Closing Bell - Closing Bell 11/30/22

Episode Date: November 30, 2022

From the open to the close, "Closing Bell" has you covered. From what’s driving market moves to how investors are reacting, Closing Bell guides listeners through each trading session and brings to you some of the biggest names in business.

Stocks reversing earlier losses this afternoon, getting a big boost during Fed Chair Powell's speech where he signaled smaller rate hikes ahead. This is the make or break hour for your money. Welcome everyone to Closing Bell. I'm Sarah Eisen. Coming to you live today from CNBC's CFO Council Summit in Washington, D.C. Take a look at where we stand right now in the market. Quite a rally up more than 400 points on the Dow. The S&P 500 up 2%. The Nasdaq comp is zooming. It's up 3%. Some of the hardest hit parts of the market all year long, like technology, are leading right now. You've got the ARK Innovation Fund, for instance, which has sort of been a poster child for this bear market. It's up 5% right now. Take a look at the action in the 10-year yield following

Fed Chair Powell's speech. and you can really see the turnaround cross assets where yields move lower, buying of bonds on that signal of lower interest rate hikes ahead after we started the day with higher yields and stocks under pressure. Coming up on the show this hour, businessman and investor Glenn Hutchins, who introduced Chair Powell at today's speech at the Brookings Institution, will get his biggest takeaways from those remarks. Plus, the chief financial officer of Chevron is here at CNBC's CFO Council Summit. He's going to join us with the outlook for oil prices, with that stock up a whopping 50 percent on the year. Let's start with the market dashboard, though. As always, senior markets commentator Mike Santoli here to break down these moves. Was this just about positioning, Mike? Because if you listen to what the Fed chair

said, it wasn't anything groundbreaking. I guess he talked about smaller hikes for December really explicitly for the first time, but then said there's a lot more work to do on inflation. Yes, Sarah, there's no doubt that the market was pretty clenched up going into these remarks. And I agree with you. The overall message was very consistent with what he said on November 2nd after the last Fed meeting. But I think he declined to take the opportunity to up the ante that much more and to appear that much more hawkish as the market has actually appreciated since then, as financial conditions have eased. So I think that there was essentially a blow that didn't come and the market is reacting to that. Now, where does it take us? Interestingly, right back to last Friday's high. So we had this two days where the market backed off and we've been in what we've been talking

about as this sort of slow kind of sideways chopping phase since we got that pop a couple of weeks ago. And it hasn't really jeopardized the uptrend. It sort of kept that CPI related rally intact. And so it's more or less been a wait and see. And now the market doesn't always wait and see for a specific catalyst. But this time it definitely did. Like I said, up to about 40, 40 or so, 40, 30s in that area. That is where we topped out for this move. So it's coming in an interesting spot because this is a line that how many times am I going to draw this one? Right. That's the downtrend line for the entire year. And we're right there. So you can overshoot that and see if it actually holds from this point on. You've got some positive seasonal factors now. A lot of talk with Powell about the job market,

specifically the job openings factor. He's been looking at job openings and the possibility that the tightening campaign can bring openings down and maybe not cause a big jump in employment. This is part of today's JOLTS report. Now, that's the job openings labor turnover survey. And this is the quit rate, the percentage of all people in the labor force, essentially all people employed that quit last month. It's down about two point six percent. As you can see, it's off sharply, but still well above pre-pandemic levels. So it still shows you a very tight and healthy labor market going in the right direction. This is the balance that he faces right now, where things are softening up, but still showing relative strength out there.

And this is a cleaner number, perhaps, than overall job openings, which are just easy for companies to keep openings just listed out there on the market, Sarah. Well, right. Mike, talk about the mixed signals on the economy. Look at the batch of data that we got today. So we got weaker Chicago manufacturing, PMI, weaker ADP jobs, especially in manufacturing, where we lost 100,000 jobs. And yet the GDP revised higher, both business and consumer spending for the third quarter. And that fourth quarter GDP tracker continues to trend up. So it really is a mixed picture. It's very mixed, Sarah, but also somewhat consistent with the goods part of the economy cooling off significantly from an overheated state. And that's where manufacturing employment comes in and all the rest.

