Closing Bell - Closing Bell 11/16/23

Episode Date: November 16, 2023

From the open to the close, “Closing Bell” and “Closing Bell: Overtime” have you covered. From what’s driving market moves to how investors are reacting, Scott Wapner, Jon Fortt, Morgan Brennan and Michael Santoli guide listeners through each trading session and bring to you some of the biggest names in business.

All right, Kelly, thanks. Welcome to Closing Bell. I'm Scott Wapner, live from Post 9 here at the New York Stock Exchange. This make or break hour begins with the runway for the rally, whether it is as long as the bulls now suggest it is. We'll ask the president of Merrill Wealth Management. It's our first TV interview today, and we're looking very much forward to speaking with Lindsay Hans. We'll do that in just a few moments. In the meantime, your scorecard with 60 minutes to go in regulation. It's been a mostly muted day for stocks. Investors are digesting the past couple of days. What can you say? A big story today, energy.

Oil dropping below $73 a barrel. The sector tracking for another rough ride. There it is, $72.88. Energy as a space, the XLE is down 2.3%. Retail quite the story, too. Walmart shares, well, they're sliding today on that company's cautious outlook. As far as tech goes, Microsoft did hit a new all-time high today, but Cisco shares, they are sharply lower, down by more than 11 percent. And that after the company's

lackluster guidance yields, they're mostly lower, too. Perhaps reacting to some of that weaker consumer news today, a tick higher in jobless claims, does take us to our talk of the tape, whether stocks are cleared for takeoff, as Jeremy Siegel suggested to us right here yesterday. Let's ask Liz Young, SoFi's head of investment strategy. She is here with me today at Post 9. Welcome back. Thank you. How about that? Are we cleared for takeoff? Is this all clear, as some of the bulls are now suggesting? No, I don't think it's all clear. I don't think it's a surprise are now suggesting? No, I don't think it's all

clear. I don't think it's a surprise to anybody that I'm saying I don't think it's all clear. I do think that there's been a tone shift this week. I think we're going to look back on this week and realize that it was very pivotal. I would say the same thing if I were here, by the way, on a day that we were rallying. We went from anticipating the end of hikes to now anticipating the beginning of cuts. Pricing them in too, right? March and May and taking them higher. Not only that, but pulled cuts forward. It used to be that the first cut was going to be in July. Now we've got two cuts priced in in July. The first cut is in May. The reaction to this cooler data, although rational, I think it's rational that we had a

rally. We had some relief. We had a period where stocks were really pressured, not only by rising yields, but by a resurgence in inflation really pressured, not only by rising yields, but by a resurgence in inflation. So it's only rational that the opposite would drive a rally. But the size of the reaction, particularly in yields, a two-year yield that had an intraday move of 24 basis points, that's huge. That's in the 98th percentile of one-day moves for the two-year. That type of reaction, that size of reaction is a different tone. And if we continue to have this big of reactions on just marginally cooler data, I think that's where people are going to start to get worried that we can't stop it from falling

too fast. Well, it's marginally cooler. You're referring to probably CPI and PPI. I mean, is, yeah, marginally cool, but trending in the right direction, undoubtedly. And that's what matters more. We're not expecting some massive drop month over month or year over year at this point in those reads. But where we're going might be good enough to say, you know what, I think we could actually have this soft landing that some have been betting on. And then if that is the case, why not buy stocks finally? Yeah, I mean, it's still a possibility, right? I'm not completely counting that out. It's still a possibility that we get things down to a more manageable level in inflation. The labor market cools, but it's palatable. That's still possible. Well, isn't

that what's happening now? Yes. Not possible, but that is what's happening. That is the current state of affairs. Yes. Right. The concern is that that's always how it starts. And then it usually picks up steam. It's like a snowball rolling down a hill, right? It usually picks up steam as we go. So there's this concern that can we stop it before it becomes really a big problem? That's what I'm watching this week in these big moves. I think that not just the marginal cooling. Yes, that's a positive thing. But the fact that we missed expectations. So now we're not even sure that the expectations about inflation are going to be correct. And it starts to bubble up this fear that, oh, is it going, is it too much, right? Did it go down too far, too fast? And now are we looking at a situation where there's demand destruction? None of that's been

confirmed and it won't be confirmed for a while yet. So the market is in this purgatory state. And typically the market actually does hold up pretty well after the last hike and before the first cut. But as you near that first cut is when things get a lot more choppy. What if we don't need to get all the way down to 2%? Like James Gorman, the outgoing CEO of Morgan Stanley, was speaking to CNBC Asia and said, Is 2% absolutely necessary? My personal view is no, but directionally to be heading in that around 3%, I think it's a very acceptable outcome. What if he's right? What if he's right for the Fed, regardless of what the Fed

