Closing Bell - Closing Bell 11/9/23

Episode Date: November 9, 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.

Don, thanks so much. Welcome to Closing Bell. I'm Scott Wabner, live from Post 9, right here at the New York Stock Exchange. This make or break hour begins with an historic run for stocks, the S&P going for its longest winning streak in 19 years. Well, it has more work to do right now than it did a couple hours ago. We're going to track the trade over the final stretch. 4,400 was in sight. We backed away from that a little bit, but we'll watch it closely. Your scorecard with 60 minutes to go in regulation looks like this. The major average is heading lower. They really started a couple hours ago, right at the time of a disappointing bond auction. Our own Rick Santelli giving it a D minus. Well, yields, they spiked. Stocks, they fell. We need to watch that. And then,

well, piling on a little bit, Fed Chair Jay Powell, he made some comments a little while ago, deemed more hawkish than after the recent Fed meeting. That took stocks even lower. We're going to have more on that with our own Steve Leisman coming up in just a moment. Falling yields lately, as you know, have been one of the key reasons why stocks have been on the move over the past week or so. Why this rally has progressed like it has. And that takes us to our talk of the tape. The catalyst to keep this incredible rally going. Do we have one? Let's ask Mira Pandit, global market strategist for J.P. Morgan

Asset Management with us once again at Post 9. Welcome back. It's good to see you. So we had the bond auction was bad and then Powell and you were already worried about what the catalyst was to go from here to there higher. Correct? Yes. In the short run, if we see yields fall back down again, that can help stocks, but that's really not a durable factor in terms of pushing stocks higher. And I think the issue that we deal with going into next year is the fact that when we look at earnings expectations of 12% profit growth, it's just not realistic, especially coming out of earnings season with 90% of market cap reporting and hearing a lot of gloomy outlook from management going forward. So if we're going to see even half of that type of profit growth next year, we're going to need to maybe see either an adjustment in stocks or at least we're going to have a bit of a ceiling in terms of where they can go.

So we got this rally over the last week for a number of different reasons. Right. Treasury issuance went our way. The Fed share was deemed to be dovish. Apple earnings were good enough. And the jobs report came in a little softer, which was what the market wanted, right? Are you calling into question the catalysts that got us from there to here now? Do you think the market's got it wrong? It's just a little bit of a not so fast,

because just as you can have a more benign jobs report, you could have a hotter jobs report next month or a slightly hotter CPI print. We just don't know how the data is going to continue to evolve. You hear Powell and you hear other members of the Fed with mixed commentary. We're not hearing a lot of conviction and confidence that inflation is where it needs to be and so i still think about that september dot plot and that one potential more hike whether it's december or january not off the table yet and that

is contributing to all the yield volatility we're seeing because there's not a clear direction of travel yet so whether it's stocks or bonds i think we're it's it's a not so fast market right let me see the market had obviously come to the view and it was pricing in the fact that the hikes were over. Right. That was key. Now, I think we find ourselves again today rethinking that. Let's bring in CNBC contributor Joe Terranova of Virtus Investment Partners, our own senior economics reporter, Steve Leisman, joining us as well. And Steve, I'll begin with you because, you know, the market sold off on Powell on this belief that he was somehow more hawkish today than he was on November the 1st. I went back and I looked at the words from from the Fed chair himself after the meeting on the 1st versus what he said today.

And I got to be honest, I just don't see it. He said today, quote, if it becomes appropriate to tighten policy further, we won't hesitate to do so. He said on November 1st, if there's evidence of growth persistently above potential or that tightness in the labor market is no longer easing, could put further progress on inflation,

could warrant further tightening of monetary policy. Inflation well above target, he said today, has a long way to go. On the first, inflation is moderated but remains well above target, has a long way to go. I mean, almost the same words. Yeah, Scott, and I think that I remarked at the time of the last press conference that Powell's opening remarks were fairly hawkish. And his response to my question was fairly hawkish. But then it seemed like, and I think the tail of the tape kind of bears this out,

during the press conference and answering to reporters' questions, he was a bit more dovish, where he seemed to suggest that the risks to doing more and doing less were a little bit more balanced. And he suggested a Federal Reserve that was more neutral rather than one with a hike with a bias. You're right. I went back and looked and some of the words were exactly the same. But it was the press conference words and I don't have them in front of me right now. But I remember the distinct impression I had that it was the answers to the Q&A and also the market seemed to trade more favorably during the Q&A. Look, I think it doesn't matter that much, Scott.