Yet the overall economy, you know, travel, services and incomes have remained pretty strong. So that's the nuance you have to have in trying to analyze where we go from here. Yeah. Set to end higher for a second month in a row. First time we've seen that all year long. Mike Santoli, stay close. Thank you. So here are the words from the Fed chair, Fed chair Powell, that brought the stock market into this late day rally. Listen. Monetary policy affects the economy and inflation with uncertain lags, and the full effects of our rapid tightening so far are yet to be felt. Thus, it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down. The time for moderating the pace of rate increases may come as soon as the December meeting.

Bam. Joining us now is North Island Chairman Silver Lake co-founder, AT&T board member Glenn Hutchins, who introduced Chair Powell at the Brookings Institution today. Glenn, clearly the market likes the sound of moderation when it comes to interest rate hikes. What was your impression of Powell today? Hello, Sarah. So I would say a couple of things. One is it was really, we were really happy to have Chairman Powell at Brookings when we set up the Hutchins Center here on fiscal and monetary policy. This was precisely the role we had hoped it would play. And also speaking as co-chair of Brookings, it was a very good day for Brookings to have the chair here.

To answer your question, I think Mike Santoli got it largely, not entirely right. But I would say in addition to the moderation point, Jay also made a duration point, which is the moderation point people are focused on. Seems to have the market rallying. Doesn't seem any reason to doubt a 50 basis point increase in December, but then kind of moderating the pace after that. But he did also say that it might have to stay higher at those kind of levels for longer in order to get inflation down. And I think Mike's analysis of the heart of Jay's speech, which focused on the labor markets, is really important, another important takeaway from this. Jay emphasized that the supply of labor is not something the Fed has tools to

deal with, except very indirectly through constricting demand, which constricts supply of labor or demand for labor. He talked about how high the job openings number is and how low the size of the labor force is, and now the labor force participation rate hasn't increased. So it's very clearly the place where the Fed is looking to find a path to moderating inflation. And the part that they find the most stubborn is in the labor markets. Right. So I think that was an important part of the message. The other thing which I thought was interesting was that he focused on, he did say that he thought we could get, quote-unquote, a soft-ish landing.

My operating assumption, which I've offered you on CNBC before, is I think we have to expect some degree of a recession. Markets seem to be expecting a recession. The yield curve suggests a recession. But he had some degree of optimism that he that they could manage this by managing job by getting job openings down without unemployment spiking into a place that was softish, which might which he defined, I think, is not a severe recession. That was a note of optimism, too. I think that people might have missed. But, Glenn, the whole issue with the labor market and how they don't have control over labor supply and these inflation numbers can continue to run hot, doesn't it present a big risk to you as an investor that they're going to overdo it?

Well, that's exactly the concern. Not that they were overdue it. The other thing I thought was interesting is in this was that's the moderation point, which is he did say that Fed policy works with lags, uncertain lags, and part of moderating increases from here is to see what effect these rates have on the economy. So this was very much a speech that was about not overdoing it. He also said at the end that he was skeptical about models and that he was they were more he and his colleagues were more trying to feel their way to the to the right the outcome they're seeking so I don't think they're going to let you know the pure mathematical analytics drive them which

I thought was a very good message as well so it felt like they were trying to find their way to a moderated soft-ish to use his word landing outcome and had that very much on their minds. I think it was very positive. So when do you think they're going to pause? I think what he, I don't, all I know is what he said and what he said was, you know, as soon as December. Well, no, moderate, moderate, make a smaller interest rate hikes. But I'm wondering when they'll have to stop altogether because either there's too much damage to the economy or inflation has come down substantially. Well, I think it sounded to me, again, I'm not an expert Fed watcher here,

but it sounded to me like he was saying that the December increase was one they would sit with for a while as they watched what the effect was on the economy and that he was signaling that the main thing they're worried about were labor markets what's your sense on their mandate yeah no absolutely and it's a good point and they're and they're getting hammered by increasing an increasing amount of democrats on that part of their mandate uh for not for for basically destroying what is a very healthy jobs market. So what's your sense on on underlying economy? You said you're expecting a recession? You know, so as I've said on on CNBC before, by the way, there's no evidence as yet they've

destroyed a healthy economy. Unemployment, I think, is at three point seven percent. There are four million there are four million fewer people in the labor force. There's a huge than we might need. There's a huge amount of job openings. There's no sense that this economy, quote unquote, has been destroyed yet, by the way. But I've said- The housing market is getting destroyed a little bit here. Pending home sales down 37% from last year.