says? What if 3% at this point is acceptable for the time being? Well, the market's going to decide if it's acceptable and then the economic data is going to tell us if it's acceptable and if we can stop the bleeding at that point. I don't think the Fed is going to come out and say we've changed our target. I know there's been a lot of speculation about that. But the statement that Jerome Powell has made, I'm not going to quote him directly because I might screw it up, but it's something along the lines of a sustainable path toward 2% is what would satisfy them. So it doesn't mean that we have to hit 2% on the dot. Plus, we've got about four different inflation metrics that we look at. Every single one of

them isn't going to hit that at the same time. No, but isn't the market going to move well in advance of actually hitting the 2%? And maybe this is, the bulls would say, this is the beginning of that. And that's why they're looking at areas other than mega cap and saying, you know what, this is the moment. We had to wait a long time, whether it's the Russell, which has given some back today, obviously 1.3% it's down. But there are a lot of other areas of the market that were down because they were depressed from a cyclical standpoint, thinking that, you know what, I need to prepare for the worst. Yes. But then lift up the hood, look at what's happening today, right? Yields are down and the Russell 2000 is the worst index, the worst broad index that we're looking at. If there was some sort of cyclical resurgence and some optimism

that was well-deserved, small caps would be doing better than this today. Energy would be doing better than this today. So there's still at least just some disagreement in the market itself about whether or not this is sustainable and whether or not this is a positive economic signal. All right. So maybe a little bit of bad news being bad news in some parts of the market, right? If you have a weakening consumer and what you've heard out of Target and now Walmart and some others would lead you to believe, okay, maybe there are some cracks. Finally, that's going to hit demand. That's why oil's falling further. Make sense? It already has hit demand.

I don't think there's anybody that can say there's no evidence of a weakening consumer. There's no evidence of slowed spending. I think there's a lot of evidence of slowed spending. But then the bullish argument. From a high base. Exactly. And the bullish argument would be, well, we needed that to happen in order to bring inflation down. But the issue, again, is that you can't have it both ways.

You can't keep it strong and have a labor market start cooling and have companies trying to protect margins. In order to protect margins with dropping revenue, they have to cut costs. So that's going to start to hit the labor market either later this year, I would say probably more like early next year. And that's what makes consumers nervous. And then they pull back their spending more. So it's this feedback loop that has already started to happen. It's just a matter of can we plug the hole before everything starts rushing out. What happens if the Fed can cut somewhat around the time that the market expects?

Because they can, not because they have to. It's a non-zero probability, right? They could pull that off. I think it's getting less and less possible as time goes on. Even as inflation continues to come down to the degree it has? I mean, went from like 9.1 or 9.2 to 3.1 or 9.1 to 3.2, whatever it was. I mean, you get the point. It went down.

We're moving in that direction, right? Yeah. I think then this is a nuanced take on it. But the fact that we have pulled that first cut forward so rapidly, to me is a signal that the market already thinks the Fed is behind the eight ball on it. So I think they're already in this mode, they're beginning to be in this mode where they're going to look reactionary rather than being proactive about it, and we're choosing to just normalize policy. It's now going to look like, okay, we're reacting to data that's getting cooler faster than we thought it would. And we're going to have to cut sooner than we thought we

would. All right. Let's bring in CNBC contributor Joe Terranova of Virtus Partners Investment Partners. He's with us, too. Others might suggest, you know, Joe, they're they're cutting because they can and they're cutting because they should. And if the Fed's going to cut for whatever reason it's going to cut, that's just a positive. And you've got to get ahead of that. Just like when the Fed, you knew they were going to start tightening. You knew it was going to be bad for stocks. Yeah, well, I think what we've done this week is, first of all, we've understood that the Federal Reserve is done. The Federal Reserve is is done the Federal Reserve is done. The question about whether or not they're going to cut in

twenty twenty four. I think it's dependent upon as Liz has said what the economic data comes in at but listening to Liz and you're the conversation she's having with you. I mean it just makes me overwhelmingly want to own bonds and bonds are so

incredibly attractive right here. Because you are going to continue to see pressure on yields. You're going to continue to see a consumer that weakens. You're going to continue to hear commentary like you did from Walmart CEO Doug McMillan today on the earnings call where he said a deflation period is coming in the next several months. So you were talking about how quickly we've gone from thinking about raising rates to cutting rates. How quickly are we talking about inflation and then pivoting to talking towards deflation? Last point is crude oil is clearly messaging something to the market about the global economy weakening. It is not just the domestic economy, Scott. If you look at oil refinery out of China, you are beginning to see the refinery

runs are lower. The global oil demand is weakening. And the reality is for those like myself that are in the oil trade, you're looking towards the end of the month when opec plus meets and you're hoping that that meeting can save your position so i'm confused by something you said you you made what sounds like a hardy case for bonds over stocks whereas barclays today says stocks are more appealing than bonds at these levels you have been playing for a pretty good rally between now and the end of the year in stocks. What do you make of what Barclay says that stocks are now more appealing than bonds, which is the first time really you maybe could say that in an awfully long time, and square that with your view that the market's going to run? What do you mean? I think over the next six to nine months, bonds are more attractive than stocks.