I think what matters is this, is to the extent that the market has completely ruled out hikes, Powell has given you some reasons to make sure that you think they're back, that they're potentially on the table. And the idea they're not, that they're potentially on the table. And the idea they're not confident that they're restrictive. And there's one kind of new twist in here today, this idea that we may have seen the best we're going to get from the inflation reduction coming from supply side, the supply side opening back up, and that we may have to lean more now on monetary policy. That's a potentially, what would you say, thorny issue right there, in that it suggests that if we don't get more inflation reduction from the supply side,

that he may have to do more when it comes to rates. And so the market also decided today that the Fed chair was a little bit more hawkish than he had been last time. It's so interesting because I went back and I looked at the whole transcript of the news conference in the in the moments after Powell. And he he talked about the supply side and, you know, being unsure as to what that was going to to mean for the inflation picture. So maybe he had a more definitive view on it today. I don't know, Joe. He said today, not confident that the Fed has achieved sufficiently restrictive rate to bring down inflation. Right. Not assured getting to two percent. He said not confident rates are restrictive enough.

That's what he said last time. So, I mean, did you see something different today? Is the market getting this right or wrong? Where are we? So we're in a different place for the market itself. The market on Wednesday, November 1st, was deeply oversold. Pessimism was prevailing. The market today is bordering this morning on actually being slightly overbought. The premise that potentially you could have rate cuts in 2024 was beginning to be populated. The S&P 500 since November 1st is up 3.6 percent. The Nasdaq's up nearly 5 percent. The 10-year Treasury has pulled back 20 basis points. So the last several days, the market has had this intraday formation

where the futures open up higher. And by the way, let's credit Jim Cramer. He pointed this out this morning. The futures open up higher and fail. And the reason that they're failing intraday is because of the significant weakness that's coming from the Russell. That's troubling. That's problematic. Last Friday, we thought the Russell had begun to break out. It's clear that Russell has actually failed. The Russell's only up about one percent month to date. And in addition to that, now one of the mega caps, Tesla, is down six percent today on a variety of different news and also rising yields. Again, that's challenging to the thesis that mega caps will propel us higher through the end of the year. I mean, Steve, the stock market activity direction cuts both ways.

I remember at the news conference on the 1st, the Fed chair had talked about, you know, the tightening of financial conditions as being a risk to maybe not doing any more. He did mention a decline in equity prices as one of those things on that list of potential risks to the story as to why you may not want to tighten more. Now, as Joe rightfully points out, we've had quite a rally in the stock market since that day. So it does cut both ways. The Fed chair doesn't want to see a stock market totally off to the races, thinking that everything's free and clear, right? Yeah, Scott, I don't mean to be a serially disagree with you, but I've said for a while here,

I think the stock market thinks the Fed thinks more about it than the Fed actually does. I think the Fed is much more focused on interest rates, much more focused on financial conditions, much more focused on bank lending and bank credit tightening than it is on the stock market being up or down a couple hundred points even on the s&p um yeah i don't think they want a runaway rally i'm sure they don't want a runaway decline in stocks but that i don't i don't think that's the major metrics that they're looking at right here in fact the market i think has been uh you know reasonably well behaved through all of this it is interesting to me it's not down more given the rise in rates and yields. It's come back, of course, as yields have declined. But I would

focus on the 10-year, which is up quite substantially. I'd focus on corporate bond rates and I'd focus on the senior loan officer survey that showed continued tightening going on. Those are the metrics I think that are most important to the Fed when they talk about, and they did add the word tightening credit and financial conditions to the statement this last time around. Yeah, you can disagree with me all day long, Steve. It's all good. That's why we like these conversations anyway. So please, you're off the hook. Don't worry about that. Mira, you know, reaction to what Steve and Joe have said. It's not about the stock market. It is about what yields are doing. We haven't seen a significant enough loosening in financial conditions over the last couple of weeks,

and especially when we think about today's moves, seeing yields move again a bit higher. I think what the Fed is concerned about is a massive downshift in yields and the market sighing relief and thinking about cuts next year in an overly aggressive way. But I don't think we've seen enough of that. Even at 4.5 percent, if yields fall again and get to that level, that's still not commensurate with the Fed taking a round turn necessarily. You know, what's your take, Mira, on what Joe was mentioning in the small caps? Because they're down one and a half percent now. I think we're at the lows of the day for the Russell. And after this incredible rally that we had last week, as Joe was mentioning as well, I mean, the slide in the Russell has been dramatic, significant to the point where

you can't really bank on stocks other than the Magnificent Seven doing anything. Even if we're going to have a rally into the end of the year, it's going to have to be carried by those. I think you have to find something in between, because I'm still a little bit cautious around small caps because there are so many headwinds when we still think about smaller companies bearing the brunt of rising interest costs, rising wages, rising input costs. When those things perk up, they have the least amount of pricing power left. You know, even though valuations look favorable, if we do head into an economic slowdown and we have seen some very strong growth, even if we just head into normal economic growth, that's going to be an area that comes under pressure.