Yeah, that was the point. But they're up 10.6% over the year, though down in the last three months. But no, that was one of the points that Mike Santoli was making, which was one of the points that Mike Santoli was making, which was that the inflation is coming out of the goods economy, and it seems to be happening in the interest rate sensitive areas, which you would expect like housing. That's kind of part of what I think the markets expect. Again, the question is, can we moderate wage increases to get to a

place where you can actually begin to bring interest rates back down again. But as I've said before, my operating assumption for the last six months has been that we probably have to expect a mild recession of some duration as we get inflation out of the economy, because the sources of inflation, like labor markets, but also like deglobalization and decarbonization, are ones that the Fed doesn't have direct tools to to go after. And so the only thing they can do is reduce demand in a very in a very sledgehammer kind of way. And so so it feels to me. So that's been my operating assumption. But on on that's not a forecast. And on either side of that, there's scenarios for worse times because rates spike and we enter into some sort of more serious recession.

He seemed to be mindful of that, so I doubt they're going to make that mistake. And there's another one which you get into what they call a softish landing. And I just like the fact that they're focused on how they can accomplish that. and that one of the paths they seem to be talking about today to get there was to moderate rate increases in the near term and then watch the economy in the short term to make sure they don't overdo it. Yeah, you're not alone. The market, you like it, the market likes it. We're up 2.2% right now on the S&P off those comments. Glenn, what about your own business?

I was very interested to ask you, as someone who just raised another fund for crypto, given everything going on, I don't think FTX is one of your investments, but how damaged the ecosystem and your belief, frankly, is in everything that's happened? Well, so Jay got a question today. It's a very good question, Sarah. Thank you. Jay got a question today about would innovation in the startup economy and among entrepreneurs in general help to moderate some of the effect of labor? And he said, of course. That's one of the things that always happens in this economy. So I think we have to understand, regardless of what happens with Fed policy or with crypto collapse, that there still continues to be a lot of innovation. I think one of the important areas for innovation is in crypto it's not the only one but it's one of them uh and

um you know the the there's a lot of talk in the monetary policy world today about the late 70s early 80s when um it was the last time the fed was really increasing rates to take inflation out of the economy uh and during that time period as as I pointed out, Apple and Microsoft were both founded, so if you stopped investing in innovation, then you would have missed two of the great investments of all time. Similarly, 1999, 2000, the time period when the dot-cons collapsed, perhaps not unlike today where the crypto companies have collapsed. Apple, I'm sorry, Amazon, Google, and Netflix were just getting started.

A whole range of companies from Meta, Facebook, to Uber hadn't even been founded yet. So there continues to be, during these periods of market collapse and economic volatility, an entrepreneurial economy that continues to invest, continues to build companies, continues to create new products and services, and I continue to invest in those. So your faith hasn't been shaken in crypto? My faith hasn't been shaken in crypto. My faith hasn't been shaken in innovation.

Okay, Glenn Hutchins, great to talk to you today. Thank you so much for joining us. Thank you. After that Powell speech. Appreciate it. By the way, speaking of crypto, don't miss the interview that has all of Wall Street buzzing. Sam Bankman-Fried will be joining my colleague Andrew Ross Sorkin at the Dealbook Summit at 5 p.m. Eastern today. You can watch it on CNBC. Up next, Biogen and Japanese pharma company Acai are both moving higher today following the publication of those trial results for their Alzheimer's therapy. Up next, the U.S. CEO of Acai joins

us to break down those results and address concerns about potential side effects. We are at session highs right now, 45 minutes till the close. The S&P 500 up 2.2 percent, led by communication services, technology, and consumer discretionary. We'll be right back. Check out shares of Acai and Biogen. They're both moving higher today on the back of new details released on the phase three trial of their experimental Alzheimer's drug. The results, which were published in the New England Journal of Medicine, showed a moderate slowdown in cognitive decline, but also serious side effects of brain bleeding and swelling for some patients. I spoke with A-Size U.S. CEO Ivan Chung back in September when the company announced high-level results of the study.