I think stocks are bumping up right now against technical resistance. You mentioned the Russell 2000. The Russell 2000 hit its head on the 200-day moving average and stumbled back to the floor. The S&P 500 right now is in a consolidation range. While it's in that consolidation range, let's remember, we very quickly went from being oversold to now what being somewhat overbought. The S&P needs to hold 44.70. The S&P doesn't hold 44.70 technically. You're going to see a pullback to fill the gap down at 44.20. So fundamentally, what is the catalyst to take the S&P 500 above the highs from the other day, take the Russell above the 200-day moving average, and to challenge the high for the year back in July at 4,607? Are you asking what the catalyst is?

No, I know what it is. It's one word. NVIDIA. It's NVIDIA next Tuesday. And I don't like that type of binary setup where it just basically comes down to whether or not Nvidia is able to carry the market higher. I still think the market is... I got another word for you. Go ahead. What I think is more important than that. Positioning. What do you think about that?

In positioning. Positioning in Nvidia or positioning in the market itself? Positioning in the market itself positioning in the market itself i think a lot i think we're going to find out that a lot of the uh chase for performance catch-up work has been done this week i think there's still more to come but i don't think there's as much to come i think a lot of it has gone on already uh in the last several weeks so bonds liz you know the the bonds have already had a considerable move here because, you know, you said it in terms of where yields have dropped by a large amount in

a short period of time. Thus, price go up, yields go down. So bonds have already had a pretty good move that I think maybe has surprised a lot of people. Do you agree with Barclays that stocks are more appealing at this point than bonds? They say, and I didn't read the quote from them, they say, we expect the world economy to slow in 24, but in a fairly benign fashion, with low peak jobless rates and further declines in inflation in the major economies. It's not an outright soft landing, but it's distinctly soft-ish. That's why stocks are more appealing than bonds now. If the call is that there's no

big recession coming and that we're able to stomach higher for longer, then that would make stocks more attractive over the next 12 months because yields would sort of stabilize at a higher level and maybe stocks can climb if earnings come in the way that they're expected to come in. That's not the opinion that I would have about how I think things are going to play out. You think there's a recession coming? I think that there's more likely one coming than not. And whether soft landing or not, I mean, some people's definition of soft landing is a recession. So I get a little confused about what we're actually even talking about there.

But if you just look at the data that's going to come in, I think what's happening now, and again, this week I think was the pivot point, we went from talking about fundamentals of individual stocks to now we're going to continue talking more about macroeconomic risks, waiting for that first cut. What does contraction look like? What is the consumer doing for holiday spending? What's happening with oil demand?

It's going to be macro risks where everything becomes actually more correlated to each other. So if that happens, then every time we get a cool macro data print, I think yields are going to come down even further. The cuts will get pulled forward again. I won't be surprised if by the end of this year, the first cut is priced in for March if we continue to get cool data. So I think that bonds are more attractive just because of that, just because of the effect that it's having on yields every time we get confirmation that the economy is cooling.

Yeah, but you said that that only works, though, if you think a recession is coming. In a no recession environment, you said stocks are going to outperform bonds over the next 12 months. You looking for a recession? No. Why do we have to have a recession? Why can't we just have a significant deceleration in the economic trend? That's all you need. Then why do you suggest that bonds are better than stocks? Because I think, given the performance so far that you've had year to date in the equity market, up 17% for the S&P, up 30% for the NASDAQ. I'm not talking about for the next six weeks.

I'm talking for the next 12 months. I clearly said over the next six to nine months, I think bonds are more attractive than equities. I stand by that statement. Given the performance you've had in 2023, the word you use is rebalance. You rebalance out of... Not completely out of what? Let me finish my thought. You rebalance out of equities into bonds based on the fact that this year you've seen strong price performance in

equities you haven't had that in bonds if you have though if you have the economic contraction in 2024 bonds will get you 10 percent but you haven't had strong price reaction in equities outside of seven names what about the rest of the market done next to nothing listen if you buy if you bought the index the s&p 500 is up nothing. Listen, if you bought the index, the S&P 500 is up 17%. Yeah, I know. But you know what my point is. You've got seven stocks. You've had a very concentrated performance. You're talking as if the huge gain in the S&P is because, well, the market's just done great. Well, it really hasn't. It hasn't. When you're measuring the performance of stocks versus bonds,

Scott, you look at the S&P relative to the aggregate bond index. That's what you look at. I understand what you're saying about the concentrated nature. So the requirement in your statement in 2024 means that small caps and cyclical stocks have to come roaring forward and really have a strong price return to beat bonds. Wouldn't they if it became clear we weren't going to have a recession? What do you think, they're just going to be depressed forever? I don't want to get caught up in the are we having a recession or not having it.