But even with the mega cap tech, you know, there's a space in between. If you look at the S&P 500 as a whole, it's about 10% more expensive than it typically would be over average. But the mega caps are about 40% more expensive. The rest of the stocks within the S&P 500 are about 4% to 5% more expensive. So not overly worrying there within the S&P 500 are about 4% to 5% more expensive. So not overly worrying there. I still think you're finding some interesting profit stories and profit resiliency there. So it's about finding something in the space in between. Mira, when you look at the commodity space and the significant decline in oil over the last week, is there an economic message that should be troubling embedded there?

Not necessarily. I mean, I think we're seeing everything move around so much between stocks and yields. And I think a little bit of a function of that is tying into the yield and dollar story as well. So I think we just need to wait until the dust settles a little bit more. Clearly, on the one hand, that will be a greater headwind for energy stocks going forward in the next profit season. However, it can also be a broader help to other companies that are sensitive to commodity price spikes. And it will also help in the coming months on inflation, just to see any little bit of progress there is going to be helpful from a Fed standpoint, even if they're not as worried about headline. So I think that from that standpoint, the commodity story right now is not necessarily a headwind.

That's a great point, because Tuesday, the inflation report is going to come out. And do you dismiss the inflation report if you get a bump up, knowing what energy has done here in the last several weeks? I mean, Jan Hatsi has sat right where Mira is, you know, yesterday and suggested that in 24, equities are going to do well and commodities are going to do well. So it's a broad range of asset classes that he expects, at least, and he's calling for a 15 percent chance of a recession that are going to do well. Steve Leisman, let's also not lose sight of, you know, the Fed chair's comments came on the back of that bond auction, which was, you know, dreadful, which you agreed with Rick Santelli, who's great from earlier. And I just want you to reiterate the concern that you have,

which you articulated right after that happened, too, because one of the comforts that the market took was the Treasury announcement last week of the issuance. it's it's it sure shows today that the mechanism of this whole process is not exactly the smoothest to say the least i think that's a good way to put it scott and here i agree with you um i guess because you were agreeing with me but in any event there have been three legs to this market rally and there were three problems before there was the stronger growth there was a fed that was more hawkish or perceived to be more hawkish and we can argue about that and there was the treasury issuance issue so let's go through those we had some a weaker jobs report

we had those weaker isms that ticked that off green light for the market to rally we had the fed come out with what many perceived to be i'll put put it that way, a more dovish Fed, a more dovish Powell on Wednesday. Green light from the Fed. Then you had the Treasury come forward with its new issuance schedule that took less, had less reliance on long-end coupon issuance, more in the middle, more in the 2 to 5, and was overall a bit smaller. Today, we had them do the 30. By the way, the S year and the 10 year, that's where I disagreed with it. and was overall a bit smaller. Today we had them do the 30. By the way, the S year and the 10 year, that's where I disagreed with it. He gave it a C minus.

I was more in the B range because I thought that it came in at or below the running rate at the time of the 10-year yield. So today it came in way above on the 30-year. And if you look at that 30, it looks like one of those, I don't know what you'd call it, but El capitana charts what happened at two o'clock they went straight up um when it came to the yield and my concern is twofold scott what is the volatility it just you just won't think to have this kind of volatility in one of the most in the most deep and liquid market in the world the second is that while the treasury's plan sounded great in overall strategy, the execution is going to be

bumpy here. And here they went out and they did a large issuance on the 30-year, and the market had a bit of trouble digesting it. So I think this may be something where we're going to have to be covering these issues and these auctions every time they happen and following very closely the Treasury's plans for how to finance this very, very large deficit that we have. Mira, Steve makes a great point in that, you know, the bond market volatility is unsettling. And, you know, it wasn't but a few months back or maybe a little bit longer than that when there was a bit of extreme bond market volatility where yields were just moving in just abnormal ways, right? And that upset the stock market at the time. Are we worried about that once again, as we put the deficit and funding it back in focus? Well, if you look at the move index, which measures interest rate volatility,

where we are now is actually pretty consistent with where we've been on average since the Fed started to raise rates. And it's not actually that far off from where we were during the onset of the pandemic. So rate volatility has been pretty extreme. And I think what we worry about a little bit right now is just the false dawn, like we had this morning and yesterday, where things start to look a little bit better and it looks like things are starting to settle down. And then we have some bad news, whether it's economic data or issuance data start to turn things around. So I think that we're still keeping a very close eye on how rate volatility plays out because it's not behind us. And it's no longer just a function of what the Fed does or doesn't do.

