Closing Bell - Closing Bell: 2025 Playbook 12/6/24

Episode Date: December 6, 2024

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.

Kel, thanks so much. Welcome to Closing Bell. Scott Wabner live from Post 9 here at the New York Stock Exchange. This is Maker Break Hour. It begins with surging stocks. The major average is closing in on yet another positive week, their third in a row now. We'll ask our experts, including the Wharton School's Jeremy Siegel, how far this bull market is likely to run when he joins us momentarily. In the meantime, the scorecard with 60 minutes to go in regulation looks like this. NASDAQ's leading the way again. As Meta and Amazon hit new highs, we're about two-thirds of 1% there.

Alphabet and Tesla are also higher, so we're watching that whole space today closely. Uber is having its worst week of the year on concerns over robo-taxi competition. Its stock is getting a lift today, but it's been a tough week. And Applovin, remarkable story, up another 9% today. Take a look at that. It's up almost 950% year to date. It does take us to our talk of the tape. Too frothy or just right?

That is the debate for investors right now as this bull market continues to run. Let's ask the Wharton School's Jeremy Siegel. He joins us now live. Professor, it's nice to see you as always. This has become somewhat of a Friday tradition, and it's a good one to have. I enjoy it too, Scott. Some are calling this setup Goldilocks. Is that how you see it? Yeah, I mean, take a look at the employment report. In fact, all the economic announcements over the last week have been very close to target. We had a little weakness in the household report, a little tick up in the unemployment rate, but everything

else is working exactly the way the Fed wants. I think we're going to have one rate cut on that December 18th meeting. But truthfully, I think only two or three rate cuts next year. I think this strength could last. And, you know, with the stubborn inflation, I think that the Fed is going to settle down somewhere between three and a half and four. You know, not the 2. nine percent that they put in the last SEP report in their September meeting. So, OK, one in January or December, you don't sound like you think it matters much at this point that, you know, in some respects, the Fed's been taken out of of the game. I mean, Beth Hammack, the Cleveland Fed president today said, quote, I

believe we're at or near the point where it makes sense to slow the pace of rate reductions. Market doesn't seem to really care. Well, I think I think you do care. There is an awful lot, and especially for the small firms, business loans that are based on that Fed funds rate, one for one, the prime rate, what used to be called the LIBOR rate, now it's called the SOFR rate, short-term borrowing rates of corporations and others. So there is a lot that is pegged to that rate. But for the big firms that can access equity, long-term bonds and all that, I mean, all those rate cuts or whatever the Fed is doing is already incorporated in those rates. So in that particular case, you know, that's already there.

But it could make a difference for the small and medium-sized firms. Sure. I mean, I do have some strategists who are kind of looking through all of that and saying, well, S&P can hit 7000 next year, if not more at this point, because the earning picture is going to be good. You're going to get deregulation. You're going to re-up the tax cuts and you're going to have other, you know, stimulating events around the economy and growth. Do you believe that, too? Well, the current estimate is a 17% increase. So it is very bullish.

I think we will re-up those tax cuts, you know, that expire at the end of next year. It would help if we got down to a 15% rate that Trump has talked about. I'm not too sure he's going to get too much more than a re-up on that. Deregulation is always good for the market and particularly good for the small and mid-sized stocks. So, you know, that sector could really shine while maybe the MAG-7, which an incredible 70 percent return so far this year, really might take a rest in the market. People are pretty bulled up about what's going to lie ahead in 2025. I mean, some wonder too much so. Ed Yardeni asked the question today as to whether there's too many charged up bulls.

Yeah. What do you think about that? I'm beginning to worry about that. When you see the bull bear numbers, there is a lot of bullish sentiment. I also worry because everyone thinks December is going to be up and then there might be a rest. When everyone thinks they know a pattern of the market, that sometimes tricks you up also. You know, the Santa Claus rally is certainly more than a than a fifty fifty but nowhere near a slam dunk and there's a lot of uncertainties with the week

we all know and and jay powell said so in in the interview uh... you know but andrew ross uh... torquen and uh... and and cnbc they're not going to react to what tariffs are with the immigration immigration effect is, because they don't know until they have some hard data. We don't have hard data. Stock investors don't have hard data.