I just know the trend for the economy is going to decelerate. And I just, I see it within the market. I hear it on the earnings conference calls. The consumer is getting more cost conscious. You're beginning to see it in the housing market as well. The trend for the economy is going to go lower. If it goes into recession, I'm sorry, I'm not smart enough to know that. I mean, but I think that is the thesis, right? Maybe we need some more clarity from Barclays on what their actual thesis is. But I think that is the thesis, right? Maybe we need some more clarity from Barclays on what their actual thesis is. But I think that is the idea, is that the average stock comes up to meet the other seven, right?

And that would drive a resurgence in equity prices and then stocks could outperform bonds. But to me, the big factor there is that only happens if we confirm that we're not having a recession. So not only do I think it's more likely we have one, but I also think that the question about whether or not we're going to have one is going to persist for a while. So we're not going to have an answer that drives that thesis for, I think, months. So for Barclays to be right in 2024, I think the correct statement is small caps will outperform bonds in 2024. I'd be remarkably surprised if we're sitting here one year from now and you're saying, Joe, you said bonds are going to outperform. Look at the market. And it's the same mega caps that gave you the performance once again.

I just don't see that. It would have to be early cycle market behavior in order for that to come true. Yeah. Jonathan Krinsky, by the way, today is talking about being at the, asking the question whether we're at the bad news is bad news inflection point. Right. That's kind of what we were talking about earlier. Not yet. But I think we're getting there. So I think this week, again, is the pivot point where if bad news starts to come in, you know, if the next inflation print is below expectations again,

if yields fall again, then yes, I think before the end of the year, we're at bad news is bad news. Because then it's like, whoa, whoa, whoa, we were okay with everything cooling, but now it's cooling too fast and we're nervous. So I think we're teetering on that edge right now. But it's not, we're not there yet. Okay, we'll leave it there. Liz, thank you, as always. Liz Young.

Joe, you're back in the zone, in the MZ. All right. Let's get the question of the day. How much more can the S&P rally before the end of the year? Less than 5%, more than 5%, or as much as 10%, as Jeremy Siegel suggested, maybe was in the cards. You can head to at CNBC closing bell on X to vote. We have all the results a little later on in the hour. Now let's get a check on some top stocks to watch as we head into the close.

Christina Partsinevelos is here with that. Christina. Let's start with U.S. listed shares of Alibaba falling today after the Chinese internet company scrapped plans for a spinoff of its cloud business. Alibaba citing U.S. chip restrictions as the main reason for reversing course. Shares are down almost 10 percent so far and about 11 percent year to date. On the chip front, Intel shares are actually in the green today after an upgrade from Japanese bank Mizuho. The bank is bullish on Intel's foundry business, also known as its manufacturing business, and says the chipmaker compares favorable to its peers like NVIDIA as

well as AMD. Intel shares hitting the highest level in over a year today, up 6 percent, trading at 43.10. Scott. All right. We'll see you in just a bit. Christina, thank you. Christina Parts and Nevelis. We're just getting started here. Up next, stocks rallying this week on hopes that cooling inflation keeps the Fed on hold for good. And our next guest says that falling yields can fuel further gains from here. Merrill Wealth Management's Lindsay Hans will be here at Post 9 to make her case. We are live from the New York Stock Exchange, and you're watching Closing Bell on CNBC. Welcome back. Stocks lower today.

Investors deciding whether this week's cooler-than-expected inflation data clears the path higher for the market. Joining us now for her first television interview is Lindsay Hans, president and co-head of Merrill Wealth Management, a role she assumed earlier this year. It's great to meet you. Welcome to our show. Thank you, Scott. It's so good to be here. Congrats on the role. Thank you. So this is the central question here, right? We've had this incredible move in the market. Now what? Yeah. So our research team is thinking about a couple of things, Scott. We're looking at equity market rally likely to continue as bond yields we think have peaked. OK. We are squarely in the soft landing camp and we see an economic slowdown in the back half of next year. And then there's the Fed. So we're looking

closely at spending data. And through Bank of America, we have incredible insights into consumers. We bank 66 million consumers at Bank of America. So we can look pretty closely at what they're doing. We're seeing their credit card spending starting to come down a bit. We're seeing delinquencies tick up a little bit. A little bit. And we're seeing mortgage payments obviously a lot higher. I mean, average were probably 10 percent up from last year. So that's impacting financial conditions. Loans are obviously less in demand than they were. So all of that puts us as, you know, the Fed's likely done. Maybe there's one more. But, you know, we're near the end. I don't want to pin you to a calendar date, obviously. But when you say that, you know, the equity rally can continue, are we talking

