Closing Bell - Closing Bell: All-Clear for Stocks? 11/3/23

Episode Date: November 3, 2023

This week we got a jobs report, Apple earnings and a Fed meeting… and stocks rallied after each one of them. Is this the all-clear for stocks investors have been waiting for? New York Life Investments’ Lauren Goodwin gives her take. Plus, Apple shareholder Bryn Talkington of Requisite Capital Management reacts to the company’s sales numbers. And, Morgan Stanley’s Chris Toomey explains how he is advising his high net worth clients right now.

And welcome to Closing Bell, everybody. I am Brian Sullivan, in for Scott, live from Post 9 here at the New York Stock Exchange in this make-or-break hour. Not sure what we're breaking, but we're going to try to make it with stocks on track for their best week of the year. You're welcome, America. The Dow, the S&P, and NASDAQ all on track to close the week up more than 3%. Small caps doing even better for once.

In just a few minutes, we're going to speak with Morgan Stanley's Chris Toomey. He runs one of the highest ranked private wealth advisory teams in all the land. He'll tell you what he is telling his high net worth clients right now. That's ahead, but we begin with our talk of the tape. This week, we got a jobs report. We got Apple numbers. We had a Fed meeting. We had a treasury refunding. And guess what? Stocks rallied after each and every one of them. Is this then the all clear for stocks that investors have been waiting for? I don't know, but our guest does. Lauren Goodwin of New York Life Investments. She is here at Post 9. Lauren, welcome. I don't think it's an accident

that every time you and I do the show together, the market goes up. Have you noticed that? Look. It's it. We know what to do. Lauren, welcome. I don't think it's an accident that every time you and I do the show together, the market goes up. Have you noticed that? Look, we know what to do. There we go. Let's do it. What are you telling your clients? Are you shocked by this rally? I'm not shocked by this rally, but I'm not sure how much longer we have to go. The employment report that we saw today, to me, is a pretty clear signal that the last of our economic dominoes are beginning to topple. It means we probably have a couple more months of this resilient economic data that we've been seeing. A little bit of edge off the Fed that I think could be supportive to stocks. But it really is a tactical improvement from our perspective with recession right around the corner.

So, OK, recession right around the corner because I posted this on X, formerly known as Twitter. I thought today's jobs number was terrible. And the headline number I don't watch. I look at the household survey, 384,000 decline on the household side and revisions downward. How do we read this? Yeah, it's a tough number, but it's it's not a one off. In fact, every jobs number gets revised down almost every month. And other data we're seeing

continuing claims, the productivity related employment data, temporary joblessness. These are all figures that have been pointing in the same direction. And that's important because, A, we're right on time. The Fed's lagged impact of monetary policy usually takes 18 to 24 months. We're about at 20. This is exactly what we would expect to see. And historically speaking, when you start to see this type of early softening in employment, it accelerates pretty quickly. Well, I brought this up with Bill Gross last night on last call, and I said to him, I said, I'm not putting on the tinfoil hat or anything, but sometimes the government data doesn't always match up with maybe what your ears and eyes see or people tell you about it.

We just had a 4.6 percent GDP print. So I'm hearing you say you're a little bit concerned, but the macro government data shows that it's the greatest economy in the history of the world. Well, first of all, I think you'd look amazing in a tinfoil hat. I think you should consider that as a fashion choice. Just saying. But what you're describing is really a matter of leads and lacks. The economy has been evolving over the last 18 months, really, since the Fed started hiking rates the way we would expect it to evolve. And the Q3 GDP data doesn't tell us anything about the way employment is going to evolve in the next couple of months. Yeah. And another cheap plug for last call, because I'm here, so we're going to do it.

We asked about, so it was Apollo Investments came out with a really interesting chart and basically said based on earnings yield of stocks against the 10-year yield, Apollo felt that the U.S. equity market, the S&P 500, was the most overvalued in 20 years on that one metric. So I asked Bill Gross last night if he also felt that the market was overvalued, and he answered in a very Grossian way, and here it is. Typically, a P.E. ratio of 14, 15 times is more appropriate. You know, it's true that the market hasn't adjusted to that. And maybe it's a new market this time.