It also is things like issuance and supply and demand dynamics and in the longer run the federal funds and um sorry the federal finance dynamics that we're dealing with and are likely to continue to to deal with over the next several years yeah it's that's spot on and it's the fiscal condition of the united states and the that has to be something that in 2024 needs to be addressed otherwise this bond market volatility is going to continue the direct and indirect bids was the lowest that we've witnessed since November of 2021. And we can't just rely on insurance company and pension funds to be the buyers of the long-term debt. There has to be at some point some degree of fiscal stability that incentivizes buyers to return once again. We don't see that right now.

I'll tell you this. I spoke to a lot of bond managers this afternoon after that Treasury auction, and they all said we didn't participate because we're full. We were able to get yields 35 to 40 basis points higher just one month ago. So we stepped back. There was no demand. And that's going to be a problem that continues. And Steve, let's wrap this up where we started without. Without the Treasury auction being horrible today, you think the market looks at what Powell says and does a comparison to the first and says, not much different, almost the same, but it was primed. It was primed for something bad with rates because they were already shooting higher and the bond auction was bad. Yeah. And I would add to that, Scott, that we had a couple,

pardon me, other hawkish, more hawkish Fed speakers this morning. Bowman spoke. She's in favor of another hike. Look, I think rather than get sort of in the weeds about what the Fed is saying, take a step back and say, well, where is the Fed? The Fed is in neutral at the moment, and it will take a bunch to make it to hike again, but not much more. The Fed is going to need to see progress on inflation. We may get that progress next Tuesday, especially on the headline, given what's happened with oil prices. That will keep it at bay again. What it wants to see is continued progress towards inflation. They are not declaring victory. We remain on notice that the Fed could hike again or launch a series of hikes, as I've said over time, if inflation does not come under control. It is not

going to settle in for 3% or 3.5% inflation, period, end of story. All right. The always enjoyable, sometimes disagreeable. Steve Leisman, thank you very much. I appreciate you being with us very much as you watch what Mr. Powell had to say today in that bond auction. Mira, thanks so much for being here as well. And Joe, you too. We'll see you soon.

Now to our question of the day. What is the biggest risk to stocks right now? Rates, inflation, valuations or geopolitics? You can head to at CNBC closing bell on next to vote. We'll share the results later on in the hour. Let's get a check now on some top stocks to watch as we head into the close. Christina Partsenevelos is here with that. Christina. Duolingo is trading at its highest level since September 2021 after hiking its full year revenue and bookings guidance. But the language learning company is also spreading its wings

with the addition of music and math courses to its flagship app, and those shares are up 21%. Sony is lower after the Japanese electronics and media giant posted a decline in profits. Sales of its image sensors used in smartphones were weak, especially in North America, but the company is sticking with its PlayStation 5 sales target as they head into the holiday season. You can see shares down almost 6.5%. Scott? All right, Christina, we'll see in just a bit. Christina Parts, another loss. We're just getting started here on Closing Bell. Up next, five-star stock picks. Capital Wealth Planning's Kevin Simpson,

he is back. He's got more trades to tell you about, too, including the new name he's buying. It's already doubled. That doubled the S&P 500 this year. He'll make his case for more upside just after this break. We're live from the New York Stock Exchange. You're watching Closing Bell on CNBC. Stocks are falling across the board today. The S&P on track to snap that eight-day win streak. That following remarks from Fed Chair Jay Powell

that more work may be needed to bring down inflation, not to mention a bond auction that didn't exactly go very well today. My next guest says he's managing his five-star portfolio as if rate cuts aren't coming until 2025. Let's bring in Kevin Simpson of Capital Wealth Planning. Wow, so nothing next year's coming from the Fed in terms of cuts?

It'd be nice if I'm wrong, because rising tides will lift all ships. But I totally agree with you, Scott. The way I interpreted Chairman Powell's remarks today seemed almost identical to what we saw when the market looked at it as the most dovish speech they'd seen. So we all come on and we talk and speculate about rates and cuts and everything else. But what I tend to do is I like to look at smart people who are actually in the marketplace, people who are issuing debt and who are paying interest. And we always talk about the fact that the bond market itself is typically a lot smarter than the stock market when it comes to predicting rates. So in the FT this morning, I mean, they had an amazing analysis on Pepsi Cola.