about beyond the end of the year? If you think we're firmly in the soft landing camp and the Fed is likely done and the economy holds in, as you say, until the end of next year, that runway sounds sort of long. Yeah, we think the economic slowdown really starts next summer. So we think, you know, equities have some more room to run from here. When you say it, do you mean that we're going to eventually have a recession because it starts to slow next summer or you do? Yeah, we do. Okay, so we're soft landing for now. Yes, exactly. I got you. Yes. What about the idea of competition for equity? So how do you look at that? Because I feel like that debate is now percolating again, where there

kind of was no competition for some. Now it's bonds versus stocks. Maybe stocks are more attractive. How do you answer that? Yeah, so I think what we have to think about, just for us in wealth management specifically, one, during times of volatility, that is when our advisors are of most value because clients need our help to help them make sense of that. There's a difference between information that's thrown at them and insight and advice and guidance. So in our business in wealth management, Eric Schimpf and I, who co-head Merrill Lynch, have the opportunity to lead the most talented advisors we believe in the country. And what they do best, Scott, is really sit on the same side of the table with the client and say, listen, we're going to work through your personal

situation, which could be very different from mine, and look across the table at a suite of options and say, here's what we think makes sense for you. So it's going to be really different in wealth management, depending on the client and depending on the client's specific goals. Sure. But just to play off that a little bit, I mean, I could feel, you know, a lot of handholding, so to speak, over the last, you know, 18 months. But now it feels like it might be turning. At least the narrative feels like it might be changing. Do we go from handholding to say, you know, maybe put your feet into the market a little bit more than you might have had? Yeah. So if we look at our client trends, specifically in wealth management, first off, our clients' cash. So when we look at what's sitting in brokerage cash,

could be CDs, could be money market funds, short-term treasuries, we're at levels three times of what we were before the Fed started raising rates. Oh, I couldn't believe it. But we've seen that really level off. We have not seen that grow. In fact, over the last several months, we've seen clients start to move more into fixed income. So, when you look at some of our biggest flows and our product offerings within our CIO office

and our open architecture platform, you see quite a bit of flows going into our bond ladders that are managed by our CIO office and our separately managed account, like fixed income managers. So that tells us that people are legging in, they're locking in yields, and obviously we're starting to see some money move

back into equities. Also seeing clients of interest with alternative investments. More and more clients are wanting access to private markets in the wealth management space. And things like that. We've been following that a lot too, in terms of the makeup of the typical portfolio in the future is not necessarily going to be 60-40.

Maybe it's a little bit less here and a little bit into alternatives the way that people didn't have access or insight or knowledge about before. And now there's a whole suite of different kinds of products. The alternative space has innovated tremendously. Our alternatives assets at Merrill in clients' hands have doubled in the past five years. And that's just innovation. There's evergreen products now available and clients are just looking for that access that they're getting. We're also seeing clients very interested in tax efficiency. So they're looking at active ways to tax efficient manage their portfolio. And we do that again through our CIO office. And that's really,

Scott, part of the wealth management process. Clients, you know, they want insight, they want guidance, but they want things that are personalized to them. And that's what our advisors do so well. They want that holistic advice. You said something that made me think of, you know, when you said, so you'd had all this money in money markets, you know, three times as much as you would before the Fed was hiking rates, for example. And now you see a pickup in some fixed income. It's like a, feels like a two-step process to get in. It's like, okay, got to get the cash out of the cash, put the cash into bonds, fixed income, and then go into equities.

What's the moment that that happens? What is it? Well, it's really, you know, it's really different depending on the client. Clients have different risk tolerances. They have different goals. We have clients at different stages of their life, different wealth. We do not come at clients with one set allocation. That's really, again, where the advisor needs to be working with the client.

And there's really two factors at play. What's changed in the world? How do we feel about that? How do you feel about that as a client? And how has that changed or not changed your financial plan that we work together on, which is not a, you know, build it and put it away on the shelf. It's an ongoing process. Yeah, it's definitely not a one size fits all thing. So, yeah, it just really depends on each client.'s had this incredible run. Everything else really hasn't. How do you view that and where we should be in a new year? Yeah. So when we look at, you know, we talk with our folks in research,

we've got industry leading research partners. They look at a couple of sectors. They look at tech, specifically the mega cap space. They look at energy in terms of solid free cashflow. They look at industrials, specifically aerospace and defense. So those are some of the sectors that they're talking most about right now. Yeah, because, I mean, energy is obviously suffering a bit. We were just talking about, you know, oil below 73. The sector is the worst. And I think there's a considerable conversation now about looking outside of the names and the lights

from the mega cap and thinking that if you're right, soft landing, or at least the economy holds in thinking that if you're right, soft landing, or at least the economy holds in for the better part of 2024, then maybe you do have a pickup in those areas. Yeah, that's right. All right. Well, it's good visiting with you. Thanks for being here. It's great to be here. Thanks for having me, Scott. Okay. Our pleasure. Lindsay Hans, Merrill Wealth Management, the president of GoHead. Straight ahead, tech stocks hitting a record high yet again today. The sector now approaching a 50, 5-0 percent gain on the year. EMJ's Eric

