10 times each.

A composite image showing a Falcon 9 rocket booster lifting off and a few minutes later landing back near the launchpad.
SpaceX

Rocket Lab’s approach to recovering its Electron boosters is different from SpaceX, which uses the engines to slow down during reentry and deploys wide legs to land on large pads. Rocket Lab guides the Electron booster back through the atmosphere and then deploys a parachute. The company plans to use a helicopter to snag the parachute above the ocean and carry the booster back to land.

Reusing orbital rockets is becoming increasingly practicable for companies in a variety of ways. SpaceX plans to take landing its rockets a step further with Starship, Rocket Lab is adding parachutes and helicopters for Electron, Virgin Orbit touts a 747 jet approach as the reusable foundation of its launches, and Relativity Space unveiled plans to reuse its coming Terran R rockets.

Some U.S. companies remain focused on expendable rockets, such as Astra, ABL Space, Firefly Space and United Launch Alliance, the joint venture of Boeing and Lockheed Martin.

Helicopter rocket catch next year

Rocket Lab launched an Electron mission carrying satellites for BlackSky last week and, for the third time, successfully recovered the booster from the water after returning it through the atmosphere.

“The next recovery flight that we will make will be one where we will go and actually catch it,” Beck said on Tuesday.

Timing of that next recovery attempt depends on “helicopter readiness,” Beck said, as Rocket Lab has “a significantly larger helicopter in work” and it “needs some modifications” completed to be ready to catch Electron.

“We certainly hope to have that flight within the first half of next year, or as soon as practically possible,” Beck said.

A close look at the company’s reusable Electron rocket booster.
Rocket Lab

Rocket Lab is using a new thermal protection system on its Electron booster to strengthen it for recoveries, a type of graphite that makes the carbon fiber rocket “almost look metallic,” Beck said.

Once Rocket Lab completes the recovery test program, Beck expects that “around 50% of Electron flights will be reusable versus expendable.” Rocket Lab’s main goal of reusing rockets remains improving production output.

Reflecting on 2021, in which his company has completed five launches so far, Beck said the year has been “horrible” and “really, really tough.” He cited the New Zealand Covid lockdown procedures as the main pain point for the company, saying it has slowed the company’s production and schedule.

But Rocket Lab is preparing to bounce back next year.

“We have a bunch of launch vehicles sitting on the floor, and we’re going to have to have a very, very busy 2022,” Beck said.

SpaceX rocket business leadership shakes up as two VPs depart

The SpaceX Falcon 9 rocket and Crew Dragon capsule on launch Pad 39A at NASA’s Kennedy Space Center on November 09, 2021 in Cape Canaveral, Florida.
Joe Raedle | Getty Images

The leadership of SpaceX’s rocket business has been shaken up, CNBC has learned, as two vice presidents have parted with the company.

The changes arrive with Elon Musk’s space company now the leading U.S. rocket builder with its Falcon 9 and Falcon Heavy vehicles. The company is also investing heavily in the development of its next-generation Starship rocket.

SpaceX vice president of propulsion Will Heltsley has left, multiple people familiar with the situation told CNBC, having been with the company since 2009. Those people said Heltsley was taken off Raptor engine development due to a lack of progress. The Raptor engines power SpaceX’s Starship rocket and Super Heavy boosters.

Heltsley’s departure demonstrates the intense pressure on the engine’s development, given the key role it plays in Starship’s success. The company has successfully performed a multitude of test firings and flights with Raptor, steadily improving the engine. Musk recently said that a second generation of the Raptor engine “has significant improvements in every way.”

“But a complete design overhaul is necessary for the engine that can actually make life multiplanetary. It won’t be called Raptor,” Musk said in a Tweet on Nov. 16.

SpaceX’s Jacob McKenzie, who has been with the company for more than six years, is now leading Raptor engine development and production, sources said.

A closer look under the base of Super Heavy Booster 4 at the 29 Raptor engines.
SpaceX

Lee Rosen, SpaceX vice president of mission and launch operations, left last week, people said, as well as Ricky Lim, senior director of mission and launch operations. Rosen had been with SpaceX since 2013, while Lim joined the company in 2008.

SpaceX did not respond to CNBC’s request for comment on the leadership changes.

A handful of other long-time employees left after SpaceX closed its purchase offer on Friday, timing which people familiar with the matter indicated was in part tied to employees’ stock vesting schedules. While SpaceX did not raise new capital in the secondary sale, the round was done at $560 a share – increasing the company’s valuation to $100.3 billion.

SpaceX has had a banner year: The company has launched 25 successful Falcon 9 missions, carried 12 astronauts to orbit with its Dragon capsules, grown its Starlink satellite internet service to about 140,000 users, and continued to make progress with Starship.

Musk last week said SpaceX will “hopefully” launch its first orbital Starship flight in January or February, which represents the next major milestone in the rocket’s development. That launch is pending regulatory approval by the FAA, as well as technical readiness.