This is an A-plus rated company that went into the debt market yesterday. They raised $2.5 billion worth of debt, of which $1 billion, Scott, was variable short-term, one-year note. And that means that they don't see the Fed coming to the rescue anytime soon. It also means they don't see a recession for the next year, which is a subplot that's kind of interesting. But the most compelling statistic is, hey, the Fed's not lowering rates. If they thought that, they would hold off. And for that reason, we're in the business of wealth preservation. We're not in the business of speculation. So I need to manage the portfolio as if higher for longer is real. The Fed's not

cutting rates that these that these targets are all, you know, wishful thinking and that we've got to prepare for a market that's going to have higher rates until the beginning of 2025. All right. So let's talk about how to do that then in terms of manage a portfolio correctly, if you're right. You added to Cisco. Why? Yeah, I think the thesis for that year, if I am, is that you need to just look at cash flow. And we're looking for companies. We started to build this position in the end of September. It's not an AI play at this point. Perhaps the Splunk acquisition will allow them to get into that space. But you've got a 2% dividend, a 5% dividend increase pretty consistent

year after year their earnings are up they have just ample um you know fortress um cash in in their in their pockets which will also help finance the splunk acquisition but their numbers have been good they report next wednesday i expect them to be good as well i don't know that the stock will go on a tear because again it's old school tech not AI. OK, you started a new position in the CME group. Tell me about that one. Yeah, this is a stock we've owned in the past. Would have been nice if we had it for most of the year. It's done really, really well. But what I like about it is that they've had nine quarters of double digit earnings growth, nine quarters of nine percent revenue growth. This is a stock that is just the margins are incredible. The P.E. is a little high, 23 for us, 24 forward. But historically

speaking, that's on the lower end of how they have they've traded. And what I like best about it for investors, it pays a two percent dividend to just increase that by 10 percent last quarter. But at the end of the year, they tend to give us a gift, a special holiday dividend. Last year, that was $4.50, Scott. Now, there's no guarantee what they're going to do this year. But just based on how profitable they've been in 2023, I would expect something similar. And just back of a napkin math, that makes the yield close to 4% on a stock with an incredible growth trajectory. So we like this space. Obviously, we're traders, so the CME is dear and dear to our heart. But I think it's an investment that, from a cash flow perspective,

will continue to do well for the next several years. I'm looking at your, before we go, I'm looking at your holdings here. And, you know, you've got some interesting positions relative to, you know, what's worked and what hasn't in terms of sectors, where the economy may be going and what would be more, you know, what's worked and what hasn't in terms of sectors, where the economy may be going and what would be more, you know, sensitive to that. For example, health care has not been good at all. Johnson & Johnson, UnitedHealth. Talk to me about that Merck, for example, which somebody, I can't remember who it was today, just initiated a hold on that stock. But what do you make of that space right now?

Yeah, I really like it. I mean, I liked it going into this year, and clearly I was premature. I think J&J is down 16% on the year. UnitedHealthcare, I mean, that's a monster. We've owned it for 11 years. I think that you put that in your portfolio, you forget about it. Merck has been crushing it quarter after quarter, top line, bottom line. You know, they're going to have some problems with off patent drugs in the future, but they've got an

incredible pipeline. So I really, really like Merck. I'm not sure why Johnson & Johnson has traded as poorly as it has. By spinning off some of the product company and really focusing in on honing in on pharmaceuticals, I think there's tremendous value in this space. It's also a baby boomer play. I still think that 10,000 people retiring every day, long, healthy lives of retirees, lends itself well to this space. It just, this year, unless you were AI, you really couldn't catch a bit. But I like it long-term for sure, all three of those names. What about Freeport, for example? Material's been terrible too. Think about copper. I'm worried about the economy of copper and electric vehicles moving forward, and I realize that we're not all driving Teslas today, but at some point you have to stand to make this assumption that if they really catch on, that you're going to have a shortage in copper at some point. And we think that Freeport is really well capitalized to take advantage of that market. It pays a good dividend.

It does have some exposure to gold. But like most of the names out there. You're just in a waiting game I think that waiting game continues for another six to nine months before you really see these stocks do anything from an expansion mode. But we're

just collecting dividends were writing calls and we're just waiting it out. We've been doing that for two years so what's another six months. All right. Yeah easy for you to say. Kev I'll talk to you soon.

You take care. Kevin Simpson, Capital Wealth Planning, joining us here once again on Closing Bell. Coming up, Disney shares having their best day of the year. And that after the company's latest quarterly results. Will the post-earnings pop have staying power? That's a key question. We're going to ask that to Needham's Laura Martin. We'll get her take on the quarter, whether these results mark a turning point for that stock.