It's a new Oldsmobile as opposed to your old father and mother's Oldsmobile. But in any case, I think at 18, 19, 20 times, the P.E. ratios are stretched. P.E. ratio stretched. Overall stock market is overvalued. Agree or disagree? I agree. Look, as a macro person, here's my perspective on the Grosian perspective. You it is really difficult on a five year or a 10 year basis to bet against U.S. equity, not just from an economic fundamentals perspective, but also from a the way world is turning, with the way that U.S. companies, not just in the foundational layer, but also in other aspects of artificial

intelligence and other developments in technology, are really taking the stage. It's tough to bet against U.S. equity long term. It's tough to bet against America long term. Sure, I'm with you. I mean, I got an eagle on my shoulder. And if Congress, if D.C. just shut down for like two years, we might be able to just get something done. But that's different. Well, on a tactical basis, I do expect that we'll see equity market weakness. But but valuations aren't a great timing indicator. And so when we look at timing of market weakness, we're really looking at when do jobless claims start to materially rise and when do earnings start to to fall off? That's when the equity market says, oh, we're in recession. And that's when we see valuation weakness. It's not going to come just

because valuations are high right now. And again, I think that transition might still be a couple months away. Because New York, if I'm a New York Life client, I'm thinking decades, not years out. And the market goes up 75% of the time. So you want to invest. People who trade or timers, you're sort of sounding a little bit of an alarm. But if you're investing for 10 and 20 years from now, you should always just be investing in the market, correct? Sure, but I think even in the tactical format, we are beginning to move more defensive

in our portfolios from a tactical basis. But if you're thinking about the course of 2024, it is just as important to think about how you get back in the market, because that's when usually the economy is feeling a little icky. The market's starting to pick back up, but you're not sure. That tactical call is just as important. And so as we're starting to think in defensive terms right now, we're encouraging our clients to think about when you start adding, what are the indicators on that side as well that make you feel more optimistic? Well, let's expand the conversation and bring in

somebody who's no doubt been champing, and it is champing, not chomping at the bit, to get into this dialogue, and that is CBC's senior economics correspondent, Steve Leishman. Steve, was this jobs report as grim as Lauren and myself sort of think it might be. No, not at all. And you know me better than that, Brian. I'm more likely to chomp than to champ. It's just not your fort. It's also not forte.

Champ is not my thing, you know. Here's the thing. I think the number was weaker than it appeared because of striking workers. And Diane Swank was talking about this earlier. It's not just the 33,000 that the number was light because of the striking workers. There are other workers who were not at work that weren't actually on strike that will probably come back to work next month. So that's good. You had 100 and let's say let's say that number should revise up by 40 or 50,000.

That's that's one. You shouldn't be more than 100,000. The other thing is, from the market's point of view, you still coming down in a way that is easing off pressure when it comes to the inflationary concerns that are out there. And the result of this, Brian, again, this is from the market point of view, is that it's brought down this outlook for a rate hike is just like off the table right now. You look at these probabilities, they're just barely double digits. And then the other side of that is that you've had the probabilities of rate cuts come back into the market. And one more thing, Brian, if you give me a second here, what interests me about this are these numbers,

but also the Fed's response to this number. Powell didn't push back on these pricing on Wednesday, and we had Tom Barkin on Squawk on the Street this morning. He didn't push back either. Here's what he said when I asked him, are you worried the market has priced out these cuts too early or these hikes too early? I'd like to think the markets responded to the data. And so what we saw today was data that showed a gradual lessening of the job market. I think that's what those who would like to not see another rate hike would want to see. We'll see what the inflation comes in. If the inflation comes in relatively hot, the market will react, I'm sure.

So from an economic point of view, I think the numbers were OK. And from a market point of view, I think they were Goldilocks. Steve, a question from me. How long do you think that this lasts? Because from my perspective, we're seeing the Fed grapple with tightening financial conditions, which are certainly tighter than they were a couple of months ago. that this lasts? Because from my perspective, we're seeing the Fed grapple with tightening financial conditions are certainly tighter than they were a couple of months ago. Inflation, the data is telling somewhat different stories for them. Do you think that this Goldilocks position

can can keep them stable for three months, six months, soft landing? I think they can. Look, what you need is you need these inflation numbers to come down. If I showed you an inflation chart right now, it wouldn't look as good as that wage chart does because the decline in inflation has stalled a little bit. Brian will tell you we're going to get a little help in the coming months from the oil prices, which, by the way, we're off today and have been off some of the higher levels that were associated initially with the outbreak of violence in the Middle East. So that's going to be good news for the inflation numbers. I think that you always have this question when something starts to come down, does it come down and level off or does it keep going down? The leveling off is the soft landing. I honestly, Lauren, don't think anybody knows if we were here a year ago. Remember the certainty of the recession that hasn't happened. I'm a little worried about the banking system and the impact of these higher rates on the banking system and their ability to continue to lend into the economy.