Jackson joins us next. We'll get his top plays there, whether tech can continue to lead the market again in the new year. Closing bells right back. Welcome back. The start of a new tech bull market. That is how my next guest sees the current market set up with the tech sector up almost 2% so far this week. Joining me now to discuss, Eric Jackson, EMJ Capital founder and president. Welcome back. Good to see you. I mean, haven't we already been in a tech bull market? It doesn't feel that way.

If you've been investing in any tech stocks outside of the Magnificent Seven. You've been in the wrong ones. The Mag 7 has been amazing this year, but for everybody else, including non-tech, 2023 has been, you know, a so-so year after a disastrous 2022. Are we talking about, like, higher growth, higher valuation tech? No question. No question. Full market for those stocks? For everything across the board.

Nothing can happen without the Russell participating in this. Even though Russell is not necessarily tech, I don't think anything outside of the MAG-7 in tech can work unless the Russell works as well. And as you know, on Tuesday was a very significant day for the Russell. It finished almost up 6% on the day. Yeah, it was astonishing. It's a four standard deviation move. There was only one other time in the history of the Russell where it's that kind of move.

And I just don't think you can wave your hands and say that's just another day. I think it was a page turner. I think it's the start of a new rally for the market. I know, but aren't we going back to earlier chapters, so to speak? If you want to do the page turner thing, it's down 1.3% today. It had that incredible day, but that's kind of it. Well, last I checked, the last five days, Russell's up something like 5%. Nasdaq's up 4%.

S&P, I think, is up 3% for the last five days. ARK is up 7.5% in the last five days. Well, because yields have come down. Yeah, well, this is what I'm saying. It's hard sometimes, Scott, in the moment to recognize when something has significantly changed. I think there was a tremor on Tuesday and things have changed. The Fed has done a Puxatani Powell, gone back into the hibernation for, I think, the next six years. And that's how the market's taking it. Yields are, you know, day after day on the decline, on the retreat.

And it's time to recognize that that's going to lead to a brand new chapter in the market. So yields have peaked. I think, yeah, it's a matter of waiting for the cuts to come. When do you think those are coming? Whether in March, whether in July, I mean... Does it matter for your... It doesn't matter. It doesn't matter for your view.

It doesn't matter. You don't need the Fed to cut for your new bull market for those kinds of stocks to work? No, because we didn't need the Fed to hike for a lot of smid cap tech names to start to go in the tank in February 2021 is when it started. You know, there's something really interesting. tech. And you lay that on top of a six-year chart of NASDAQ during the dot-com era. It's kind of eerie the way that they mirror each other. Huge peaks and then huge declines. NASDAQ declined 77% from its peak in the dot-com era. ARK was down at its lowest 80%. But what's really interesting to me is that it took two and a half years for NASDAQ to fully decline after the dotcom peak. Last month, we just passed the two and a half year anniversary of ARK's peak in February of 2021.

So you think it's bottomed. NVIDIA, that's your top name? Top large cap name. And obviously, all eyes are going to be on next week. What do you think happens? I mean, you know, I don't know if you heard Joe Terranova up here earlier suggesting that the, you know, the next move of the market, so to speak, hangs on NVIDIA and those earnings next week. We've come a long way. There's really no other catalyst. The Fed speak is whatever.

What do you think about that? I think it's important. It's a gorilla in the tech, in the Mac 7 for sure. Does it hang on it? I mean, the market can continue to do well, just like we've sort of muddled through the tech earnings so far, you know, just because, you know, one of the names has a disappointing name. You know, suddenly it rebounds a few days later. But I think NVIDIA will have a good report.

I think it's only expensive if you think when they raised, you know, their guidance by $7 billion over consensus like they did in May, if you think that was a one-off, then it's expensive. If you think that was a sign of a secular shift and a lot of enterprises are getting into AI and building applications and models that are going to use their chips and it's going to continue beyond just one quarter, then the stock is cheap and it can't work. What about Apple? Man, it's been a good comeback, right? Now it's pushing 190.

Unbelievable comeback. When you say, is the market going to tank if Nvidia has bad earnings? Apple's a great example. One day after Apple's earnings, thought the thing was ready to be left for dead, and it's gone straight up pretty much ever since. I think Apple is still cheap. It's one of the names that I also like in the Mag 7, along with Meta and Tesla, which I own all four.