Closing Bell bell right back. Welcome back, Disney shares. They're up more than six percent today. Take a look at that chart. That's after earnings topped expectation, thanks in part to ESPN and expanding cost cutting plans. Joining me now to discuss Laura Martin, senior analyst at Needham and Company. Welcome to Closing Bell. Nice to see you. Nice to see you. Nice looking chart, obviously. Is it justified? Nope. Still too early to tell. It's up today a lot because he said, Iger said they're going to do $8 billion in cash flow next year after cutting content costs another $2 billion. They already saved $3 billion this year because there were strikes most of the year. I don't know how you cut another $2 billion. And

the NBA rights are coming up. And we're hearing the NBA might get $4 billion more, which would make him fall short of the free cash flow promises. So, no, still too early, I think. What's the moment, though, where you say, OK, I can get on board with this? You know what? I got to tell you, if nelson pelts gets some board seats i'm sort of i i get turned i'm really much more positive because it brings a shorter term focus to these assets i think what's unclear i think wall street is whether the content piece of the business the core business can actually grow because if it can't grow there there's no dividend here still, right? Remember, they cut the dividend. They never restated it. So they need to either grow the top line in content or they need to shrink costs and they

need to bring back the dividend at Disney. So you've suggested in the past, and it was during the summer, I believe, when you said that Apple needs to buy Disney. Dan Ives, the analyst at Wedbush, was suggesting that Apple should buy ESPN. How do you view both of those scenarios playing out, if at all, either your scenario or his? Right. So the issue with sports is those rights degrade over time. So the NFL rights that ESPN have and ABC has a lot of those rights, too, which is also owned by Disney, degrade over 10 years. Then you have to renew them. So you sort of only benefit from the cash flow stream you get real time. and ABC has a lot of those rights too, which is also owned by Disney, degrade over 10 years.

Then you have to renew them. So you sort of only benefit from the cash flow stream you get real time. What's more important, I think, is the content business, which is the IP and perpetuity of the entire Marvel universe, the entire Star Wars universe, the entire Pixar universe, and all those Disney princesses that continue to make a lot of money, and Winnie the Pooh, every year. So, I mean, I think those are more of an annuity stream. So if Apple wants to go into the content business,

I would say they want the IP, and that's what we've seen from Amazon. Amazon bought MGM, had no rights, had no sports rights. And so far, Apple, the only sports rights it's bought are global, which is the soccer rights. It hasn't shown any inclination to buy these very high quality U.S. only rights, because remember, Apple has a two billion dollar two billion iPhones, only 200 million of them are in the U.S. So it doesn't really want just U.S. sports rights. To me, it's much more probable that it would buy global rights for this IP that travels so well to eight billion people around the globe. So why do you give Paramount the benefit of the doubt? Why do you have a buy on that?

That stock's been dreadful. Michael Nathanson's very well respected, said today on this network, quote, wrong place, wrong time with the wrong balance sheet. What do you see differently? And maybe the wrong managers. You know, I thought for a long time that that company was small enough to be purchased.

And I really thought that it was too small to act as a standalone streaming competitor. And they really held on and destroyed value much longer than I thought. So I'm perfectly willing to go on the record saying I was wrong about Paramount. And they have a much worse strategic position today than even they did three years ago. So, you know, my bad. Sorry. No, no. I want to get to the bottom of it because, you know, people who have owned the stock are owning it for strategic reasons. They think that the company is going, not everybody, but certainly many, including some who are on our shows, own the stock because of a strategic that they think is going to happen. And there was another suggestion by another analyst the other day or last week that they passed up some good opportunities

for strategic deals. What I would like Disney, going back to Disney, which is the bigger cap here, what I would like them to do is spin off 10 percent of parks and make parks a pure play because parks is growing at the speed of light. Massive. I've never seen margins as high in parks. I would like them to spin off parks so that you could have basically create a pure play content asset and a pure play parks asset. And when I think about, you know, the fact that Disney, Iger, Bob Iger has brought back the brain trust of Tom Staggs and Kevin, that's the kind of thing I think they would be suggesting to him. So that way you could have two different sets of shareholders in here and they could trade separately because I think parks really is a growth asset. And I think it's unclear that content is a growth asset anymore. So before I let you go, I want to hit on Meta, which I think this is right. You have an underweight on. I mean, after everything that they've gone through, that stock has been one of the best performers that we've seen in such a long time.