If we can get through that particular gauntlet, I think we're going to be okay. You know, Steve, we talk about, you mentioned the recession that never came, and that's an excellent point because there's a lot of people out there that were vocally calling for effectively a recession or even saying we were in recession like a year ago when none of the numbers belie that. So when I look at your your graphics about the probability of rate cuts, is it possible that Wall Street's also getting that wrong? Because as I've heard from you when you're talking to chair powell i mean he seems like he's saying loud and clear to steve leishman and others in that room when you ask him higher for longer yeah i think that's right but but here's why brian and i probably

should have made this clear here's why i mentioned that the fed has not pushed back on these numbers when we were in a situation before where the market was pricing in cuts, you heard reasonably vocally from the Federal Reserve that they disagreed with the market's outlook. It feels right now, especially that Barkin quote, which if I could get a little bit into the semantics of it, he's saying we're on the same page as to the reaction function here.

When he says the market is just responding to the data, he's also adding in a way that I don't think is wrong. And I think that's important there. So, look, we could have the inflation dynamic wrong here. We could have the economic dynamic wrong here. But there is not a big disagreement between how the Fed thinks things are going to work out, how the market think things are going to work. And that's a difference from how things were in previous years when those cuts were priced in. Well, many have called eight of the last two recessions. Exactly. As you know. Exactly. Steve Leisman, appreciate it. Have a great weekend. Thank you very much. Thanks. Jamming out with the Stella Blue Band, no doubt. All right.

Lauren, final comment from you, because if our audience does believe we're going into recession, as you just said, if they do believe that, OK, what do we do? Well, again, you can hoard beans and, you know, like and wear tinfoil hats. I'm telling you, we just missed Halloween, but maybe it's time to still get started. Those are the same people hoarding the beans. Look, I think in the near term, investors understand what a defensive playbook looks like. You move up in the cap scale, moving closer to mid and large caps rather than small caps. You're looking at quality. You're looking at profitability across asset classes. For me, one of the things that's important in this cycle is how that might look a little bit different, that defensive playbook, compared to last cycles.

Why? Because the Fed's programs during the pandemic and some of the reason for the inflation we've seen is also a reason why some of the typically riskier asset classes, tech stocks may be one of them. I think certainly the high yield asset class are higher quality than they've been in the past. They've been able to build fortress balance sheets and a little bit of resilience again. just like the COVID savings for the households. Exactly, for the consumer. Like it lasted a lot longer than people thought. People didn't realize exactly how much people had saved.

Exactly. And so if we can take a lesson from that and apply that to the sources of resilience for this economy, I think it makes a defensive playbook more robust and more specific to the market environment today. There you go. Lauren Goodwin, great stuff. Really appreciate you coming down and schlepping in on a Friday. Thank you. Thank you. All right. Let's get to our question du jour of the day. We want to know, will the S&P 500 end the year higher or lower than it is right now? It's a binary choice, folks. Go to at CNBC closing bell on X, formerly known as Twitter, to vote. We will share the results later in the hour. Right now, let's get a check on some of the

other top stories to watch as we head into the close. Christina Parts Nevelis is here with that. Christina. Hi, Brian. Well, Expedia having its best day since 2020 after the vacation booking giant posted better than expected earnings and revenue. Executives said travel demand is still resilient during the quarter, especially in Asia and Latin America. The company also announced a new $5 billion buyback, and that's helping shares up 19% right now. Meanwhile, Bill Holdings is hitting its lowest level since May 2020. The cloud-based payment service provider beat on earnings and revenue for the prior quarter,

but that's getting overshadowed by weak adjusted income guidance for the current quarter and full year. KeyBank is among several firms weighing in on the numbers. Analysts over there are cutting the stock to sector weight, saying macro headwinds and sentiment will keep challenging this stock in the near term, and that's why shares are down a whopping 26 percent. Brian. Christina Partsenevelis, thank you very much. As always, we'll see you soon. We, thank you very much. As always, we'll see you soon. We'll see you toward the close. All right. We are just getting started here on this Friday. Closing Bell and up next, Apple pulling a David Bowie. It's under pressure saying sales. It's something they have not done since the iPhone was invented. We'll get an

important update on Apple heading into the close and get a shareholder's take on exactly what to do. As always, we are live from the New York Stock Exchange, where you are watching Closing Bell. The Dow up 287, headed for its best week of the year. All right, welcome back to Closing Bell. Apple stock not having a great day. Shares are down, and yeah, profit and earnings did top estimates. But really, that's not the big story with Apple. The big story with Apple is that sales have now dropped for four straight quarters.