I think Apple can still work. It's an iPhone story. It's a services story. People are still buying this thing, and they will, and they'll continue to spend money on the Apple platform. Good seeing you again. Thanks for being here. Derek Jackson joining us here at Post 9.

Up next, we track the biggest movers into the close. Christina Partsenevelos back with that. Christina. We got another retailer warning of a hesitant consumer and a new 200 million share buyback program for Sonos. I'll explain the details next. We're about 15 away from the closing bell. Let's get back to Christina Partsenevelos now for the key stocks to watch. Christina. Well, shares of speaker maker Sonos are soaring today, despite the top and bottom line disappointment. Investors seem to be focused on the share buyback program, as well as comments from CEO Patrick Spence, who promised the company would be entering into, quote, a new multi-billion dollar category in the second half of fiscal 2024, without actually revealing that category.

But it's largely widely believed to be headphones. Separately, Bloomberg reporting that Sonos plans to cut more jobs, but no word on which department and the number. Williams-Sonoma shares moving higher in an earnings beat, the highest level actually since August 2022. You can see shares up over 6%. The company also reporting a record operating margin, signaling a healthy return on sales for the company, even though management did note of, quote, ongoing consumer hesitancy.

Scott. All right. Christina, thanks. Christina Partsenevelos. Last chance now to weigh in on our question of the day. We asked how much more can the S&P rally before the end of the year? Less than 5%, more than 5%, or as much as 10%? Well, I'm kind of surprised we have as many votes for as much as 10%, but all right.

We'll give you the results after the break. Well, I'm kind of surprised we have as many votes for as much as 10%, but all right. We'll give you the results after the break. The results of our question of the day, we asked how much more can the S&P 500 rally before the end of the year? Most of you said less than 5%. Got a lot of votes on all of those, though. Thanks for voting, as always. Coming up, Amazon making a big move into the auto space. Well, that's sending Carvana shares lower. Plus, retail's big week rolls on. Gap and Ross stores reporting earnings in OT. We'll tell you about it when we take inside the market zone. All right, we're now in the closing bell market zone.

Virtus Investments, Joe Terranova back with us here to break down the crucial moments of the trading day. Plus, Phil LeBeau on what Amazon's push into the car space means for those stocks. And Courtney Reagan watching two key retail earnings out today in OT. Joe T., looks like we're going to hold on to $4,500 in the S&P, which is a good line to keep an eye on in the days ahead. It is.

So this is what's known as a bull flag pattern. Holding $4,470 means that you could accelerate higher. By the way, I think 7%, that's what we get for the remainder of the year. If I was voting in your poll. 7%? So more than 5%. More than 5%. I didn't give 7% as an option, but more than 5% covers you.

Well, you know, I've got to be difficult sometimes. But, no, this is a nice bull pattern. I agree with what Eric said before, which is that we need the Russell to participate. We need the Russell to participate. Got a little bit of an uncomfortable pullback right now. You want to reverse that quickly. Well, he said it was going to. And those other stocks, like the other tech stocks, were going to go on a big run. He said new bull market for those. Do you agree with that?

That's more of, I think, a prove-it situation. Got a nice little start today with Intel up 6%. Yeah. How about energy? How about energy? You're overweight by a good amount in that space. Look, you've said that this is make it or break it for these stocks, right? So far, it's break it. What reverse is this? So the way that I see this sector right now, first of all, let's be clear on something. The spot price of oil is down 10% month to date. Energy equities are only down 3%. So that's good. Quarter to date, I think it's down

19%. Energy equities down 9%. But here's the setup and here's a little bit of the troublesome situation for investors. Most speculators are long energy. What are they going to do? Are they going to bail out now? No. They're going to wait for the OPEC plus meeting at the end of the month, right? So there's a lot of pressure for something to come out of that OPEC plus meeting to reverse right now crude oil prices, which are at the lowest level since July. All right. So let's take on NVIDIA, because when you look at catalysts that are out there to, you know, either help confirm the move that we've had or take us to the next level, that's the one you say, I think it's on the 21st. Yes. The earnings.

So NVIDIA is next Tuesday afternoon, I believe. Look, it's trading right up near the 502 all-time high. It wants to go through the all-time high. I think it will go through the all-time high. It wants to go through the all-time high. I think it will go through the all-time high. NVIDIA has to just come out next week with confidence to let the marketplace know that the revenue growth that they've seen in 2023 can be sustained over the coming four to six quarters. Is there any reason to believe that it won't? Are you swayed at all? No, they've delivered. They've delivered so far. But I know, but now you have Microsoft talking about a new chip yesterday.