It's up. It has. I mean, it's up so much. No, don't like it. I think the problem is their core business is being eroded by TikTok. And I actually don't think I know for a fact Meta doesn't control distribution because 100% of its distribution is Android and Apple iOS. And it doesn't control its content because it's all influencers and they've abandoned Meta, the influencers, to go to TikTok or YouTube or somewhere else. So you don't control your distribution and you don't control your content. I don't know what kind of terminal value you have. That's their core business. Meanwhile, they're spending a ton of money over on the metaverse. And this generative AI is really interesting. But as you know,

they've just opened, they've opened it up to the world. So they're not capturing economic value. So he keeps giving away assets and non-earning value while he's spending a fortune on the metaverse, which I think is unclear there's ever a return on that. And he says the earliest return is 2030. So do not like Meta's strategic position at all. But I mean, they went through this, you know, they're in this year of efficiency, as Mark Zuckerberg has called it himself. Why is the stock up such a dramatic amount, though? Because the investors completely disagree with you. Yep. No problem. That's my job, to disagree with smart people. I think because you can cut costs, and that really helps your EPS for a year or two. But as you know, that's not an line and he had rising costs. Now he's cutting costs.

And I would say that has to reverse. He's told us next year he's going to spend more money on CapEx. He's told us he's going to hire a lot more generative AI guys, even though he's not charging for generative AI. So he's about next year. Meta is going to look like it did two years ago before the year of efficiency. And I expect the stock to underperform again next year. All right. We'll talk to you soon.

Laura, thanks so much. I appreciate the conversation. That's Laura Martin and Needham joining us here on Closing Bell. Up next, we're tracking the biggest movers as we head into the close. Christina Partsenevelos is back with that. Christina. The crypto rally looks overdone. Why not everyone is bullish on crypto? And Krispy Kreme's shares are down.

Don't worry. I'll explain why after the break. About 15 minutes to the closing bell. Christina is back with us now with the stock she's watching. Hi, Christina. Well, let's start with Bitcoin hitting an 18-month high today. The jump is helping trading platform Coinbase climb about 3.5%, as investors hope U.S. regulators will soon approve the first spot Bitcoin ETF. But not everyone's bullish. J.B. Morgan says the crypto rally looks overdone. They don't think fresh money is going to pour into that Bitcoin ETF. Instead, it's just going to shift away from existing crypto products. Looks like the end of a two-week rally for Krispy

Kreme shares after the donut seller reported weaker than expected earnings while keeping full-year guidance intact. And unrelated, Monday, Krispy Kreme is giving away a dozen donuts for the first 500 customers on World Kindness Day. I love freebies. Investors not so kind to the stock down 6%. Scott.

Christina, thank you. Christina Partsinevelos. Last chance now to weigh in on our question of the day. We asked, what is the biggest risk to stocks right now? Rates, inflation,

valuations of the market, or geopolitics? You can head to at CBC closing bell on X. The results are just after the break. The results of our question of the day, the biggest risk to stocks right now is what most of you said, rates 38 percent. Still ahead, Tesla tapping the brakes as those shares have their worst day in a few weeks plus win resorts reporting earnings in just a few moments in ot we're going to run through what to watch for when those results hit we'll do in the closing bell market zone.

CNBC Senior Markets Commentator Mike Santoli is here to break down the crucial moments of this trading day. Plus, Philip Bowe on the big sell-off in Tesla shares today. Contestant Brewer looking ahead to win earnings. They're out in overtime. Mike, I'll go to you. This is really about the auction today, right? Mostly, yeah. At 2 o'clock, yields spiked.

Stocks went down. 1 o'clock auction, 2 o'clock Powell. All of it did create a little bit of a test, a little bit of a jolt from the bond market. You got the 10-year yield about 462. That's where it was about four weeks ago. Guess where the 10-year yield about 462. That's where it was about four weeks ago. Guess where the S&P was four weeks ago? Right here. 43.30, 40, something like that. So yes, we're still in that mode. Never really got, as we've discussed,

escape velocity on the rally just yet, waiting for that 4,400 ceiling to break, and then just unstable underneath. We talk about the negative, about the uneven market. We have still with the S&P, though, held Friday's jobs day rally. So that one, you know, basically 43.30 or so was the low, but not by much. So there's gaps all the way down if we wanted to fill it. I think we can get down into the mid-4200s and still have it be a normal pullback, but it's not going to feel like it. Russell, again, we talked about it so many times this week, but let's do it again. It's at the lows of the day. It's down one and two thirds percent. This remains a pain point for the market. And I don't think it's telling us anything we don't know,