And that is something that has never happened in the iPhone era. Hasn't happened since 2001. But we are talking about Apple, a powerhouse. So what do you do right now? Let's bring in Brent Togedon of Requisite Capital Management. You got to love the hasn't happened in 22 years thing, but is it a real reason to be concerned, Bryn? Yeah, well, first of all, good to see you, Brian. I don't think it's a real reason to be concerned long term because while their sales are slowing, which definitely

is going to put a pressure on the stock, I think, for the remainder of the year, what is growing, what is ramping up are services, which, you know, services, the iPhone sales were, what, $43 billion. Services came in at $22 billion, which is now number two on the revenue line, up 16%. And on the call, they said that's accelerating, continuing to accelerate. So I think if I'm a long-term investor, which I am here, they have a user base of over 2 billion. They had wonderful numbers all around. And so I think that as investors, you want to say long-term, this company continues to ramp up. They're adding users. They have a service flywheel. But short-term, absolutely. You know,

can the market rally without Apple? We've asked this question a million times. I think today today tells you especially. Absolutely. I do wonder about the China problem. You know, Huawei came out with its own phone, Huawei, an arm of China, the Chinese government. And just having been there a few times, I could say it's going to be it's going to there's going to be a lot of social pressure in China to purchase the Huawei phone over the American owned iPhone just because you want to show pride in one of your hometown companies. And China's a massive market for iPhone. Is that an is that an overworry, Brent? Well, right now it is.

You didn't you didn't see that. That is not the reason for their weakness this quarter. And actually, in mainland China, they had record sales. And then in urban China, the iPhone is the top, is one, two, three, and four best-selling phone in urban China. And so the weakness actually came with the Macs and the iPads. And so if you take those out, which you can't do, the iPhone actually had record sales in China. So I don't see that read through. I do think that's a longer term risk. I think it's hard to put numbers on it when they're not seeing that right now. So I think that's a bit overblown because it really goes back

to the Mac and the iPad is what caused the weakness in China. I know you're a halftime and fast money frequenter. So I'm going to pull a little fast money game out. Would you rather? Why not? Fast money, 5 p.m. Eastern. Would you rather own Apple or Microsoft? Microsoft, I mean, I own both going into the end of the year and first quarter. I think Microsoft, Microsoft earnings. I mean, they crushed it on every on every single metric. And then you also have Copilot just launched for everybody this week. I think the adoption of Copilot is going to be exceptional. And so we'll get that next quarter. So I think from a momentum perspective, Microsoft over Apple. Really? And you're talking about Copilot,

which is the AI sort of assistant. It's not that paperclip that used to exist about 15 years ago. It's much better than that. Let's hope it's not clippy. Is Microsoft just a better value or is it just purely an AI play at this point, Brynn? Because Apple, we talk about AR, augmented reality. We don't talk a lot about AI with Apple. Yeah, well, I mean, I think AI is such a nebulous term, first of all. It means so many things to different people. What I want to know is who's monetizing what and when. And so you already see with Microsoft, you know, with their partnership and their ownership of OpenAI,

not only is that vertically integrated pretty much in every part of Microsoft, they're now coming out and able to monetize it immediately, not only with their intelligent cloud, but also Copilot, which is a use case for everybody. So I think they're both wonderful companies. I just think as an investor over the next few months, I feel like Microsoft has more positive metrics that will have people buy into the stock with positive energy than Apple, which clearly was a disappointment and that it can't be that it's not positive today when everything is up, you know, tells you what sentiment is on Wall Street right now. I know you own NVIDIA, so it's probably a dumb question, but do you lose any sleep at

all about owning NVIDIA at this multiple, at this valuation? Well, I mean, it's not that expensive of a stock, first of all. I mean, it's been historically it's a stock, first of all. I mean, it's been, historically, it's been much more expensive than it was today. And so I think you're going to continue to see with NVIDIA over the coming quarters and years, okay, because I do believe when Jensen says over the next decade that there's going to be a trillion dollar spend converting data center CPUs into GPUs. That's not all going to occur in the next two quarters. So it's a volatile stock. But long term to bet against Jensen and team is just

has just been a losing a losing game. And so I'm definitely along the stock and happy to own it and excited to own it over the next few years. All right. Some good names there to own. You heard our probably our maybe you did in our macro conversation at the top. Is there anything about the macro economic landscape that worries you right now, Bren? I think right now, you know, we go into seasonality, which is real. And actually, if you look just at the NASDAQ, to put some context around seasonality, the NASDAQ median return for November, back to 1985 is 3.8 percent. So that's a really healthy return. And so I think investors want to be invested the next two months going into the end of the year.