That all, hopefully, will be revealed in the first half of next year, clarify a lot of uncertainty and give us information on where to position ourselves. So if we don't know and we clearly don't, if you say, well, we're going to get the tax cuts and we're going to get deregulation, but we're going to get tariffs, too. Do they offset one another and make you net bullish or are tariffs more substantial to the outcome of how this all goes? Now, I think the extension of the tax cuts, which I think is a very strong certainty, and even maybe a little bit more embellishment on those, and the deregulation together mean more than the tariffs. I mean, you know, Trump in his first term talked big on tariffs.

He did raise tariffs, to be sure, nowhere near as much as he said he would. It is that bargaining tool. That's what I think the market is hoping for. Not going to be these, you know, that's the position I'm coming into the room with. Trump has always said that's the art of making the deal. You come in with a really strong position and you bargain down from that point. I think that's where the market hopes that will be, because really, you know, a 20 percent or 100 percent tariff on China or the threatened 100 percent tariff on emerging markets, if they use an alternative currency, I mean, that's going to have some deep effects. But I think the market is dismissing it at this point. Yeah, interesting. Let's bring in Anastasia Amoroso. Professors, we broaden the conversation. She's iCapital's chief investment

strategist, and she's here at Post 9, as you all can see. Welcome back. Good to see you, Scott. How do your views match up with the professors? I think there's some really interesting points to pick up on. First of all, tariffs and taxes. You asked the question. I think what really matters is the sequence and the timing. And I do think there's a high probability that tariffs come before the taxes. So the markets are running up into the year end. But I think there's an actual risk when it comes to the inauguration date. It's not just the talk of tariff, but it might actually be enactment of some of those tariffs. So that could create for a bumpy start, for example not just the talk of tariff, but it might actually be enactment of some of those tariffs. So that could create for a bumpy start, for example, for the second Trump administration.

Taxes will be, the tax extensions will be being negotiated in the background. But Scott, if you recall in 2017, it wasn't a straight path to passing those tax cuts. It was a lot of negotiations. It was a lot of fits and starts. And it took the entire year. So that's where we might ultimately end up with tariffs first, taxes later. So my base case scenario is certainly pro-risk asset environment in 2025, but with a wide range of outcomes. Do you feel like froth is forming? Those are the words from Bank of America Securities today. Their bull bear indicator, you know, as the professor was alluding to, says no global exuberance, but froth is forming in crypto, in the S&P, and you have an overshoot risk in Q1. Do you agree or disagree? I don't fully agree with that,

because I do think there are solid underpinnings for the U.S. economy and therefore for the markets going into 2025. You've got the rate relief that's on the way. You've got hopefully deregulation relief that's also on the way. And Scott, one thing that really caught my attention actually looking at the data, the reason why the U.S. economy might have been so strong over the last few years, it's not just a solid consumer, but it's productivity growth. And if you look at the productivity growth over the last five years, it's averaged two and a half percent versus the prior five years where it was only one point four percent. So there's something tangible and real that's really supporting the economy. It's not just froth. Professor, we've had many people, I think you included, suggesting that the broadening of

the market will only get stronger, that tech is still going to do well, but it's not going to do quite as well as it has. And here we have a resurgence in a lot of those mega cap tech names. NASDAQ's up 3%, for example, this week. Meta, Apple, Amazon continue to hit new highs. Are we too quick to say that big cap tech's going to take somewhat of a backseat? Well, certainly, you know, anyone who said that a year ago for 2024 has not been right. And by the way, listen, think of all the portfolio managers that were light on the MAG7 with a 70% return. Maybe they are going to be buying in the next two or three weeks to show something at the end of the year in their portfolio. So certainly, you know, I can see that momentum

continuing next year. But as Anastasia said, I mean, I think productivity is really what is going to be the magic that could make the 25 market. We know, for instance, that the immigration is way down. I mean, even before Trump reaches office, that supply of labor is going to be down. And that's where AI comes in as a substitute of labor that can enhance productivity. We have seen an enhanced productivity, as she has mentioned. If AI produces some of the productivity gains that it promises, I mean, this bull market certainly will continue through 2025. Yeah, I think we should continue the discussion about the rotation, though, and potential rotation out of the MAC-7 names. You know, for example, big tech regulation is not going away. And given

some of the recent appointments, we might actually see the continuation of scrutiny around big tech. So that's one thing that I'm concerned about. The other one, semiconductors have certainly done great over the last year or so. But if you think about tariffs coming before taxes, and if you think about what rounds of tariffs and retaliation from other countries may mean, they may actually be negative for semiconductors as we've experienced in 2018. So I do think that maybe don't do it before the end of the year, but when you come into January and again before the inauguration, maybe take some of those chips off the table. And I will say, speaking of AI and productivity, Scott, the really big story to me this week is the AI software really starting to break out, really starting to outperform.