which is the earnings growth path is not really clear except for the very biggest companies. We do have tax loss selling. We do have rate sensitivity there. But it is something that will drain momentum and drain risk appetite, I think, from the rest of the market. So, yeah, it exerts a bit of a pull. All right. To fill the bow, looking at Tesla right here, Phil, down more than 5 percent off its worst levels. But it's a tough day. What's going on? Well, they have new coverage coming from HSBC, which is initiating coverage of Tesla. Take a look at this stock over the last month, Scott. Down 20 percent. 20 percent in the last month. And this was not a very negative note from HSBC, even though they start Tesla at a reduced rating. Basically, they're saying, be a little cautious on these guys. In the note,

they say, we see considerable potential in Tesla's prospects and ideas, but we think the timeline is likely to be longer than the market and the valuation is reflecting. That's all it took for shares of Tesla to come under pressure. That's all it took for shares of Tesla to come under pressure. Look, all of the EV stocks are down today. Look at Rivian, down almost 10 percent, despite doing better than expected with its Q3 results. Fisker, you know the story there. It was down yesterday when they canceled or postponed their Q3 earnings results. Scott, we get those on Monday morning. Let's see what happens tomorrow if they're under further pressure, because once they said we're postponing this, that's when the stock really started moving down. Yeah. Bill, thank you. Appreciate that.

Speaking of stocks moving down, Contesta Wind Resort's down about 2% ahead of the number. What do we expect? Well, wind shares are in the red for the year, actually, Scott, just barely. But it's almost as though nobody is getting credit here or giving credit for the Macau reopening post-pandemic. A few things that I'm watching for in Wynn's report. Is it losing market share? We heard from Melco the shift away from junkets and VIP has hurt. And Wynn was really amazing in this business, in this VIP business. Las Vegas Sands and MGM are all in on the mass and the premium mass segments in Macau.

I want to hear about that. The Vegas Strip continues to outperform F1 next week. We've heard high expectations from Caesars and MGM, who, by the way, just made a deal with thousands of union employees. Their win is at the negotiating table as we speak. What should we expect for wage pressure? And then the street is looking for earnings

of 75 cents a share adjusted on revenue of one point five nine billion. But boy, Las Vegas has been on fire. So beating that quarter after quarter gets to be a little bit. I mean, if it's repetitive, it's good. Repetitive. Scott. Well, we'll see what happens in overtime. You'll be covering that. We'll look forward to seeing you then. Contessa Brewer, thank you very much. Back to Mike Santoli. We're approaching the two-minute warning. Now, given the auction and given Powell, the drumbeat towards the CPI on Tuesday is going to grow louder by the day. It will. And I do think you have a lot of people leaning in the direction that it's going to be really friendly. You have what's going on with energy prices. It seems like some of the lagged effects of shelter disinflation

should kick in there. So I don't think people are bracing for something scary. But, you know, you are down a fair bit in yields and in Fed expectations. So, you know, 460s. Remember, we were at 5 percent both in the 10 and 30. Not couple of weeks ago. So I think it's okay if you kind of hang around this range. But between CPI and then, of course, NVIDIA earnings, and people think maybe that's going to be maybe the final fundamental corporate tone setter for this stretch of time before we decide if we're just in kind of seasonal trading mode after that. Glad you bring up NVIDIA because it's one of the few, along with meta mega caps that are actually in the green today. It is, but everything else is red, whether it's Apple. Microsoft was at a new all time high yesterday. Alphabet's given about 1%

back today as well. And that is the difference today. I mean, in the prior three days, you were up every day on the S&P 500 for a combined about half a percent. Right. So in other words, you barely eked out a positive close because enough of those things were working. The equal weighted S&P today is moving down exactly in line with the market cap weighted, meaning it is just about some fatigue on some of the big names. So, you know, whether it really amounts to much of anything beyond that. We'll have to see tomorrow. It seems as if you did get a little bit of brightening of investor sentiment with this rebound rally we got starting in late October. So you no longer have that idea that everyone hates the market. But I don't think we're at a point yet where people got too far over their skis with enthusiasm. It is much more about neutral. Let me see if the market gives us the year end rally after we've waited for it, you know,

for more than a month. Well, the streaks that we've been on have been pretty remarkable. Mike, thank you very much. That's Mike Santoli. And the S&P was going for nine in a row. Hadn't done that since 2004. So it's been a long time coming. Not going to happen.

We'll go out with eight in a row. NASDAQ was going for ten. We'll stop at nine. It's all good. It's been a good run. I'll see you tomorrow in the OT with Morgan.