Shares of the company are up more than 50% since then. Ivan is back with us again now. Ivan, it's great to have you. Everyone was waiting for these peer-reviewed data. Does it show anything materially different than what we got in September, which caused a lot of optimism? Thank you for having me again, Sarah. As you mentioned, the detailed data published in the New England Journal of Medicine, as well as the presentations yesterday at the Clinical Alzheimer's Disease Congress here in San Francisco

showed all the additional analyses beyond what was presented in the top-line press release results in September, specifically the positive clinical efficacy data, the positive underlying biomarker results, the positive impact on delaying disease progression, the positive impact on health-related quality of life, and the positive impact on caregiver burden balanced with well-characterized and well-tolerated safety profile. That's what you see in the publication and the presentation at the medical congress yesterday. Well, I want to ask about the side effects, including the deaths, Ivan, because it does look like there were several deaths in the 18-month study, including two patients who did receive the treatment. Were they drug related? Thank you for the question. In the core study of this

late stage large phase three trial, over 18 months of treatment duration, we saw 13 deaths in total. However, seven of the deaths were in the placebo group. Six of the deaths were in the treatment group. That's the first fact. Second fact, we looked at what you mentioned, the number of death cases with concurrent brain cerebral macromammary. The rate of death was 0.1% with concurrent macrohemorrhage, both in the placebo group and in the lacanumab treatment group. That's a fact, too. And the fact, too, you mentioned two cases. Both cases have complex conditions with multiple risk factors, including the usage of anticoagulants, as we heard from the experts yesterday at the medical congress,

is indeed very difficult to attribute these deaths to the candidate treatment. I guess what I'm wondering, including some of the side effects that you mentioned, the brain bleeding, will doctors ultimately, do you worry, be reluctant to use this treatment, especially in patients that are on blood thinners, for instance, and more vulnerable to bleeding? Yeah, this was one of the important discussions yesterday at this medical congress. We actually showed that for individuals on anticoagulants in this trial, they do benefit in terms of their cognition and function in a very meaningful way in this clinical trial. So this is going to be an important conversation between the family and their physicians about the benefit-risk of using lacanumab. We, of course, do believe

the benefit risk profile of lacanumab exists and is acceptable in this population, but that comes down to each individual conversation. And shall the family decide to move forward with lacanumab treatment, assuming this is approved by the

FDA going forward, strong educational efforts and monetary efforts will be required. And we are committed to do. Thank you. So you're clearly seeking approval, Ivan. We talked to some of the analysts about this, and they were wondering about your relationship specifically right now with Biogen, who is, I believe, sponsoring this, your partners on this. How tight is that relationship? Are you going to go to market together? Are you working on further studies? What are the next steps? And what would you tell investors who are wondering if that is sound?

At this moment, as you know, Sarah, the candidate is under a review by the FDA for accelerated approval with action date on January 6th. Once we have that accelerated approval, within days we'll immediately file for full traditional approval using this late stage phase three trial data to the FDA. We are very grateful for all the support from Biogen. We have a very strong shared goal to serve the Alzheimer's disease community and bring our mechanic to market for patients and families as soon as possible. In partnership with Biogen. That will continue, just to confirm. We are partners, as I mentioned. Yes.

Got it. Thanks for clarifying. Ivan, appreciate it. We'll continue to keep an eye on this drug as you apply for approval here. As we look at the markets here, 35 minutes left of trading. We continue to make new highs on the S&P 500

this hour, up of 2.5%. Netflix is your top gainer, up 9%. Estee Lauder, Hewlett Packard, no shortage of winners. Every sector is higher. We are going to end the month of November very strong for the week, up about 7 tenths of 1% so far. Up next, Liz Young from SoFi joins us with her take on this post-Powell rally, why she says the market is still signaling a recession. We'll be right back. Stocks are surging. We're at session highs as we speak. Following Fed Chair Jay Powell's remarks this afternoon where he signaled smaller rate hikes as soon as the December meeting.

Joining us now is SoFi's head of investment strategy, Liz Young. And Liz, you think we're still going to see new lows in this market? You're not convinced. I don't know that we're going to see new lows. I think that we could see another low. And there's a couple reasons for that. And also, I want to preface this by saying that I don't think that this is something we should terribly fear. We still need to get to a point where the business cycle resets. The economy is out of balance. And Fed Chair Powell has pointed that out over and over again. And he's been clear about the fact that it's still out of balance. And they're not going to be comfortable until it gets back

into balance. But a couple of reasons that I still think we're going to see another type of low, and remember, bottoming is a process. We're getting there, but we're not quite there yet, in my opinion, is that I don't think it's any coincidence that we started to hear commentary from Chair Powell today that he's mindful of the risks and that he's practicing risk management and looking ahead at where the risks might be right around the time when what's called the near-term forward spread inverted again. And that is what the Fed watches very closely as signs of recession. So we've been inverted at the twos, tens for a while. We've been inverted at the three-month, 10-year for a while. But that near-term forward spread is really what the Fed