And I think that may continue next year. So, Professor, how about that? If you and we've been showing this all week, the diverging paths of software versus semis in the market, which really started about six months ago in a narrow way and then started to extend itself in the last couple of months. Is there a message in that? How do you view those spaces if you look at it from that granular level? Well, I don't usually go that granular, Scott. I mean, I think in terms of the AI revolution in general, the story, the narrative is still intact. It has the potential to be a game changer

for productivity. That is very, very good for stocks, you know, whether semiconductors versus the chips. And we still don't know. I mean, there's more than one firm that is entering. I mean, you take a look at a little weakness in NVIDIA today because of potential competition. We know there always can be competition. There always has. No one has stayed on the top of the heap forever, if you look at history. But it doesn't mean that this story has ended yet. And as I mentioned, the narrative is still very strong. So from the biggest to the smallest, right, on any given year, if you would say, OK, the Russell's up almost 19 percent, that's amazing.

I'll take that 10 times out of 10. But when you compare it to the NASDAQ up 32, you're like, well, they've underperformed. These small caps have. Right. And you've had many predictions that you were going to get a period of outperformance from that group because you're going to have, you know, better economy, higher growth, lower interest rates. And then those are the stocks that are going to reap the rewards of all that. Has it changed? Should we rethink that? First of all, I think the performance since the Trump election has probably been pretty

comparable. Remember, the small stocks really lagged early in the year. I think small stocks have also had to come to reconcile. I mean, in the middle of the year, we thought there were going to be a lot more rate cuts in 2025 than it now looks like. Those rate cuts on that short end, as I mentioned at the beginning of our program, really do help those small firms. So they've got a couple of headwinds there. I mean, they're looking forward to the deregulation. We know the NFIB, the Sentiment Index for Small Business, when Trump took office in 2016, it soared. We're going to get the data soon on whether there's a similar feeling among small business owners that this is the way to go. So it is very, very early in that rotation.

I don't think they're going to match the S&P this year, but next year, I certainly wouldn't be surprised at our performance. Let's throw a one month up at the Russell. You can, you kind of see what I'm talking about here. You know, you get a bump, Anastasia, and then, you know, over the last month, basically since Election Day, you're all but flat. You're back towards us. You go draw a line straight across. Right. But I think Professor Siegel is exactly right, is that this is not a one month trade. And this is a whole lot of catch up opportunity. If you kind of go back three years, you know, Russell 2000 has not really done a whole lot of everything, of anything, I should say. But going into next year is going to be about the America First agenda.

And that means the focus on domestic economy, focus on domestic companies. And so it is really going to be the time next year to differentiate between companies and sectors and factors. And personally, I would be prioritizing high domestic U.S. revenue exposure. And so small caps certainly tick that box. And then to pick up on the rate relief story, you know, fine, maybe the Fed doesn't deliver four rate cuts as we were initially expecting next year. Maybe it's two. But the fact of the matter is interest rates are still going to decline to 3.75 percent, give or take,

at some point next year, which is well below what we saw at 5.5 percent. So small caps are certainly feeling the relief now, and they'll be feeling that relief later. So maybe into year end, it's about the big tech that's outperforming, and that's really the momentum trade. But I think you use that opportunity to leg back into financials, regional, small caps, real estate. Professor, lastly to you, does the America First agenda that Anastasia was just referencing, does that take the allure of international stocks off the table? And when at a time when, you know, some started to say, well, I don't know, there's better relative value over in Europe, their rate cuts started earlier and they're going

to go longer and deeper than ours did. So maybe that's the place to go. But now after Trump's reelected or reelection, some are suggesting maybe not so fast. Yeah. And certainly if tariffs go as high as he's threatened again, they did not in his first term go anywhere near as high as he's threatened. Your conclusion would certainly be true. You're also dealing with 13, 14 times earnings in Europe, maybe 16 times earnings in Japan, 14, 15 times earnings in the emerging markets. You don't have to grow a lot to get a good return if there's ever a time when the S&P, which we have to expect because of