What does concern me, though, is ultimately inflation is the key thing. I do think that the fiscal policy is fighting the Fed. There are billions and billions of dollars, Brian, that are still yet to be spent from state and local governments from the American Recovery Act. And that is fighting the Fed. And so how do you bring down inflation when fiscal policy is actually going the other way to stimulate the economy? And so ultimately, yes, longer term, I think that the market's going to be more range bound because I don't think inflation is going to come down to that 2 percent even remotely as easy as the market would tell you today. Bryn Chalkitin, Requisite Capital Managing Partner. Bryn, always a pleasure to see virtually. See you. Have a great weekend. You too.

Thank you. All right. Up next, it is your big money playbook. Morgan Stanley's Chris Toomey is back. He'll advise you on how he's advising his high net worth clients right after this break. Stick around. Welcome back to Closing Bell and happy Friday. And it is a happy Friday because investors, well, you're probably making money today. Stocks across all shapes and sizes, big cap down to small cap, whatever, having their best week of the year. But as you also heard at the top of the show, some are worried about a real economic slowdown. If that happens, what would it mean for stocks? Joining us again at Post 9 to talk about it is Morgan Stanley's Chris Toomey. He runs one of the highest rated private wealth advisory teams in all the land. Chris, so great to get some free advice. We appreciate you coming down here. Thanks for

having me. You made the comment that rate hikes are not like a cobra bite where you get bit and then you see the effects right away. It's more like a boa constrictor where it's a it's a slow, horrible process. I don't I don't not sure I like the analogy. But that said, what do you mean by it? And it sounds like you feel like it's going to take a while for us really to feel the impact of these rate hikes. Yeah, I mean, I think we are starting to feel it. I think everyone recognized that rates higher for longer was going to be a problem for the economy.

And I think it's the issue that we're seeing is it's just taking a longer time for us to see it affecting the economy. I think if you look at why that is, I think it's the tremendous amount of liquidity that was put into the system during COVID. And now we're starting to really feel kind of the air coming out of the economy, that debt situation, that debt problem. We saw it last week with regards to the Treasury and the amount of issuance you're going to see there. You've seen it in the corporate markets with regards to the fact that corporates have been a lot less likely to issue debt in this market because of the higher rates. And I think the biggest problem that we're starting to see is the consumer. Consumer savings rate is now at 3 percent, well below historical averages. And if you look at credit card debt, it's over a trillion dollars.

But I push back on that because I've looked at it. I would say you're right. The overall credit card debt's up, but debt service as a percent of income is still what appears to be a manageable level. Depending on your quartile, right? So if you're somebody in the bottom quartile or third quartile, you know, paying 20 to 25 percent is not going to be an easy thing to do, even if your income is going up, right? So if you look at the basic math on that, a trillion dollars at 20 percent, that's 200 billion dollars that isn't going into the economy, that's coming out of consumers' wallets. Then you throw in student loans. Then you throw in any of the other issues that are being financed now, whether you look at autos or other parts of

the economy. This is a weight that is going to start weighing down on the overall economy. And I do worry about the middle class. I don't want the viewers, the listeners to hold me to the number because I'm just going to pull it from memory, but it is directionally correct. According to Equifax or TransUnion, one of the two, half the people who had student loan debt deferred for three years bought a home or a car or both. So they weren't paying into student loans. So they just bought something else. And that's great for them, except I'm now worried they're going to have both those payments or triple payments. Exactly. And some of those payments going up.

And I just don't, with everything else inflationary, I do worry, how is that going to ultimately play out through the economy? You can't live on the credit card forever, can you? No. I mean, unless you're the U.S. government. Yes, exactly. But that might not necessarily be the case, as we saw last week, right? You know, the concern right now is if you

look at the servicing that the U.S. Treasury is doing on its debt, it's well above what we'd expect. But they can print money and, you know, Joe Sixpack in Ohio can't. Right. That's true. But what you can see is a crowding effect, crowding out effect in the Treasury market, which is affecting other parts of the market. Right. So if if the Treasury is issuing more and more debt because the interest on that debt gets higher and higher and the deficit gets larger and larger, you have other people that are going to be leaving the corporate market to buy Treasuries, leaving the corporate market and high yield market to buy treasuries and leaving the equity market, which we're seeing this year and buying treasuries,

right? And five to six percent for a lot of investors, if your required rate of return is seven percent, that's pretty good right now. But here and here's the sad reality. And it kind of a little bit off topic, but it's Friday and I'm here and I'll just do what I want anyway, which is basically for the for the higher net higher net worth people, your clients, for people that have assets and have cash, higher rates can be a very good thing. Absolutely. And I worry that what we've seen with the Fed is they're going to exacerbate wealth and income inequality so massively because poor and middle class people are going to suffer from higher rates and wealthy people are going to take advantage of higher rates and actually have more money to spend because they're going to get 4% and 5% and 6% tax-free interest owning these bonds.