looks at. And it did invert again, very, very small, but it's still inverted. And that's something that I think really changed the way that they're managing risk. Yet again, I think it comes down to this whole soft landing question and what you think is ahead for the economy, a deep recession or something more shallow and mild and what's being priced in, because it appears that the Fed is going to keep going until inflation comes down to much lower levels than we're at right now. So what do you think is already priced in on that front, Liz, and where do we go? Well, I think the rally today is very clearly a Fed rally. It's a rally based on the idea that the Fed might end up being a little bit easier than we originally thought or easier than what our worst-case scenario had been as market participants.

But we can't have it both ways. We can't get an easier Fed with an economy that stays exactly as strong as it is right now. And I think that's what the market is today pricing in, is that the economy will stay as strong as it is today and that the Fed will be able to come off of this very hawkish stance. The only thing that's going to bring them off that hawkish stance is if demand does, in fact, relax to a point that inflation cools, if the job market also relaxes to a point that makes them more comfortable. If those two things happen, then the Fed slows down. But those two things will affect GDP growth. They will affect consumer spending. They will affect corporate earnings. So I still think that there's weakness to come both on the economic front and on the corporate earnings front. But what Jay Powell did today was basically reduce the risk that they would put us into a catastrophic recession. So he's

acknowledging the fact that he doesn't want to do this. He's not going to hike rates with reckless abandon, right? So he reduced the risk that they were going to create a Fed-induced catastrophic recession. Yeah, sometimes just helps to hear him say it. Liz Young, thank you very much. Appreciate it. Thank you. The strategy from SoFi up 3.7 percent right now on the Nasdaq, more than 550 points on the Dow. Look at oil prices. They're also moving higher today, reversing weeks of losses as Wall Street eyes China demand and OPEC plans. WTI crossing back over 80. Up next, we'll talk to the CFO of Chevron here in Washington for our CNBC CFO Summit for his take on where prices are heading. We'll be right back. Oil prices bouncing back above $80 a barrel today.

They had dipped into the low 70s earlier this week as traders grappled with global demand concerns after more COVID cases in China prompted wide-ranging lockdowns and some protests. Joining us now is the CFO of Chevron, Pierre Breber. Pierre is part of our CNBC CFO Council. He's with me in Washington today. It's good to have you. Thanks for having me, Sarah.

And an update for oil prices. I was prepared to talk about weaker prices and China, and Powell just talks about moderating interest rate hikes and soft landing, and the market goes higher. What do you see as the primary driver? Well, it's a volatile and uncertain time. Demand is strong for our products. The two big questions are, can the Fed engineer a soft landing? And as you said, will COVID restrictions in China continue? On the supply side, supply is tight. And the key question there is, will we see disruptions when the EU implements sanctions, both in December on crude and February on future products? So we're really prepared for prices that

are either higher or lower next year. What's happening on the demand side with these China lockdowns and protests? How much does that affect the equation given they're, what, the world's top consumer? Yeah, second largest economy, it certainly is weighing on the complex. But we believe it'll pass at some point in time. And so that's, again, one of the key questions is how long those restrictions last. But again, if we look at the economic activity and will we have a slowdown and the depth of that slowdown, those are the two key uncertainties on the demand side. The supply side is pretty clear. Whether prices are higher or lower next year really depends on demand. Supply side is clear and still pretty tight, right?

Supply is tight. I mean, we're growing our supplies here in the country strongly. We are up 6% on oil and gas production. Our Permian's at record production, 700,000 barrels a day. It's going to a million barrels a day by 2025. Gulf of Mexico deepwater offshore, we're going to go up 50% by 2026. So we're certainly doing our part to grow domestic supplies here, but as you know, it's a global market. You're also bringing oil from Venezuela, which is getting a lot of attention. There's a report today that that could be shipped from Venezuela into the U.S. as soon as December. Is that true? It's a limited expansion in our activities.