history, you know, comes down from its 20% plus annual returns back to a, you know, more normal 8% to 10% rate of returns. That's a time when, you know, certainly we can see those foreign stocks challenge or surpass the U.S. But, you know, with the bullet, you know, America's special, it has been for the last, you know, four or five years. At this particular point, there's nothing to see a turnaround in that yet. Professor, we'll leave it there. Good weekend to you. We'll see you soon on a Friday coming up. I'm certain of that. That's Professor Jeremy Siegel. Anastasia, thanks so much to you. Good weekend to you as well. All right, let's send it to Seema Modi now for a look at the biggest names moving into this Friday close.

Seema. Hey, Scott. About 42 minutes left in trade and booking holding shares are slightly higher after Oppenheimer upgraded its price target from $5,500 to $6,000. That is a street high, maintaining an outperformed rating on the stock. The tribal giant continues its year-to-date climb, being helped by a resurgence in international bookings, a stock up about 50% this year. It reported better than expected profit and revenue in the third quarter earnings back in October. And then there's shares of HPE surging after reporting a beat across the board in its fourth quarter earnings report. CEO Antonio Neri telling CNBC that it continues to bring new servers to the market and that artificial intelligence has been a, quote,

leading element of Wall Street's recognition of the stock. Also, they're expecting the planned acquisition of Juniper Networks to close in early part of 2025 as it awaits DOJ approval. Scott? All right, Seema, thanks so much for that. Seema Modi. Well, President-elect Trump says he's naming venture capitalist David Sachs as White House AI and crypto czar. Sachs co-founded PayPal with Elon Musk, which is why the move has some wondering what all this means for the brewing battle between Musk's ex-AI and Sam Altman's open AI.

That fight already growing more contentious this week. Our dear Jebosa is here with more. This is another very interesting development in what feels like it's a brewing battle. There are so many layers and wrinkles to this. Let me at least try to break it down. So now we have David Sachs' influence in the White House. It's official and it is largely aligned with what the other tech elites are taking, their positions, or how they want to shape policy in the next administration. Now, that growing circle includes David Sachs, of course, VP-elect J.D. Vance, VC Marc Andreessen, and, of course, Elon Musk, who's heading up Doge, all of whom believe in a generally lighter touch approach to tech regulation. Now, this also opens up another interesting dynamic in what you mentioned, Scott, the battle of AI kingmakers, Musk and Sam Altman, that has really spanned their founding of AI together,

then their falling out and the current legal battle. Now, David Sachs, through his venture firm, has invested in at least four of Musk's companies, including open AI competitor XAI. Then Altman this morning, he tweeted congrats to Tsar David Sachs and Musk responded with a crying laugh emoji, which could be interpreted any number of ways. Was it an olive branch? Was he making fun of Altman? I mean, who knows? But whatever it means, these potential conflicts of interest emerging in this incoming administration, they're on display. They're not in the shadows. And maybe

that is why Altman himself isn't too worried. Have a listen. I believe that pretty strongly, I may turn out to be wrong, but I believe pretty strongly that Elon will do the right thing and that Americans would be profoundly un-American to use political power to the degree that Elon has it to hurt your competitors and advantage your own businesses. And I don't think people would tolerate that. I don't think Elon would do it. Right. It would go, again, lots of things not to like about him, but it would go so deeply against the values I believe he holds very dear to himself that I'm not that worried about it. You might ask that same question of David Sachs because he is another tech elite in the White House and he will now have dual roles as policy czar, but he will also still be an investor in two of these most

important emerging technologies, AI and cryptocurrencies. His current portfolio at Kraft Ventures already has some of these names. Scott. I mean, you have this lawsuit, right, which really makes it interesting that Musk doesn't want OpenAI to be able to transfer from being a nonprofit to a for-profit venture. Some would look at that and say, well, obviously he doesn't because he looks at the lead, if you want to call it that, that OpenAI has on XAI from a fundraising evaluation and, you know, obviously maybe a number of other fronts as well. So it's obvious why he doesn't want that transition to be able to happen. What light can you shed on that?