Right. You know, they think they're not going to be or have to be as reliant in the big picture as they otherwise would be on companies like NVIDIA. I still see all these mega cap giants having a strong year with their stock price, flush with cash, and therefore spending on generative AI. And if they're spending on generative AI, NVIDIA is the winner. All right. Speaking of mega caps, Amazon, talking about the car game. Phil LeBeau, what's at stake here? Quite a bit, Scott. If Amazon and Hyundai can show that, look, we can make a real dent in terms of

online auto sales, well, this is a partnership that you could probably see others trying to replicate with Amazon in the future as well. Here is the announcement that came out earlier today. In fact, we talked to Jose Munoz, CEO of Hyundai North America about it. Customers will be able to order vehicles directly on an Amazon website. They're Hyundai vehicles through Amazon. Pricing features, all of that will be done online. The vehicles then will either be delivered to the customers or delivered through local dealerships. Can't get rid of the dealer completely here, but it will streamline the process. At least Hyundai believes that this is a move that will pay off. Now, they're going to start in the first quarter. I'm not expecting big numbers right away,

but as you take a look at shares of Hyundai, keep this in mind, Scott. We've seen with Tesla, we're seeing with Rivian, and increasingly, I think we'll see with other automakers, people are more comfortable ordering vehicles online. They do it on the used market. You see that already. Carvana is a good example of that. And increasingly, I think we're going to see it on the new side of the market as well. Scott? Bill, thank you. Should let everybody know, too, that the CEO of Carvana is going to be on overtime in just a little bit to cover that story. And that's, as I said, in the next hour.

Courtney Reagan, so big week for retail. We've got the biggest names already reporting, but we do have Gap and Ross to look forward to. Yeah, and Gap is obviously a big international apparel retailer. It's the first quarter, in fact, that Gap will report under new CEO Richard Dixon. He came from Mattel, remember. The retailer expected to post a profit of 20 cents, but on falling sales, comps expected to fall nearly 9%. While profitability has improved thanks to better inventory management, cost cuts, sales are still concerning across the brands. Last quarter, the retailer was most concerned about the pressures being felt by the old Navy customer. So investors are curious to see if Gap's apparel sales are more in line with what TJ Maxx saw,

which were, quote, very strong, according to the CEO, or Target's, which were weak, but at least not as bad as the prior quarter. Shares are up 33% for Gap in just the last three months. It's actually one of the strongest retail performances in that time frame. Of course, coming off kind of a low base there that has sold off precipitously. Ross stores also reports here after the bell and after TGX's results, investors have higher expectations for Ross, perhaps than other retailers this quarter. They also put up a strong quarter last time around. Ross comparable sales expected to grow 3%. And the off price

concept has proven to really buck these weaker trends that other apparel players have seen, as this treasure hunt still seems to really resonate with deal-seeking shoppers. Ross shares up 6% in three months, well outperforming the XRT over that same time period, but not nearly the performance that Gap has seen. Scott? Yeah. All right, Court, we'll see you in OT. Courtney Reagan, what's your takeaway thus far, Joe, from consumer, whether it is the target numbers or maybe more interesting, the commentary, along with Walmart, talking about what the holidays might bring, and then looking ahead to either Gap, Ross, or anything else on your mind? There's a strong degree of complexity. Costco, Dollar Tree, both down today off of the Walmart numbers. Ross Store is going to have to

come in with sales growth at 5%, not 3%. They're going to need 5% because the expectations are so high. If you're going to beat in retail, you're doing it with strong operational management. The consumer is not given the condition that it's in right now where it's going to be cost conscious. The consumer is not going to get you over the goal line. What do you have now? You have Lulu. is that it? What else do you got? I have Lulu. I have TJX. I have Ross Store. I have Costco.

Oh, you do have Ross Store. I have Ross Store. And you're feeling all right? 52 week high just a couple of days ago, but the expectations are high. So they're going to need to exceed those expectations or they're going to have a similar response to what TJX had. I still think you buy the weakness in TJX. I still think you buy the weakness in Ross Store. What other area of the market are you most interested in right now,

beyond what everybody else is talking about? What's sort of looking maybe different to you today than it's looked in weeks? Look, I'm going to just discuss real quick volatility for one second, because I think volatility is suggesting the bears are not gone just yet. Remember, September 15th was the low for the VIX at $12.95. The VIX is 14, right? We're still at 14. So what that means is there still are puts that are being bought. That means bears still have concern about the market overall. Well, I told you the other day, I mean, one of the interesting dynamics that, you know, you've got the bulls one side, bears on one side. I don't care what really happens for the foreseeable future. No one's getting off their perch for

the most part. No, no. You could make a strong argument in either direction right now, but price is telling you the bulls are right. Like a hardy bull or a hardy bear, you're keeping your seat. All right, Joe, I appreciate you being here. All right, I said we're going to hold on to $4,500 in the S&P. In fact, we are, but we do have those earnings coming up. I'll see you tomorrow.

I'll send it in to OT. There's the bell. With Morgan Brennan and John Ford.