It just happened with a new license. Yes, we expect to be able to bring crew to the U.S., which previously was not allowed to happen. We expect that there'll be modest increases in production over time, but it's really too early for me to give you specific guidance. We need to get our teams on the ground working, and then when we know more, we'll share more. But you use the word modest. So I think a lot of Americans are wondering if it's worth that risk of doing business there with the track record

of the Venezuelan government. Well, Amos Hochstein of the administration was on CNBC earlier today, and those are his words. I mean, this is really U.S. government policy. We're just focused on safely delivering energy to a world that needs it. And we is really U.S. government policy. We're just focused on safely delivering energy to a world that needs it, and we're following U.S. government very strict licenses that have expanded slightly now. Also wanted to talk to you about investors in the energy space. You're the top-performing sector so far this year. This was a sector that was, I don't have to tell you, hated and trashed around ESG concerns, which way the world was moving. How much confidence have

you gained back from investors, which I know you're on the road talking to every day? We're winning investors back, but we got a long way to go. So energy is about 5% of the S&P 500 by market cap, but more than double that by earnings. So you can think of it as we're trading about half of the market multiple. So at Chevron, we talk about delivering higher returns and lower carbon. Our return on capital employed this year was over 20%. We're the country's second largest producer of bio-renewable diesel. We issued a methane report, shows that we're a leader in methane management. So I think we're doing a lot to convince investors that we can sustain higher returns in a lower carbon future.

What's the primary concern you get right now? Is it around environmental? Is it around recession? I think it's delivering quarter in, quarter out. We're a much better company than we were just a few years ago. So a lot of the attention from investors is driven by the commodity prices. I think while they'll look under the hood, they'll realize that we're much more efficient than we used to be, about 20% more efficient. So that means at any price, we generate more free cash flow. And more free cash flow means higher dividends and more sustainable buybacks for our shareholders. Yeah, which is also what gets you some political attention in Washington. Pierre, thank you so much for coming on and being here at our CFO Council. That's Pierre Breber from Chevron. Take a look at where we stand right now in the markets.

You've got lower yields, weaker dollar, and higher stocks, sharply higher, up 3.7 percent or so on the Nasdaq, 2.6 percent on the S&P 500 and 580 points higher on the Dow. We continue to build on these gains in this final hour. Coming up, rare comments from Amazon CEO Andy Jassy at today's deal book conference. Here's what he had to say about sports rights earlier today. I think you'll continue to see us investing in sports. I mean, sports is such a unique asset. It's, you know, if you look every year at the most watched programs, sports often occupies 75 percent of those spots. And, you know, they drive live engagement and they drive prime subscriptions. So I think you'll expect to see sports. Coming up, you'll hear his take on the macro environment and how consumer spending trends are impacting Amazon. Closing bell back in a moment.

After the break, rare insight from three key leaders in corporate America. We'll tell you what, Amazon's Andy Jassy, Reed Hastings from Netflix, and Mark Zuckerberg from Meta said at today's deal book conference, when we take you inside the market zone, up 570 points on the Dow and almost 4% higher on the Nasdaq. Be right back. We are now in the closing bell market zone CBC senior markets commentator Mike Santoli here to break down these crucial moments of the trading day as always plus we've got Steve

Leisman here in D. C. with the big takeaways. From Fed Chair Powell speech and Julia Boorstin on comments from Netflix co-founder Reed Hastings we'll kick it off with the broader market because Mike Santoli. Quite a rally we've got

here a big move in bonds buying selling the dollar and the Nasdaq is now up almost 4 percent. We're going out with a bang for November, up 5 percent for the month in the S&P. Yeah, clearly people were well hedged, tactical traders well hedged going into Powell's speech today. It is the last day of the month. And there's a little bit of an upside test here. If you're bearish, this is when you have to really make a decision to say, are we going to sell this rally or not? The S&P crossed above intraday, crossed above its 200-day average. It didn't do that back in August. And you're at a two-and-a-half-month high when you have a still firm underlying economy at a time when maybe you can make the case that the Fed is downshifting.

And so taken together, I think tactically people felt as if they had to grab at it because investors are somewhat underexposed to stocks still, at least professional ones. Only two losers in the Dow are Walmart and 3M right now. Everybody else is higher. UNH adding almost 100 points on its own. Fed Chair Powell saying today that smaller interest rate increases could come much sooner than expected. Listen. If you're waiting for actual evidence that inflation is coming down, you know, it's very difficult not to over-tighten if that's all you're doing. So we have a risk management balance to strike, and we think that slowing

down at this point is a good way to balance the risks. Well, the market took those comments as a positive after a rush of more hawkish Fed speak that we've heard in recent days. The Beige Book, we should note, also out this afternoon, showing economic activity flat to slightly higher. Our Steve Leisman joining me here in D.C. for the CFO Council Summit to break it all down. And you and I were just trying to figure out whether he really said anything that different to spark so much enthusiasm in this market. I'm not sure you were shrugging your shoulders. Did he say anything? I mean, I was kind of with you on that. Look, I've made some calls.