Well, the question is, is he going to do anything about it? Right. And that was what was posed to Sam Altman from Andrew at Dealbook. And his answer was it would be extremely un-American. I mean, Musk, a lot of the tech guys that are in the White House, they say that they're capitalists, right? They don't want to interfere with market forces. So if you take that at its face value, then, which Sam Altman is, you don't think that Musk is actually going to do anything? The question is, Scott, which is like totally unanswerable, will the power corrupt, right? Will he be tempted to do things where he can now that he has the incoming president's ear? I mean,

these are such complicated questions. It extends past open AI as well. If you believe that generative AI is, you know, the most transformative, powerful technology in a generation, this will also have implications on how it's developed, what kind of guardrails, if any, will be in place. And we know that Musk is a lot more worried about the negative and sort of the scary impacts of generative AI, where someone like Sam Altman thinks that if you crack down on generative AI at all or put in, you know, guardrails, that you could hurt its innovation and development. Marc Andreessen is in that camp as well. So it will be so interesting to see how it plays out. Are there other CEOs out there that

you've been talking to people about who may be raising an eyebrow at the Musk-Sachs partnership, if you want to call it that? I mean, Silicon Valley going to Washington, what the fallout could be for any of these other companies? At lots of raised eyebrows. No one who wants to come out and say that publicly. In public, there's more of a let's get on with it. We know a little bit better how to deal with a President Trump this time around. Elon Musk is the wild card and it's divided. Some people in the tech world are happy to see someone, an innovator like him come at the expense of those mega caps who in public are saying, you know, they want to get behind this new administration. They're optimistic. But as we see through some of the other appointments like a Brandon Carr and the new DOJ head nominee, it's going to be a little bit more complicated.

I don't think that we have a clear signal that this era of hostility towards the mega caps is going to be ending in this administration. Such a unique period of time. I mean, because the regulatory headwinds have already been blowing against these companies from the current administration. Under, quote unquote, normal circumstances, you would have a look and say, well, some of our own, so to speak, are coming into the White House and they're going to have an impact on policy, on the way that AI is perceived. And that would be theoretically a good thing. I don't want this to have a negative spin in any way on this, because you could easily look at it that way and say, well, it's about time we not only have seats at the table, we own the room. So we potentially have our industry with really key advocates behind it. Absolutely. And I think that the idea of deregulation of having or less regulation and having seats at the table through people like Musk and people who have been pro

crypto, pro AI like David Sachs, that's encouraging, but this is going to be so nuanced, right? Where do their interests lie? Like you said, Scott, at the beginning, Musk directly competes with OpenAI. It also directly competes, by the way, with many of Google's different products. And he was reportedly on the call when Senator Pichai called President Trump, which raises all sorts of different questions. Can you even create regulation that would be good for one group of tech, like the smaller tech companies, and less advantageous for the bigger tech companies? All of this is going to be sorted out. And if you look at it, at least there's a seat at the table. At least tech is getting the

recognition it deserves. Yes. Is that good for investors? I don't know, Scott, because some of the mega-caps are the most widely held companies in the markets. And it's not clear that they're going to be getting a boost from this administration that wants to level the playing field and crack down on their dominance. It'll be interesting to follow. That's for sure. That was great. I appreciate you. Thank you. That's your Jabosa out on the West Coast for us. We're just getting started here. Up next, Morgan Stanley. Sherry Paul is here with her year ahead playbook. She'll join me at Post 9 next. S&P and Nasdaq hitting record highs yet again to close out the week. My next guest sees more upside ahead for these markets. Joining me now at Post 9 is Morgan Stanley Sherry Paul. Welcome. It's good to see you.