And, you know, you put a million bucks into it, you know what you do? You go to Vail for free because the federal government just paid for your trip. Well, I typically like going to Snowbird, but I get your point. Utah, I can't, you Snowbird, but I get your point. Utah, I can't, you know, it's all right. So I think, look, and that's something that we as investors are taking advantage of. Like if you look at the private credit market right now, private credit's yielding eight to 10 percent instead of being equity at the bottom of the cap. So how do our viewers and listeners who have the means and ability to do that, how do you invest and play

in the private credit market? There are opportunities. Besides call Chris to me. Yeah. And there are opportunities there. I think the point being is, if you look at the equity market right now, there are greater risks in there that are being priced. You talked about Bill Gross and equity risk premiums or Apollo and equity risk premiums. You talked to Bill Gross. He sees some of the same things. These things are all interconnected right now. What is one of those risks then? So the risks are that if you really have a problem in the credit markets, whether it's in the consumer, whether it's in corporates, you have to have a revaluation with regards to equity. And the idea that earnings are going to be 240 or 237 next quarter, next year, I think that is a stretch too far and that you need to see the markets clear,

meaning prices have to come down, valuations have to come in line with the rest of the market. And so if you do have liquidity, if you do have an asset allocation and you are concerned about what's going to happen, having cash is not a bad thing because you can take advantage of that. You can take advantage of that re-rating and put that money in the market. So to actionable item, is debt a better investment than stocks right now? I mean, I know it's a spectacularly broad statement, Chris. Private credit. If I can get 8%, 10% relatively risk-free.

That seems like a pretty good trade to me. You can get greedy. What does Jim say? You know, your hogs, pigs a pretty good trade to me. You can get greedy. What does Jim say? You know, your hogs, pigs are going to get slaughtered, or one of them gets... Don't get greedy. Don't get greedy, I think, is always a good philosophy with regards to investing. I think cash and having cash to take advantage of dislocations is always a good strategy. Having a plan is also a better strategy than hope.

Hoping that the Fed is able to kind of balance this out, which is something that I don't think anyone expected. I think part of that is just the amount of liquidity that went into the system. It's drained out. And now we're starting to deal with the consequences. If you've got the cash right now, and a lot of our CNBC viewers, listeners do, you can make a lot of money rent free off the U.S. government. And it's not a bad thing unless you're paying the other side of that. Chris Toomey, Morgan Stanley, really appreciate it. not a bad thing unless you're paying the other side of that. Chris Toomey, Morgan Stanley, really appreciate it. Have a great weekend.

Thank you. Thank you for having me. All right, up next, we are tracking the biggest movers, not the smallest, not the middle, the biggest movers. As we head into the close, Christina Partsenevelis, don't give me that look. What are some of the biggest movers heading into the close? I'm saving that look for later, but you a Rams fan, maybe a Packers or Patriots fan, somebody out there is, not sure if Brian is, but

they'll be making some big bets this weekend on the games, NFL games on Sunday, and that means more money for DraftKings. That stock is popping, and I'll explain all the details after this. Alright, welcome back. Look at that. On a Friday, that is a good heat map to have.

Pretty much everything, except for energy, is in the green. We're seeing the best week of the year for stocks, and I don't mean the Magnificent Seven. I mean everything, small caps and mid caps. The Cindy and Jan Brady's of the market, they're actually performing as well. Good week, best week of the year. All right, Christina Parcinellos, she asked us a question heading into the break. She said, are you a Rams fan or

Patriots fan? I'm not either. You know me. I'm a huge Montreal Alouettes fan, Christina. Go Pelicans. Okay, okay. I thought you were going to say Habs for a second and then completely pivot to hockey, but okay, I appreciate that. Well, good. So I don't know if, good. So, I don't know if

you like that team. I don't know if you're a betting man. If you are, if you're not, it doesn't matter because DraftKings is still operating lost, but it posted a 57% increase in revenue with over 2.3 million unique pairs in the third quarter. Maybe Brian's one of them. Not sure.

The betting platform did say their expansion into new jurisdictions led to a boost in new customers, and the existing customers were more engaged in spending more money. Maybe Taylor Swift played a role. Stock is up 16%. But I'm not sure those bettors are bringing sweet green salads to Sunday football. Sweet green shares are down 13% right now after gross margin revenues and full-year revenue guidance fell short of Wall Street expectations.