Look, the market has moved seriously. You've got to take it seriously. I think what Mike said is how the market was positioned going in may have been a factor. It may be that what markets heard is this is it. This is as bad as it gets. When I look at what happened to the Fed funds market, we came in with a peak rate of 505. We now are trading at 493 for the peak rate. So you're down about 12 basis points. The idea that this 5%, 4.75%, 5% is as bad as it gets. And then maybe the tops are put in. There's 494 right now. Maybe the tops have been put in on the 2-year and the 10-year. What does that tell you?

It tells you perhaps, and I'm sorry to have to hedge all this, that the worst restraint that's coming to the economy is already there. It's not going to get worse than what it is. I don't think the Fed is downshifting. I think they're taking the potential off a top or a higher rate. But it seems to me there are still two big questions. One, how much damage is that going to do to the economy? Excellent point. And we don't know because of the variable lags, of course. There's that. And for how long those rates need to stay restrictive or in that very high space,

because we don't know how fast inflation is going to come down. Both excellent points. I do think that I've heard to a lot of investors who say, you know what, just tell me what my bogey is here and I can start to make decisions underneath that. But if the bogey keeps changing with the volatility that we've seen, which is historic, 14 basis points higher one day, 14 lower the next day. I have no way how to figure that in. They can at least start to plan and start to figure out what the investment proposition or the thesis is here, if they can get to that point. It does hinge on inflation coming down. It does.

And let me point out, to make sure you don't walk away with the wrong impression from Powell saying, yeah, we're going to step down. But remember, he said, we still have a long way to go. You take it from that, there still may be another 100 basis points of tightening to come. The question is whether or not the two-year already anticipates that and will not go higher because it's already factored in the other 100 coming from the federal reserve. It just feels better coming in smaller doses, maybe.

Yeah, you're going to get the same result. Moderation, yeah. Good point. Steve, thank you. Steve Leisman here in Washington. Amazon CEO Andy Jassy warning of a more uncertain economy and seeing signs the consumer is growing cautious. He sat down with my colleague Andrew Ross Sorkin at Dealbook Summit earlier today. Here's what he said. It's very clear that consumers, they're spending, but they're being

careful about trying to stretch their dollars. So they, you know, we spent a lot of time having millions of deals available for Black Friday and Cyber Monday and the last, you know, the Turkey 5 that people call it. And people care a lot about getting a bargain right now. Always important to listen to what Amazon CEO is saying about the consumer, Mike. A little more caution there than the numbers they put out this morning around Thanksgiving shopping, which were very strong. They were pretty strong. I mean, we have to keep in mind the overall economy is growing. Incomes are high. Prices are up. And so that accounts for some of the overall aggregate strength you've seen in consumer spending. And I do think also he's echoing what a lot of big retailers are saying. Also, by the way, if we're in that kind of environment, in that comparison shopping type of world where they're looking for value and it's the scale players that are gonna benefit.

I mean, it serves Amazon as a retail player. What is interesting to me though is the stock Amazon has traded much more in line with the cloud software names. AWS seems like the main swing factor in the valuation for Amazon over the last few years rather than like a retail stock specifically. So it's not necessarily the case that it's living and dying by exactly how strong the consumer is at any given moment. But interesting, Etsy, for instance, is the best performing consumer discretionary stock

right now in the market, up 8.5%. The tech rebound overall is notable. As I said, Netflix is the top performer right now in the S&P 500. We heard from Netflix co-CEO Reed Hastings talking advertising in the streaming space, also at that deal book conference earlier today, and what he failed to realize while remaining ad-free. Here's what he said on that. What I failed to understand is that there's a lot of TV advertising

that now couldn't find the viewers because the 18 to 49 segment had moved online. They were not watching linear TV. And so the advertisers are desperate for connected TV or internet TV solutions. So that's the real thing that I missed and that we didn't have to steal away the advertising revenue. In fact, it was pouring into connected TV if the inventory is there. Julia Borsten covers the company. She joins me now. Julia, what else did you glean from Hastings' remarks, especially about that ad-focused future? Well, look, he praised Microsoft, which they picked as their partner in this ad business.