Good to see you. You say it's an eyes wide open market. What does that mean? Well, there's so many different things happening, both domestically and geopolitically. And then from an innovation standpoint, along with now policy and tax changes and deregulation, that the head fakes are going to be abound. And my encouragement is investors really just stay focused on earnings momentum and the attributes that contribute to earnings, which is different than trying to trade policy possibility. Aren't we doing that now, though? Aren't we kind of trading policy possibilities and probabilities, you know, tax cuts, tariffs,

deregulation? That's what this whole rally has been based on, the idea that all of those, probabilities, you know, tax cuts, tariffs, deregulation. That's what this whole rally has been based on, the idea that all of those, well, you know, you're going to have re-up tax cuts, you're going to have deregulation, you may have tariffs, but we've been trading that. Right. So trades, yeah, so I would agree that we're in a trading market right now where these bumps, this six to seven percent bump isn't necessarily based on earnings, although the other 27 percent that we got year to date was based on earnings, so that's pretty good. Which means that policy volatility is what people should expect, which is different than earnings momentum,

which is also why stock selection, rebalancing, and having your eyes wide open in terms of where you're investing in the pockets, that will be more enduring than just sort of a fadeaway. Okay, what are those pockets? Because we went from a mega cap tech dominant market to a little bit of a pullback and then the rest of the market got its act together. And now I feel like we're potentially at another inflection point. I'm not sure what to make of the fact that you have the resurgence in tech. What do you make of it of it as you say we're in a not to miss industrial revolution that tells me you're focused on tech focus on tech so if you go back to 2023 that market was 10 stocks 2024 we got 40 of the s p so we got a bit of the broadening

2025 is going to be a broader broadening but the the difference is that we should start to see companies that aren't already positioned for the download of AI are going to have to play rapid catch-up. And that's what I mean by sort of these corporate extinction events that harken back to the early 2000s. It's going to be very hard for companies to catch up, and we're already seeing that as an example in some of the companies within the chip sector. Do you like sectors and stocks outside of tech? Because I guess in some respects what I hear you saying is, I like tech, but I don't have to be all focused in the mega cap. No. I like the down, the derivative plays.

The derivative plays because AI is an equal opportunity installation across all business cycles. That's the difference between this moment and 2001. And that's why I think the opportunity is so big, because we're installing a technology and proven business models that already takes current earnings and improves them, expands them, and reduces costs.

It's a very different kind of industrial revolution than the uncertainty of the early 2000s around what the internet was going to be in this economy. Very different. You like staples in healthcare. Healthcare is the worst performer of to be in this economy. Very different. You like staples in health care. Health care is the worst performer of the year. I know. You don't believe that's going to continue?

No, I don't. Just like in the first part of the year, financials were the worst performer to start the year. And at one point in January, we were down 8%, and people thought we were going to have a recession. We were not in that camp. And now financials are one of the best performers, and I believe that health care will have that catalyst. It'll be too hard to time. I was going to ask you that. And that was the word I was going to use. The catalyst for financial stocks

is obvious, right? Good economy, deregulation, more deals, pipelines, pent up demand, blah, blah, blah. Go on and on and on. It's obvious to see why those stocks have done well. What is the catalyst for health care? Well, it's cost reduction, number one, just in terms of the ability to use AI at the white-collar level to get to the same analytic outcomes, especially in vaccine development, as an example. And remember, too, that health care stocks and pharmaceuticals and biotech in particular are driven by the ability to get approvals, and that sausage-making takes a little bit of time, but it sort of produces a J-like type return. So we're getting a good dividend,

and I think it's an important part of the portfolio, but our overweights, though, continue to be in tech and financials and industrials. Net-net for the S&P next year? What kind of return do you think is reasonable? What do you have in your own mind? Well, I think we're double digits, for sure, in my mind, but I don't think it's a straight climb at all. Just like, I mean, every single year, Scott, the market starts the year at some point lower. It's lower at some point

during the year than where it started. So we have a guaranteed inter-year decline. And I think given the policy and political volatility, we could see even a greater level of peak to trough volatility. So it won't be a straight line, but it'll be an opportunistic market for people to end the year in a positive territory. This has been a crazy year. We got close to a 10% pullback, but we didn't get quite there. And it was one of the longest periods without one. It's good to see you. You too.

Enjoy the weekend. Sherry Paul, thank you. Up next, a look inside the world of the name, image, and likeness economy, NIL in college sports. It's controversial and it is a very big business. We'll do it next. It's conference championship weekend for college football as the first ever 12-team playoff draws closer, but it's the action off the field in the name, image, and likeness, or NIL economy that is raising eyebrows, and some big concerns. Albert Samaha is a sports investigative reporter at the Washington Post.