Now switching gears to cybersecurity firm Fortinet. It's the worst performer right now on the S&P 500 as well as the Nasdaq. It's down about 13% after an earnings miss and lowered outlook. More specifically, product revenue declined for the first time in over a decade after a slowdown in firewall sales. And that's impacting rivals like Palo Alto. You can see it's falling in sympathy right now, down about 2.3%. Brian? That's it.

Christina Partsenevelis. No, I'm coming back in a bit. I'm not done. Right before the end of the show, as I remember. Correct. I do the show just enough to not know what's going on. Christina Partsenevelis, thank you. By the way, I'm a Chargers fan.

I should say I'm the Chargers fan. All right. Last chance to weigh in on our question of the day. We asked you an extremely complicated question that'll take you hours to figure out. Will the S&P 500 end the year higher or lower than it is right now? You can head to at CNBC closing bell on the X. We're going to bring you the results right after this. A brutal year for Walgreen Boots. All right, anyway, let's get to the results of your question of the day du jour.

We asked you this. Will the S&P 500 in the year, A, higher, B, lower? Well, the bullish bias continues. We'll call it 71% of you said higher. I think I got about one quarter of you out there a little more concerned saying lower. But overall, the bullish bias continues. Thank you, by the way, for voting in that poll. All right, up next, it's been a major week for a lot of stocks, maybe none more than the media names.

The question is why? We're going to have the answer and more when we take you in the market zone. And by the way, do not forget to tune in to Last Call tonight at 7 o'clock Eastern time tonight. It's hosted by this just charming, amazing guy named Brian Sullivan. I promise you the show will be one of the top five of the week. We're back right after this. All right. It's like house music animation that tells you we are now live inside the market zone. We've got Truth. Keith Lerner is here. He's always bringing the heat. Some great stats in this crucial trading part of the trading day. Julia Borsten on a big week

for the media stocks and what it might mean for Disney earnings next week. We got Christina P. back in on the rally and the chip makers as well. But Keith Lerner, I'm going to begin with you because you and your team do a great job. I've stolen your stuff from my RBI many, many times, my man. So in this week that was, is there something that sticks out to you any more than anything else? Yeah. Well, Mr. Sullivan, great to be with you on this Friday. I will tell you, we were on the program last Friday. And our main message back then was that the pullback represented an opportunity because the market had moved back over 10%. We'd broken through some widely watched technical levels, and sentiment got overly negative.

So as I think about this week, we had a condition of being oversold, and then we had the catalyst by yields moving back as well. So listen, I think we still have more room to run by the end of the year. I do think we'll start to consolidate some of these gains. We almost had a full year of gains this week. Some of the areas that we were favoring coming into this week, like small caps, were up about 8% for just a week. So I do think we consolidate some of these gains. But ultimately, we still have more upside before this is done. Okay. Consolidating the gains is fancy. It's fancy Wall Street talk, even in Atlanta, for stocks probably go down in the near term, is it not? Well, I think it's more that you just, after this run up off the lows, now even on the S&P 500, you're going to be testing around the 4,400 level. So I don't think you have to go down much. I just

think you basically more chop around, digest some of these gains before you have more of a push higher. But I will say, going back to the discussion about small caps, you know, they're still flat for the year, even after a big gain this week. The equated index still flat for the year. And I think, you know, the technology area is still holding up relatively well. So we like communication services. So I think the way I would think about that, Brian, is some choppiness over the next few weeks, but ultimately we move high. I knew that was an opportunity if you didn't move in last week already. Okay, good.

We're going to leave it there, but don't go anywhere because we're going to bring you back. And it was nice that the graphics ended on the communications sector. Funny how that works out because Paramount, Warner Brothers Brothers, Discovery and Charter all up big this week. And we've got Disney earnings out next week. Look at that. Big gains. I think a little Comcast action in there at some point. Julia Borsten joining us now. Julia, we talked about Paramount last night. I mean, what a what a powerhouse that was. What was behind the sort of the whole media thing this week. Well, Brian, there were huge gains for the media stocks that reported earnings this week on streaming and advertising progress. Roku shares take a look at this stock.