I thought it was so interesting where he basically said Netflix was so successful, and the rise of streaming was so successful that that was the reason why now they have to offer advertising because because brands are so desperate for it. He's also said something else interesting about the sequel to Knives Out, Glass Onion. It was in theaters this weekend. It was in a limited number of theaters this weekend, less than 650. And it did phenomenally well, a huge per screen average. And Andrew asked him whether he thought they left money on the table. And he said, yes, a lot. And I think there's this question of whether or not he's going to stay committed to this idea of really prioritizing

growth of the streaming service or whether he might see opportunity in putting films like Glass Onion in theaters, in a lot of theaters, thousands of theaters for a lot longer and trying to figure out that theatrical window. Because right now, Netflix really uses that theatrical window more as marketing. So he changed his mind on the advertising business. Sarah, we'll see if he'll change his mind on this one. Right. I was really hoping Andrew would ask him when Bridgerton is back, but no luck there. We also heard from Mark Zuckerberg at that comments. Julia, I was wondering what you thought about what he said when it seemed like he

was backing away from the whole, we are an only metaverse company push a little bit, saying clearly he spends more of his time on social media, something that investors should know, but was notable to hear from him and hear him say that. There was a clear message to investors in what Mark Zuckerberg was saying. He said he does believe in the metaverse. It's a 10-year plan, but he did say that the metaverse will improve dramatically. The functionality will improve dramatically in the next three to five years. But he also reminded investors, reminded the audience that the vast majority of investment and where he's spending his time is on the social media business of Meta, which is Facebook and Instagram. Those are the real money making generating platforms.

And he talked about how platforms such as WhatsApp are just really in the very early days of generating revenue. So there's so much potential there. So he tried to make it really clear that they are going to be disciplined and rigorous and not overspending. And they understand that right now their bread and butter is social media. But saying, you know, by the way, we'll have that metaverse play down the road. Julia Borson. Julia, thank you. Mike, you know who likes the sound of moderating interest rate hikes? Technology. Some of these big cap tech winners today. Netflix up 9 percent.phabet, Match, Meta.

Oh, Meta, that's what I was looking for, 7.6%. Quite a rebound. The NASDAQ is now at the highs of the day, up more than 4% as we head into the close. Adding to gains for the month, which it looked like the NASDAQ was going to be down on the month before we came into today. Wondering how you read the comeback, whether it's just positioning, whether there was something meaningful in what Powell said in this lower interest rate potential outlook that could make these companies longer term buys than a one day bounce. I think in terms of the outsized reaction to the growth names, it's really where things were beaten down the most. Yes,

obviously, lower yields has meant by growth over value. So there's that effect, too. They're the big index names. There's a massive order to buy at the close. Market on close orders were very heavy at the end of the month. So the big index names are feeling that as well. So we'll see if there's follow through to this. This clearly was a little bit of a whiplash effect as people backed off of risk for two days and kind of being forced to a degree back in. And we'll see if it's any more than that tomorrow. Microsoft, Apple, Nvidia, Tesla and Amazon all contributing the most to now 4.23 percent rally for the Nasdaq. What are you seeing in the internals now? Very strong, Sarah. There's a chance you have to see how it closes, but there's a chance of a 90

percent upside volume day on the NYSE. That's sometimes considered technical, technically significant. Look at the intraday of the U.S. dollar index just really fell apart after the Powell speech and Q&A. Clearly, people taking it as a net dovish message. Powell saying risk management means perhaps slower rate hikes as opposed to larger ones to fight against inflation. The volatility index coming in hard as well, right down, scraping that 20 level, 20 and a half right now. That's around the lower end of the range. Also near those August lows, that's when we had the last big bear market rally peak out as well, Sarah. Mike, thank you. As we head into the close, take a look at the Dow. It's up 650 points or so. So

we just took another leg higher here as we go into the close. Again, as Mike said, almost 90% upside. It's hard to spot the loser at Walmart and 3M. Still down. Everything else is up. United Health, Microsoft, and Home Depot are adding the most to the Dow rally right now. Look at the S&P 500. It is up more than almost 3% right now, which just adds to the gains for the month. We're up now 5.3% for the month of November on this final closing day of the month. The Nasdaq is the big winner, though, today. It's up 4.3 percent on the month, now higher by 4.3 percent. We were pretty much flat on the Nasdaq for the month of November heading into today. There's the close at the highs of the day after the Fed chair signals smaller rate hikes ahead. That's it for Closing Bell.