He's been covering this quite closely, and he joins us now. It's nice to see you. Thanks for having me. You know, more people are talking about this now because of what happened recently with the quarterback star recruit, Bryce Underwood, supposed to go to LSU, and all of a sudden, now he's going to Michigan. And they say the billionaire Larry Ellison, who's obviously very familiar to our viewers, was involved, and Tom Brady.

What are we to make of all of this? Do we know how much he's going to get paid? We don't, and we probably never will. This is the future of college sports as it stands now. It is a place where there is money being thrown all over the place, not a lot of oversight to help us understand where that money is going, not a lot of regulations to determine how that money can move, who can pay, who can go to. So what we have is a place where someone like Larry Ellison can give as much money as he wants to a program like Michigan to get the best recruits moving forward. Why is there such a lack of transparency? Part of the challenge here is that it's so new. And this is something that

came swiftly after the Supreme Court decision in July 2021 that barred the NCAA from prohibiting athletes to make money. And since then, the federal government has, Congress has just left it in the hands of the states to determine how to regulate this. And what's happened in a lot of these states is this sort of competition to see who could have the least amount of regulation so as not to get in the way of the competitive advantages that they can have. How easy is it to track even the sources of where the money's coming from, you know, never mind how much money we're talking about, but who's actually giving it?

Very, very difficult. And part of the reason is only half of the states in America have any sort of laws requiring college athletes to disclose anything about what they're getting. And within those states, each school has their own discretion to determine what they're going to require athletes to disclose. So we filed a bunch of public record requests at the Washington Post to try to get any sort of information. We got some. 14 schools gave us a lot of good info.

Most public universities really didn't give us anything, and it's because they don't really have to according to the letter of the law. Is that going to change? There's no reason to believe that it will change. If anything, the only evidence we have is that it'll go in the other direction because the states where they are required to give information are worried that there is a recruiting disadvantage against the states where they don't have to give anything. What about the NCAA? I mean, what is its current role, and how does it see this? I don't necessarily want to

call it a problem. That's my word, not other people's words. But how do they see this developing? They have tried to do as much as they can to do as little as they can. And that has sort of been the root of the problem, is that they have sort of punted to the states and said, follow your state's laws. But every state has different laws. And so when the NCAA has started to pass these regulations on kind of eligibility rules, a lot of times it'll conflict with some state laws, not conflict with other state laws.

So these universities sort of have to decide, do we want to follow the state laws? Do we want to follow NCAA guidelines? There are several court cases that are currently determining what exactly the NCAA can do moving forward, but all that is really up in the air, and the NCAA hasn't done much to give clarity to the schools. What do we know about what the athletes themselves have to give up, so to speak, to the boosters and the benefactors when they take this money? They don't have to give up much except the knowledge of where they are in the market.

They don't know, a lot of these contracts don't allow them to discuss how much they're making. So they don't know what their colleagues are making. Depending on if you are a men's athlete in a high profile sport like basketball or football, or an athlete in a lower profile sport or a women's sport, they sort of have to give up more. Because for them to make money, they have to give up the time to sort of create content that will draw these corporations. While if you're a men's athlete in a higher-revenue sport, you don't have to give up much, maybe a little bit of time for some charity work in exchange for six-figure checks. I was going to ask you quickly about non-revenue sports and the fallout.

If all the money is being made by men's college football and men's college basketball, what is the fallout for all of these other sports? The fallout is they are not getting the same amount of money in any degree. And sort of this fundamental question in terms of the economy of college athletics is, are we paying athletes based on the money that they bring into their schools, or are we paying athletes based on the labor that they're putting out? And that question has yet to be answered, either by the NCAA or the states. And so what happens is you have one class of athletes who can only make money

by putting in the time to develop social media followings that will draw these business interests to their brands, and another section of athletes that are really just getting paid to play. Interesting reporting you've done. I appreciate you spending time with us, Albert. Thank you. Thanks so much. That's Albert Samaha, Washington Post investigative reporter. Up next, we track the biggest movers into the close.

Seema Modi is standing by with that. Hi, Seema. Scott, you've been all over the breakout in software stocks. We're now looking at a number of lesser known mid cap names that are getting a bit of love today. We're going to tell you which ones and why they're moving after this short break. 12 for the bell. Let's get back to Seema Modi now. For the stocks that she's watching, Seema. Well, Scott, the software trade is broadening out beyond the sales forces of the world. Take a look at DocuSign sharply higher after that third quarter beat. The CEO telling CNBC that strong demand is coming from enterprise customers.