They're up nearly 50 percent in the past week on what they call a, quote, solid rebound in third quarter video ads. The company also guiding to similar ad growth in the fourth quarter. Paramount shares are up 28.5% in the past week after that company's revenue beat on streaming strength and shrinking streaming losses. The company also announcing that it is on a path to earnings growth next year. Fox shares, they're up about 8% for the week after beating expectations with streaming growth, despite an overall ad decline. Now, all of this

comes ahead of Disney and Warner Brothers Discovery reporting their earnings on Wednesday. Disney shares are down about 14 percent in the past 12 months. Warner Brothers Discovery down about one and a half percent in the past year. So for these two companies, investors are looking to see if they also report streaming strength, growing revenue, shrinking costs. And these analysts and investors will be pushing for guidance on the fourth quarter, particularly when it comes to advertising, streaming subscriber growth and, of course, the impact of the Hollywood strikes. But Brian, I have to point out those two stocks are both way up this week in movement with the other media companies. So there does seem to be a sense of

momentum here. Disney next week. We've talked a lot about Disney for a lot of reasons. Is there one thing that sticks out to you, Julia, about what we need to pay attention to the most in their earnings on Wednesday? Oh, there are so many different factors going on, Brian, with Disney. I have to remember, of course, that they're also facing this activist scrutiny from Nelson Peltz. So I think for Bob Iger right now, there's a lot of pressure to show cost controls are in place. He's already done a lot of layoffs, already done a lot of cost controls. But I think Nelson Peltz and Ike Perlmutter, who are part of this big activist push, want to have him show that he is succeeding with this digital transition while also keeping costs down. Julia Borsten, thank you very much. All right, let's move on now to semiconductors, also known as the chip makers, leading tech gains today, capping off one of

their best weeks of the year. But just to be kind of nasty on a Friday, I will note that that index, while having a great week, is now just back to where it was a month ago. Boom. Boom. Boom. Chipmakers and investors are breathing some type of sigh of relief, though, today, because after just a few better-than-expected earnings reports that we had this week, and I'll get into that, I just want to reiterate the SMH. I know you said it went right back to where it was X amount of weeks ago,

but it's on pace for its first positive in three weeks. And that's the best we've seen actually since May. So monolithic power, let's start with that. That's the big winner this week, even though earnings fell in line with estimates. It's the AI demand and server CPU ramps that really helped drive this name around, especially with they have some ramps with Intel that helped drove their enterprise data division. And that bodes quite well, this AI ramp for 2024. So anytime you say that you have revenues in the pipeline with AI, you start to see this reversal in the stock. Other chip names, AMD outperforming also on a new AI chip and improving client business, the client business that consists of

PC sales. Qualcomm, another one you can see it's up about 12% this week after showing signs of improved smartphone sales. Specifically, they called out strength in China in the upcoming quarter. And then you've got AI darling NVIDIA in the top four chip performers this week, although we still have to wait until November 21st for its earnings day. And then I'm going to end with silicon carbide producer OnSemi. It's the only SMH constituent right now that's down on the week. It's up today about two and a half percent, but look at that, down 18 percent. It's the worst week since 2020 because the company posted primarily weak Q4 guidance. There's some concerns about auto demand as well. Yeah, and by the way, a good lesson with On Semi

that not all semiconductor companies do the same thing, right? I mean, we always just lump them in the chip makers, but there's chip makers that do this and chip makers that do that. And some are doing great and some are having problems. To that point. So the analog chip makers are not doing very well. Those that are exposed to auto sector not doing as well. We're seeing maybe the AI euphoria starting to come down a little bit. So yes, to your point, can definitely not lump them all together, although it's very easy to do so. All right. Christina, thank you very much. We'll see you later. All right. Let's go back and a final word here on closing bell in the market zone. Keith Lerner, listen, it's Friday. It's been a good week. So leave us with some optimism. Is this, I know you said a little bit consolidation. Is this maybe the start of like the Santa Claus rally that we like to get?

I think it is. I mean, if you look at the seasonality, which we went right on cue at the end of October, we started to move up and we're in a good period from November to December. So I think ultimately, to answer your question of the day, I think we end higher by year end from where we are today. But I'm also being realistic after being very bullish last week, we've had a big move up. So just, you know, market moving two steps forward, one step back is pretty normal. Just as we said, that fancy Atlanta word consolidation or move sideways for a bit would be normal. But I would look at that as an opportunity to get ready for more upside before the year, before the end of the year. And what's maybe the next big data point that we are waiting for? Is there one thing, a jobs number, a GDP

number, an earnings number, anything that you and your team are kind of the most laser focused on, Keith? I think the most laser focused thing we're on is actually the 10-year treasury. Part of our bullishness last week was we thought that the 10-year hit at least a short-term high. So I would continue to watch that. You really want this to stay below that 5% level. We're at 4.5% today on the 10-year U.S. Treasury. So I would continue to watch that closely as probably the most important indicator for this market. Keith Lerner, I couldn't hear a word you said, but it sounded good. Keith Lerner, thank you very much. That does it for us.

The NASDAQ's up 1.4%. We'll see you on last call tonight at 7. I can hear nothing. So I'm going to send it to Morgan Brennan and John Ford in overtime.