And then there's some smaller names also on the move higher. Asana, it's a work management cloud platform delivering a strong Q3 beat, seeing a strong demand for their products in the AI studio, shares up about 42%. And then Viva, it's a life sciences software company seeing a similar story, better than expected earnings, expectations that they will see stronger IT spending in the coming year. And that is helping shares outperform. Meantime, the momentum not faltering for Applovin. That stock is up this week and now up more than 900% for the year.

Scott? Yeah, it's incredible. I mean, it's only up 6% now. I think it was up like 10 earlier today. Again, Seema, thanks. Seema Modi. Still ahead. We'll tell you what's behind the big bounce. Speaking of bounces today in Lulu, closing bells coming right back.

Taking the market zone. CNBC Senior Markets Commentator Mike Santoli here to break down these crucial moments of the trading day. Plus, Julia Boorstin on the latest on a potential TikTok ban. What it means for Meta. That stock's up today. And Courtney Reagan on the big move, speaking of up in Lulu. Julia, we'll begin with you. Meta, Snap,

who else do I need to watch because of this TikTok news today? Well, first and foremost, Meta. Those shares hitting a new all-time high today on the court ruling to uphold the law banning TikTok on January 19th if Chinese parent company ByteDance does not divest of it. Now, Snap and YouTube parent Alphabet are also higher on the expectation that they will gain users, advertisers, as well as creators over from TikTok if it's shuttered. Meanwhile, CEO Mark Zuckerberg today announcing on his Threads platform that Meta is releasing a new, more efficient version of its Lama open source platform at a lower cost. Meta is saying that this text only model of Lama has improvements in reasoning, math, general knowledge, instruction following,

and tool use. And with this, Zuckerberg also announcing that Meta AI now has nearly 600 million monthly actives, up from the 500 million announced in October. He also noted that Lama has been downloaded more than 650 million times. Scott? Julia, thank you. Julia Borson. Courtney Reagan, Lulu shareholders have been waiting for a day like this. What's going on? Yeah, that's true. I mean, it was a positive surprise, really, for Lululemon nearly across the board.

We're seeing shares lifting sharply higher today after the results after the bell, but they're still down 22% year-to-date. They're far underperforming the ETFs that track retail like the XRT and the XLY. But still, comparable sales did reaccelerate from last quarter, up 4% in total, with America still lower year over year, but at least slightly better than last quarter's sequential rate. And international comparable sales also stronger than what was turned in last quarter. Now, investors are still wondering about the U.S. and whether growth can pick up again, even further reaccelerate. CEO Kev McDonald said the team is working to correct merchandise missteps,

injecting more, quote, newness into the women's mix. He's confident it's going to help by the first quarter. Even in the U.S., we're very confident about the growth story. There's no metric that shows any concern to me in terms of the interest in the brand, the health of the brand, the attraction of the brand. We've acquired millions of new guests in the U.S. Our membership's at 24 million. We have a highly retained guest.

We have less historical newness. The team's focused on it. McDonald did say that Black Friday set records for the most visits ever to its app and website. And remember, Lulu doesn't run blanket promotional events like others do on that day. Still, Megan Frank, the CFO, calling the holiday quarter forecast prudent. She calls out the shorter shopping season and, quote, uncertain macro conditions as reasons for that prudent forecast. Scott. All right, Court, thanks so much.

Courtney Reagan, Mike Santoli, hello and goodbye. Yes, sir. We're less than a minute away. Look, it's a quiet market, but it's interesting in the sense that, you know, the equity market has noticed a little bit of deceleration on the economic numbers. The jobs report today with a soft underbelly. And, you know, industrials are down two and a half percent this week. Banks are down two percent this week. But you have the magical rotation of some of the growth stocks and also some of the real spicy stuff working. It's all on trend for now. The market's supposed to hesitate in early December before a strong finish. So everything is very much in line. But you have some pretty interesting storylines developing going into next year,

between all the risk appetites running into speculative small cap and then of course the larger market at a pretty high valuation already great weekend to you record highs s&p now jack and only 10 points away from 6100 now in the s&p that's something to watch and we'll take that into next week everybody have a good weekend